The Digital Transformation of Insurance

The week of October 15th, 2018 saw the insurance world descend on Nashville, Tennessee for the annual AppliedNet conference, in which industry leaders gathered to discuss the current state of insurance affairs and what's on the horizon within the industry.  Chuck Hembree was there and he joined the podcast to debrief us on what he learned at AppliedNet 2018.



Below is a transcript of the episode, lightly modified for your reading pleasure.

* * *

[Grant FINLEY] Welcome to another episode of Your Insurance Connection Podcast by CLH Insurance.  I’m Grant Finley.

A week prior to this recording, Applied Systems held their annual AppliedNet Conference in Nashville, Tennessee which brings together many members in the insurance industry.  President of CLH Insurance, Chuck Hembree, attended the event and we felt it would be worthwhile to debrief the conference with a podcast episode.  Here’s Chuck to tell you a little more about what AppliedNet is.

 

[Chuck HEMBREE] In our agency we use an agency management system and AppliedNet is the user group's conference that we go to, to make sure we are utilizing the best extent that we can, our agency management system.  So it's a thought that these are users helping users and we have company people there, industry people and then agency people just like ourselves.  Doing tons and tons of workshops and forums and panels on how to best utilize and how best to run our business utilizing the agency management system that we particularly chose, and from Applied Systems.

 

[FINLEY] It’s typical of these events to have a theme or overarching idea, and AppliedNet 2018 was no different.

 

[HEMBREE] So the theme of AppliedNet 2018 was Digital Transformation of the Agency and really digital transformation within the insurance industry.

 

[FINLEY] AppliedNet offers various “tracks” depending on one’s role within the industry.  For example, if you work in marketing then it would make sense for you to use the marketing track where most of the breakout sessions and group discussions will focus on marketing.  Here’s Chuck again to explain the track he followed and what the popular topics of discussion were.

 

[HEMBREE] In the executive management track, which I went to just pre-conference - it was a lot of, where is the agency and the industry going with technology?  Digital transformation is obviously moving away from paper, which insurance companies have struggled with for years and still struggles with, and how do you do that going into the digital age and do it safely because we're dealing with a lot of privacy, security, cyber-liability issues, and so all of these things - where are we advancing in there?  Where are we advancing with artificial intelligence and how do we protect artificial intelligence?  We're seeing smart homes, smart businesses, we utilize a lot of smart and artificial intelligence even in the agency, so how do we protect against the element that would seek to corrupt it, to hijack it, and take that information when we insist and are trying to keep it private?

 

[FINLEY] There was some big news announced at the conference involving some funding that should go a long way to making sure the insurance industry is well positioned to meet these technological and digital challenges head on.  Insurers continue to innovate and press forward, as well as learn from other businesses and industries, and it sounds as though the industry as a whole is aware it doesn’t know everything 

 

[HEMBREE] And because we don't know everything, it takes tons of capital to try to keep up with those things and no one industry can do it all.  So, we're kind of a hub and spoke industry, reaching out its tentacles to utilize what other industries have learned about protection.  And I think that's one reason it was greeted very warmly that Google just infused over $100 Million dollars of funding into AppliedNet so they can share commonality and learn from each other and that platform was just announced, so we don't know what that looks like at this point, but there's a great, huge investment for Google to understand how the industry is trying to work through these.  Perhaps provide some solutions and also for the industry to use and learn what google has done on their platforms through Alphabet and so forth, that they can utilize within the industry.  So, we're seeing these partnerships develop because it takes more than just an insurance industry to figure out its own problems and its own solutions.  More and more, insurance is interwoven in any kind of business activity so the insurance industry needs to be on the cutting edge of understanding what the exposures are  and providing solutions at a correct price so that we are able to maintain growth and protection and viability. 

 

[FINLEY] Innovation and progress are sorely needed in the industry, and those involved in the highest positions know this.  Thankfully, there are some innovators putting fresh, 21st century ideas to work in the slow moving insurance industry.

 

[HEMBREE] We know as an industry we have to change.  Alvin Toffler in "Future Shock" talked about how there's an exponential factor of how quick change happens and we're certainly experiencing it now and these innovators, the insurtech - Lemonade, Slice, Root, Trov, TrueMotion, are responding in small ways to consumers demand that things happen quickly.  We're so far behind, if we go up and need to change a ticket at an airline or we need to do a reservation at a hotel, we can do that online a lot quick and get feedback and make changes quicker than in the insurance industry and the insurance industry needs to catch up with that.  In a small way, these innovators have said, "Okay, we're going to try to meet the consumers demand for simplicity and quickness by addressing it on a smaller scale."  Even they are not able to handle it on the grand scale that the insurance industry handles it.  So they've taken small things like tenant insurance, or inland marine on specific things outside of the house, and they're keying in on those things - cell phone insurance.  Things they can quickly put up that you can purchase quickly.  Now, we're not seeing that yet come to homeowners, auto, commercial business, but we're starting to see  by the model that these innovators are doing where they're being  successful and where they're failing too and their failures are helping us chart a path where hopefully the insurance industry can see, "Okay, here's how we can apply this to the broader scope of consumer and demand.  And innovators and insurtech are going to be a good light to us, not a threat to us in innovation within the insurance industry as a whole.  And hopefully we can learn from them on how to deliver to the consumer in a better, quicker, and more efficient way.  

 

[FINLEY] Identifying the problem is the first step in solving it and it appears as though change is on the horizon, which is something everyone seems to be in favor of.  We live in a digital world and transforming the insurance industry to fit into this digital world is in the works, but change will likely be gradual and not all at once.  The idea of gradual change was one that was delivered to the conference in a keynote address by a modern day American pioneer.

 

[HEMBREE] We go to listen to Scott Kelly who gave a keynote address on his experience on being up in the space station for almost a year and comparing then his body's physiology to his twin brother's down here on Earth.  It was a challenging, inspirational speech but the thing that I got the most out of it was, he said he was not a very good student.  That he really was kind of ADHD, couldn't stay focused and that really almost ruined his hope to be an astronaut until he finally learned that his lack of focus was keeping him from achieving the things that needed and somebody taught him how to incrementally make small adjustments and changes so that when a decision needs to be made or a circumstance came up that needed quick action, he had already made the small changes and could react to it and I though that was the perfect thing for us to hear as an insurance industry.  That rather than wait for the big, huge crisis to come up or the great new demand, that we incrementally make small changes, keep innovating, keep trying to change, keep bettering ourselves so that we'll be able to perform better when a big performance is demanded.

 

[FINLEY] Incremental change.  Digital transformation.  Innovation.  Cyber Liability.  Internet of Things.  These aren’t words one traditionally associates with insurance, but as was evident in AppliedNet 2018, change is on the horizon.  Thanks for listening.

 

 

 

Your Insurance Connection podcast can be heard on iTunes and Stitcher or by visiting clhins.com/content/podcast. If you like what you’ve heard you can support this podcast by rating and/or sharing it on your social platforms. CLH Insurance is a “Trusted Choice”, independent agency servicing Missouri, Kansas and Illinois. For more information on CLH Insurance, visit clhins.com or call 636.391.0700 to speak with an agent. Until we connect again, thanks for listening. 

Posted 2:18 PM

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