22 April 2018
Keith Stonell


Keith Stonell - Guidewire

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Rise of Financial Services Insurtech Mirrors Medieval Peasants' Lives

08 September 2017  |  7791 views  |  0

Historians use eras to help map out the big gearshifts in economic and social change in retrospect.

For the people who lived during those periods, well-known historical terms like the Middle Ages would have been unknown. For example, a medieval peasant knew they were a peasant but not that they were a medieval peasant.  Medieval was a term first coined in 1604, more than a hundred years after the Middle Ages are said to have ended.

Finding yourself in a significant era of history that someone else has coined is something today’s insurers are experiencing too.  Like those peasants and kings and queens, they can be forgiven for not noticing fully the historical shift around them because the accelerated pace of change has been so sharp and pervasive.

For insurers, the change is all about technology, and how technology can support the success of insurance companies in the long and short term.

The industry has passed through two eras in the last couple of decades at a reasonably sedate speed.

The Transaction Era was the first phase when technology changed general insurance. This era was about how computers captured and processed insurance business data, reducing paperwork, and ensuring a better processing performance than manual systems. Lasting from the 1960s to 1990s, this period came to an end because core systems could not adapt to more dynamic market conditions.

The Process Era followed naturally, as insurers looked to technology solutions that enforced standard processes and management control across the insurance lifecycle. Enter web-based systems, modular core systems, systematized business rules, and straight-through processing.

The insurance industry has experienced how improved processes deliver stronger, better business models since the mid-1990s. It sounded modern, was eminently sensible, and provided the industry with a glimpse into what its future could really be like.

However, this era is being eclipsed by trends that have quietly and now more strongly changed the game.  I am no historian, but observe that the period we currently find ourselves in can be described as The Engagement Era. Now the imperative is how well insurers employ technology and systems to satisfy the experiences and demands that their users want. In this context, users extend to include customers, agents and insurance company employees.

So, what do users want? When viewed under the lens of engagement several user expectations rise to the top:

  • Personalized products and journeys
  • Intuitive, mobile experience
  • Real-time response
  • Fast settlement of claims.

Given these requirements, what do Engagement Era systems need to offer? What and how high is the bar for insurers?

  • Unified core, data, and digital: Systems must support core operations, data and analytics, and digital engagement in a cohesive, orchestrated manner.
  • Omnichannel design: All users must have a consistent and efficient journey across a variety of channels and across the entire insurance lifecycle.
  • Consumer-grade UX: Users must have an interactive and rewarding experience on all devices and platforms.
  • Predictive, guided process: Systems must apply data, machine learning, and context to guide processes and decision-making.
  • API-driven design: Systems must be interoperable with other components and systems.

A lot of this sounds familiar, which goes back to my point about the Middle Ages. People at that time did not suddenly say to themselves when the calendar changed, “I don’t feel medieval anymore.” They simply responded to the pace of change, and adapted their ways and patterns of thought. It was only later that someone pronounced that these people were no longer medieval, but modern, in how they thought and behaved.

The Engagement Era for insurers has been developing and bubbling away for several years now. Other sectors like telecoms and retail have experienced the impact of engagement much earlier than the insurance industry. Consider what Amazon’s Jeff Bezos says about Amazon’s attitude toward its customers: “We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.”  This spells out how fundamentally different the Engagement Era is from those that preceded it. There is simply no room to not meet or not exceed at delivering these user expectations. This is an elemental force that the industry has to work with, as well as benefit from.

User engagement is the strategy of our time. General insurers now find themselves in the Engagement Era because of how technological change has accelerated faster in the last two years than the last 20 years.  Of course, there is some overlap and even unfinished business from the past era of process improvement, but the Engagement Era is with us, and will persist for years to come. 


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job title Managing Director, EMEA
location London
member since 2015
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I'm the EMEA managing director at Guidewire Software, a global company that specialises in providing software solutions for the general insurance industry.

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