Ready for the Future?

Evolving, yet-to-be-known risks will present challenges to insurers not prepared with effective technologies that can help manage those risks.

Insurance Networking News, November 7, 2011

Pat Speer

If Novarica’s Chad Hersh had a crystal ball, he would have told insurance technology attendees at a technology user conference in Austin this morning that the future is already here.

Hersh, partner at New York research and advisory firm Novarica, addressed more than 100 attendees at MajescoMastek’s annual user meeting in Austin, telling the audience that the risks being managed today are not the risks that insurers will encounter tomorrow.

Hersh joked about the technology-enabled lives of the 1960’s TV cartoon character George Jetson, then presented information on hydrogen fuel-powered cars and jet packs that will power individuals into the air—both expected to be commercially available by year’s end. Hersh also presented updates on the flying car, also expected to be available soon.

Aside from the algorithms required to deal with manage never-before-managed risks, Hersh told the audience, “Think about October 2001, when terrorism and aviation risk entered the mainstream, making these insurance products suddenly very popular. You can’t create products quickly enough to deal with some of these things. How can you be ready for yet-to-be-determined risks like this in the future?”

One thing is for certain, Hersh added: “The future seems to arrive faster and faster every year. If jet packs and flying cars are real, think of all the stuff being developed in labs right now that we have not even heard of yet.”

Hersh asked the audience if they were focused on the technology requirements that will enable them to remain responsive agile to new developments in technology that affect society and resultant risks that need to be mitigated.

To test his request, he conducted a real-time survey to determine audience involvement in core systems modernization.

When asked to vote on the statement that best describes their core systems efforts, 16.3% said they have already implement new systems; 51% are in the process of implementing new systems; 11.6% are modernizing existing systems; 20% plan to implement new systems, and 0% answered not addressing new systems.

“Novarica believes that the new normal of rapid change equals opportunity,” Hersh told the group. “You need the systems to support these new waves of change.”

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