People are in the market for financial security, predictability, and control; and they want a product that’s as versatile as the organizations and lives they lead. Many organizations are taking coverage into their own hands through various forms of self-insurance. InsurTech was born as a result of this transition to assist these organizations in meeting their goals.
The insurance industry is being disrupted, and the ripple effect has only just begun.
In a market once dominated by guaranteed cost programs, today we also see all varieties of group purchasing which include:
- Risk retention groups
- Specialty Providers
Big data and the Internet of Things have redefined our world in many ways, but for self-insurance there is still a great need for data at a micro level. Micro-risk information at the local organization or department level is rarely available. If it is, those with access are usually not decision makers. It’s time to step out of the silo model; here’s what we mean by that.
The “Silo model”:
- Constitutes a rigid emphasis on compliance, safety and training.
- Is slow and slight to change; progress relies heavily on an annual review of Best Practices.
- Often positions local management and consultants on the “front lines” of risk strategies; they usually lack the authority to make necessary decisions and the capacity to measure implementations.
- The individuals with authority to make changes are often absent from this process.
- Assessing and reporting on risk monopolizes resources needed to actually address risk.
This kind of model has set the standard in the past, but technology, innovation, and consumer expectations are changing – and the future looks promising.
So where is the industry heading?
Check out the second article in this series here.