5 mins with: Bryan Falchuk, Founder and Managing Partner, Insurance Evolution Partners (Part One)
“People have started to realize that no matter how great the security in your data centre might be, you really can't compete with Amazon, Microsoft, or Google when it comes to security.”
Insurance veteran and author of the book series, The Future of Insurance: From Disruption to Evolution, Bryan Falchuk writes and speaks extensively about the unprecedented changes happening within the industry. In the first of our three-part series with Bryan, PolicyDock discusses the primary movers of change within the insurance sector.
For many industries, the COVID-19 pandemic was a great accelerator that pushed people to adopt cloud technology. Would you agree that the same thing has happened in the insurance industry?
I think the industry was starting to really move towards the cloud for a number of services beforehand but there was still a lot of waiting on the sidelines for some carriers. And because of the speed with which we needed to deploy just basic things to keep the lights on in terms of selling and servicing our customers, the adoption did accelerate dramatically. Often with the cloud, it is sort of like getting your comfort level up, and we had a moment where we were all forced to get comfortable, so now we’ve moved to a higher overall level of comfort and adoption as an industry.
Why are some carriers or people in the industry a little hesitant about cloud technology?
Security has been one of the drivers. Early on, I think because the cloud was new and because you didn't control it, it felt inherently like that made the cloud less secure.
Now I think people have started to realize that no matter how great the security in your data centre might be, you really can't compete with Amazon, Microsoft, or Google when it comes to security. And you never will be able to because these companies make security such a massive priority. I mean, their cloud businesses are larger than almost every carrier on the planet, so they have to keep investing in the technology and security at levels no carrier ever could.
When you look at the sophistication in the hacking community today, it's hard to imagine that carriers would necessarily be able to keep up with that.
Apart from security concerns, what other reasons might there be?
When you take security out of the equation, there are other considerations, which are not specific to insurance.
In the past, for a CIO to say, “we're moving to the cloud”, could mean a big part of their responsibilities go away because they become more focused on vendor management and less on service delivery. That could affect a lot of people in their organization. I think generally people don't intend for this, but we all have some unconscious bias against giving up some form of power and control. I do think most CIOs have moved on from that mentality today.
Is the insurance industry in certain parts of the world more progressive in terms of embracing the cloud infrastructure?
That's an interesting question. I would almost say, in certain parts of the business more so than geography, but there are geographies that are less embracing of the cloud. Absolutely.
For example, people presume Canada and the US would be very similar markets but they're actually quite different in so many ways. I think cloud adoption, and the openness to digitization, going paperless, or having much smoother, more automated processes, that still has a long way to go in Canada relative to the US or other markets.
But then you look at Asia or Africa, where, you know, from a consumer standpoint, people's first telephone was also their first computer. When you're mobile first, you must be digital first and the whole economy is mobile-focused.
What is driving change in the industry?
I think that, while this was a force for change already, customer behaviour and the necessity to change caused by the pandemic accelerated many things, and have set us on a new, faster-moving course.
To be fair, a lot of carriers were saying they were working on things already for all the new solutions they released in 2020. This was by and large true but the question is, how far along were they? How often were they saying, “Oh, it will not make this annual budget cycle, so we'll just do it next year.”
And I think what the world has recognized through the pandemic is that there is no other way to do business. So you could not put things off for a year because that essentially means that you tell your shareholders there will be zero new business for this entire year because we have no way to sell right now.
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Read the rest of our interview with Bryan Falchuk: