“The future is already here — it’s just not evenly distributed,” said William Gibson, cyberpunk author.
Cyberpunk is a subgenre of science fiction where plots are set in the future and the characters are marginalized and victimized by wimpy governments and the sinister greed of major corporations. They rail against the establishment, designing creative solutions to their own challenges, using technology in ways that were never intended by their inventors.
Why is this relevant to insurance? If you think about Mr. Gibson’s quote and the themes of his genre, they are spot on. The future has been here for years, starting on the fringes of society; and once it became more mainstream, its label changed to “present.”
Obvious examples are Internet, mobile and social. The industry was uncertain about all of these trends at one point, doubting their relevance to insurance. Some said these trends would never catch on because, after all, insurance is “sold, not bought.” Now many companies are investing heavily into catching up, designing new experiences around the way people consume information and make decisions.
Lesson learned. Now what?
Let’s look at the future scenarios that we are uncertain about today and start infusing them into the business so we can lead instead of lag. How to do that? As a start, let’s ask ourselves what futures should be considered today.
The industry already has some futures on the radar such as the Internet of Things (e.g., wearables, smart homes and cars, new uses of big data). Some companies also have the sharing economy in mind, particularly those in the P&C and/or health insurance world because crowd funding and home/ride sharing are becoming mainstream and substituting for, or pushing the limits of, current products.
A few examples of other futures we should be considering: The future of income and the future of retirement. Will full-time employment and/or employment by one employer at a time become passé? Will the notion of saving for a retirement date be relevant anymore, or will people maintain their lifestyle in other ways? What about the future of currency? Will people pay for what’s important with just their money, or might they pay for it with their time, their behavior or other things of value to us?
What can companies do now to get ready for those futures?
Once your domain is clear, find the consumer attitudes and behaviors that are relevant to those future states and infuse them in your segmentation research. Many companies segment around the present needs for purposes of marketing, service and product development. All good. And if you add the future state attitudes, you can get at unarticulated emerging needs and be out ahead of them.
Another strategy is to find disruptors that are playing in those fringes and learn from them. The amount of carrier investment in startups in the last year has been more than in the previous four years combined. This is a sign that the future is becoming more evenly distributed. The key is to find the startups that are in the future spaces, not just present ones.
How can we avoid mistakes of the past? First, don’t define your future domain using mainstream terms. If you do, you’re working in the present versus the future. For example, if you define retirement around an event and/or a rate of savings, that’s present. If you are defining big data as a buying propensity tool, that’s present.
Second, your culture needs to become comfortable in the grey. And you can’t just declare it into being. It requires new skill sets, in particular, those around prototyping and decision-making in small increments. The good news is that all of this can be learned.
This should not minimize the importance of working on the present state of your business. However, placing a small percentage of your energy and resource on the future is like an insurance policy for relevance in the decades to come.