Batman would be jealous of all the equipment adjusters carry to the field. Laptop. Smart phone. Digital camera. Measurement tools. Not to mention the redundancy of saving pictures to a laptop and later categorizing and uploading those pictures to a database.

Our own interviews with insurers reveal that collaboration, workflow, and documentation are some of the industry’s biggest challenges. So why are carriers slow to adopt innovative technology systems that could address these challenges?

It’s not from lack of funding. VC funding for insurance technology has expanded from $131M in 2011 to $740M in 2014, before tripling to $2.65B in 2015. It is estimated that there are currently more than 1,500 insurance technology startups or “InsurTech” firms.

It’s also not from lack of awareness. 80% of insurers recognize that an organization’s future success is closely aligned with their ability to innovate ahead of competitors. 60% believe that the use of technology is a top three opportunity for their organization.

So when an entire industry knows that innovation can drive growth by delighting customers and improving efficiency, what are the challenges preventing innovation? These are our observations as a technology provider who helps insurers implement innovative strategies.


Insurance companies, by the nature of their business, are risk averse.  But when the net income of an insurance vertical drops 12.9% in a year, it’s clear more of the same doesn’t lead to growth.

The insurance industry is a labor-based business, with staff, travel, and documentation comprising the highest P&L costs. Labor-based business models typically recognize low gross margins, and as the complexity of “things” insured increases, these gross margins will decline as a result.

Yet, 80% of the activities performed by the insurance workforce either don’t create value or are redundant and repetitive. Many activities can be guided, or replaced entirely by, data-driven software that automates processes and drives new gross profit to the bottom-line.

This approach simply requires cultural change to embrace innovation.

Mick Simonelli, author of Innovation Alchemists and former senior innovation executive for USAA, believes that culture is biggest challenge to innovation. “Culture,” he says, “Eats Innovation for lunch. Leaders who understand their dual role of running the company (transactions) and also shaping the strategic future (transformational).”

Louis Régimbal, Partner, KPMG in Canada, believes that many firms spend the majority of their time defending against disrupters instead of spending their energy to create value for their customers.

While it is important for insurers to scan the horizon for the next disruptive technology, innovation doesn’t have to be disruptive to be effective. Incremental changes, such as replacing a percentage of your on-site risk audits with remote audits, can yield drastic results.

Whether disruptive or incremental, innovation must be a part of the culture before it can bring success. Organizations should consider how they can work with or acquire innovators to improve their offerings.


Insurers are faced with two big regulatory challenges: 1) New capital regulations that were designed for banks but have been applied to insurance (such as the need to have more capital in reserve to survive a financial crisis) and 2) The strong push for global standards.

Insurers are often reluctant to embrace new products and services out of concern of navigating these complex compliance and licensing requirements. But companies like Uber have proven disruptive technology can overcome obstacles, when there is motivation.

Uber vs. Medallion Taxis

Uber faced massive regulatory roadblocks from established, highly regulated industries (taxi and hotels) in NYC. Instead of spending upwards of $1 million to purchase a taxi medallion, car owners were able to contract their services for the cost of a background check.

The value Uber provides quickly garnered support from the public and media and dissolved any regulatory barriers.

Price Optimization

Other disruptive practices, such as the ongoing price optimization debate on whether non-risk-based consumer behavior should influence policy pricing, are slower to gain adoption.

Nearly half (45 percent) of larger insurance companies currently optimize prices, but we speculate the remaining insurers are reluctant, at least in part, due to the lack of consensus on regulations.

Consensus is not stopping companies like Admiral Insurance from using customers’ social media behavior to set pricing. No matter where you stand on price optimization, companies explore new ideas are ultimately the ones that influence regulators.


Inboxes around the world are flooded with invites to demo the latest, greatest InsurTech app.  Unfortunately, there is so much white noise in InsurTech that decision makers are tuning out anything that isn’t transformational.

This can be confusing, as these same organizations are one of the slowest to adopt new technology.

The longest journey starts with the first step

Transformation of the business operations does not have to be daunting.  With solutions like Augmented Reality, IoT, Machine learning, and AI, customers often have visions of Jarvis from the Iron-Man movies and don’t know where to start. Back-office systems, IoT Sensors, Smartglasses?  How do you bring these all together?

Our experience with insurance carriers that are successfully transforming their business is to start with a pragmatic application that sets a foundation for future enhancements and provides an easy to adopt immediate benefit.

For example, the first smartphones may have started with a few simple enterprise applications – the ability to read emails, send texts, and surf the web.  From these simple steps, a highly integrated solution has evolved that integrates voice, video, and complex applications.

With Augmented Reality and the insurance industry, we are delivering a new solution for document management in the field.  “Capture,” is an operational efficiency tool that automates the process of the insurance underwriter or adjuster of capturing and documenting information and creating reports.

Capture provides the ability for insurers to dictate notes, capture media, voice, video and other content, and easily organize and sync that media to cloud reports defined by the Insurer.

We unveiled Capture at ACE and since then major multi-line carriers have tested and are deploying it. Feedback from business leaders was extremely positive, with an estimated savings of 50% in worker productivity, consistency, and accuracy.

Capture now includes interactive reports with high resolution photos, HD videos, and 360 degree photospheres. Files can be automatically shared with department heads and supervisors, or even clients and customers.  Guided questions ensure insurers in the field can create consistent documentation and digital records provide increased value.


Driverless cars? Microinsurance? IoT data? As the world continues to go digital, customers expect carriers to forecast and mitigate these new risks. New forms of data such as streaming forensic data from automated assets needs to be analyzed. If you aren’t the one gathering this new data, your competitors probably are.

“New technologies are reducing losses and costs while saving lives and increasing customer satisfaction, increasing risks and driving new business models and consolidation within the industry. New advances such as driverless cars, machine learning, home sensors and ‘robo-agents’ empowered with artificial intelligence offer a world of opportunity for insurers,” said Gary Reader, Global Head of Insurance, KPMG International.

According to this survey, insurers are slow to move because they, “Lack the hallmarks of an innovative organization, such as dedicated budgets for innovation, formal strategies, executive-level support, and performance metrics.”

The challenge, as pointed out by Clay Christiansen in his book “The Innovators Dilemma” is that those who resist change, or rest on past approaches are on a slippery slope to mediocrity and a slow decline.

New technologies, and those that adopt them rapidly, are shown to maintain the highest profit margins.


So how does an insurance organization overcome these challenges? One approach that a customer took was creating an internal innovation competition to stimulate new ideas from employees. The winner was given approval to pursue a pilot program.

The contest winner equipped eight adjusters with Google Glass as a replacement for the traditional equipment loadout of laptops, smart phones, and digital cameras. The glasses not only made it easier for the adjusters to do their job, but made things safer when climbing ladders to inspect roofs or performing other challenging tasks.

After all, if someone is going to disrupt your business, it might as well be you.

Interested in trying Capture? Contact Us for a demo.