Video: Disruption and opportunity in insurance


Opportunities and disruption in insurance

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At a recent event hosted by Milliman Integrate, renowned “Steve Jobs” author and Aspen Institute CEO Walter Isaacson led a discussion on the importance of embracing disruption and transformation, particularly in hidebound industries like insurance. We sat down with him afterwards for this brief interview.

 

Video transcript

Walter Isaacson: Well, the great thing is that you're always going to have disruptors and if people get too comfortable, there'll be somebody who comes along like a Steve Jobs and says, "I can put a thousand songs in your pocket. I can change what people think is possible."

I think the insurance industry sits there with a lot of new technologies that are going to be opportunities or going to be challenges of disruption. For example, the big data, easy payment systems, peer-to-peer services where people can just get together and decide to pool their resources, their workspaces, their risks if they want to. All of that could happen and I think the industry has got to make sure it doesn't see that as a threat, but sees it as an opportunity to find new ways to pool risk, which is what the insurance industry is about.

Sometimes I'm surprised by the pace of innovation. I look at things like Uber, Airbnb, WeWork that allow a whole new type of economy, you know, that's sort of based on gigs and people sort of self-organizing. On the other hand, there are days when I wake up and I'm surprised about how slow innovation has come to financial services, to the K through 12 education market, to industries like healthcare where you would have thought there would have been more data sharing and there would have been more platforms on which to build innovative products.

The sectors that have not been disrupted tend to be those that are either monopolies, those that are heavily regulated, and those that sort of have to have a certain set of standards that are imposed by policy. That happens in insurance and it happens in banking. The danger is when you have those protecting the old ways of doing things, at a certain point, the dam breaks when somebody figures out an innovation that'll get around or will just barrel over the regulations and the protections.

I think that institutions, including the one I used to be in, which is the journalism industry, we think that when they get disrupted, there's a huge cost to society. But the benefits of allowing a more democratic opening up of an industry usually far outweighs the discomfort that comes when things aren't done the traditional way.

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