‘Futurism’ – Opportunities and threats for Financial Services… pick one…
Outsourcing
> Non core activities to specialists (not just cost cutting of labour)
> BPI (effective and efficient – doing the right things in the right way)
> Thinking and innovation (use disconnected business people who see things differently)
Cost effective supply chain management
> Still very cumbersome and paper based
Security
> Information and data needs to be protected
> Criminals are exploiting technology more than the insurers are
Risk awareness, implications and management
> Climate change, disasters, terrorism, crime and pandemics
Social networking
> Access to between half a billion to a billion people
> Exploit web2 technologies
Global marketplace
> Emerging markets are not just open to physical presence, but technology potentially means we have a ‘borderless’ world
> Legislation, regulation, political and cultural barriers may be put up as economic hurdles
Improvements in health and mortality
> We can predict the health and longevity of people fare better than ever before
> Technology improvements in prediction may not be fully utilised [but is it a matter of time?]
> Predictive capability of health and mortality of individuals could be used to focus on problem management and mitigation
> Science, technology, biology and pharmaceutical developments extend quality and longevity
> Providers could tailor product terms to benefit individuals (Annuity products already have tailored benefits for ‘impaired lives’)
> There is a significant social and political hurdle to overcome
Taking the last bullet point into more detail:
The life insurance industry is obviously facing a number of challenges in the current market environment. One of the potential future opportunities and key drivers for the industry is going to be life extension. We are rapidly approaching a time when we can begin to more accurately predict and improve people’s longevity through a combination of pharmaceuticals, life style management and eventually even medical devices. Individually personalised medicine is emerging, indeed if we look at the US as an indication of future trends, the consumer genomics marketplace is an increasing opportunity. Genomic information could be used to predict and promote health and life. With the pace of change accelerating, we are living in an era where people will be living dramatically longer than ever before and the quality of their life will be much better. There are significant social, political and economic implications that could affect what we have to do and what we choose to do with that extended and improved quality of life. Will we have the income and or capital to fund this extended future? Will we want to or need to work longer? If we live longer, will we need long term care? Will we end up with a society like that portrayed in the motion picture Gattaca?
Improvements in medical science will not stand still. Killers such as cancer and heart disease are and will increasingly be brought under control. Companies like 23andMe are offering to sequence your personal genome and analyse it against thousands of genetic tests for disease. While there is an argument about whether it is acceptable to use the potential new sources of knowledge such as genetic profiling to underwrite products, this argument has been focused on the ‘negative’ implications of insurability (or more particularly ‘uninsurability’!).
However, if and when people begin to start taking advantage of this technology, insurers will have the possibility to map that to different kinds of new insurance products tailored to individual circumstances. There is already a trend by some insurers towards creating products targeted at people who ‘live a healthier lifestyle’ and whilst this is currently a pretty crude judgement of health and longevity, if people eventually choose to access genetic knowledge, they will be likely to want to capitalise on ‘good news’ and be better able to manage and mitigate the ‘bad news’ through healthcare improvements.
With the problems of today being at the forefront of the minds of managers, it is likely that they will be analysing their businesses with a microscope. However, whilst this is important, they should not ignore to also use a telescope to ensure that they have a clear view of what the future may hold too.
Written by Mark Thelwell - Visit Website