Hamilton Re’s CEO Reardon on the Future of Insurance

This article is part of Carrier Management’s series on the Future of Insurance.

Kathleen Reardon, CEO, Hamilton Re

Q: What major changes do you see on the horizon for the property/casualty insurance industry in the next 10 years? What will insurance companies, insurance leaders, the industry and its workforce look like in the next decade? What risks will they insure?

Reardon (Hamilton Re): It’s now a truism that the future of insurance will be shaped by the digital revolution. According to the World Economic Forum, the fourth industrial age will see a transformation unlike anything humankind has experienced before.

In 2013, experts reported that 90 percent of the world’s data had been created in the prior two years. By extension, more information has been created in the last two years than in all recorded history. According to some projections [most likely based on Futurist Ray Kurzweil’s Law of Accelerating Returns], by 2020, technological advancement will occur every 30 seconds…

Consider those remarkable statistics in the context of their impact on the assessment of emerging risks like cyber for which there are no historical data. Also consider the world’s shifting demographics. Over 50 percent of the global population is under the age of 30. This diverse, digital generation will increasingly expect quick, easy, technology-enabled access to products and service.

Partnerships fusing the insurance, technology and financial industries—InsurTech and fintech companies—are creating a new corporate landscape.

At the same time, consider industries that we’ve underwritten for decades—both on the property as well as casualty side of things—that are on the verge of irrelevance because of technological disruption. Think of the impact 3-D printing is having on manufacturing. Or the paradigm-shifting potential of the Scanadu Scout, the medical tricorder prototype that’s reported to measure heart rate, temperature, blood pressure, oxygen level and provide a complete ECG reading, all through its sensor. Some futurists claim devices like these will render most hospital, healthcare and doctor’s services obsolete. (Editor’s Note: Late last year, reports from TechCrunch and other online sources revealed an obstacle to any rapid rollout of the Scout device. The reports said that Scanadu informed customers who were backers in an Indiegogo crowdfunding campaign that it would no longer support its Scout device starting May 15, 2017, in accordance with FDA regulations regarding investigational device studies.)

The implications for the industry’s workforce are profound. In the face of a world dominated by the digital experience, what role does the broker or agent play? What kind of trusted adviser must you be when product development is being reinvented in real time?

Similarly, what role does the underwriter play when algorithms can analyze data and select and price risk at the speed of light?

The fourth industrial age will spur true innovation, increased efficiency, relevant products and streamlined distribution—the hallmarks of a truly client-centric industry.

As for insurers and reinsurers, partnerships fusing the insurance, technology and financial industries—InsurTech and fintech companies—are creating a new corporate landscape. In a decade, our venerable, well-established carriers with legacy systems and cultures—if they manage to survive—will be anachronistic.

However, far from representing a doomsday scenario, the fourth industrial age will spur true innovation, increased efficiency, relevant products and streamlined distribution—the hallmarks of a truly client-centric industry. In that regard, the future of insurance is full of promise.

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