Progressive Q4 Net Income Up 141%  January 25th 2024

The Dot-Com Bust's Lessons for AI's Boom

The only thing better than having smart friends is having smart friends who've been around a little while, gaining perspective.

In my case, the smart friend often turns out to be Chunka Mui, whom I've had the pleasure of working with for more than 25 years and with whom I've written four books. He recently published some sharp insights on how the lessons from the dot-com bust of the early 2000s should shape our thinking about today's boom in generative AI, and I'll summarize for you here.

Chunka knows whereof he speaks. He was one of the pioneers of digital strategy back in the mid-1990s--I first heard the term from his lips when we were partners at Diamond Management and Technology Consultants. He was also co-author of "Unleashing the Killer App: Digital Strategies for Market Dominance," a best-seller that has been described as the bible of the internet boom.

Diamond became known as "the killer app firm," and he advised on loads of projects. After he and I published "Billion Dollar Lessons" in 2008, on what to learn from major corporate failures, we consulted with major companies on how to tell whether they had a killer app or a killer flop, before they risked tens of millions of dollars.

So Chunka has seen the good, the bad and the ugly in major innovation efforts, like those companies are considering for generative AI.

Paul Carroll, editor-in-chief, Insurance Thought Leadership

The Role Of The Insurance Industry In The Connected Era

In the future, when people look back at our era, they will undoubtedly see it as the "age of connectivity," a period during which we transitioned from our historical state of being relatively atomized individuals living in local communities to becoming an elaborately interconnected meta-organism of overlapping networks of both humans and (especially in the past decade) objects.

My industry, namely insurance, is inherently conservative and cautious by design, but we, too, have come to embrace the possibilities afforded by these rich new connections. As we do, the prevailing model of what insurance is at its core has evolved.

Historically, insurance has been in the "peace of mind" business—a hedge against adversity in exchange for a regular premium. Over time, as both technology and financial instruments continue to evolve, the goalposts for peace of mind have moved. Under many circumstances in today's world, our ability to predict adverse incidents before they happen enables us to prevent them from happening. This model, referred to as "predict and prevent," emphasizes the identification of risk conditions and patterns in advance to allow us to preempt adversity.

John B. Riggs, CTO & SVP, Applied Technology Solutions at HSB

Aon CEO Greg Case urges immediate action to address climate risks

In Aon’s 2024 Climate and Catastrophe Insight report, CEO Greg Case emphasizes that climate risk is not a mere probability but a certainty that demands urgent attention.

Reflecting on the severe weather events that transpired in 2023, including wildfires, floods, and record-breaking heatwaves, Case asserts that these events pose an existential threat to our way of life.

The report reveals that out of the 66 natural catastrophes causing a billion dollars or more in damages in 2023, a staggering 63 were weather-related.

Shockingly, only 40% of these weather and climate-related losses were covered by insurance.

Case sees this as a substantial opportunity to bridge the protection gap, offering tangible value to clients and bolstering the insurance industry’s impact on society’s response to climate risks.

Empathy remains critical in a tech-enabled insurance industry

In the ever-evolving landscape of the insurance industry, the role of technology has been transformative. But there’s a critical aspect that we often overlook — empathy.

Empathy in insurance context goes beyond simply settling claims promptly. It’s about understanding the unique needs of policyholders, recognizing their concerns, and showing a genuine commitment to their well-being.

Integrating empathy can drive customer retention and operational efficiency.

When customers feel understood and valued, they are more likely to stay loyal. Empathy in customer interactions, even in the digital realm, leads to a superior experience. Claims processes can be streamlined with a compassionate approach to handling customer hardships.

Moreover, refining claim processes with a human lens not only simplifies the experience but also fosters customer bonds, leading to higher retention and longer policyholder relationships. New technology such as chatbots can be trained to respond empathetically and improve adoption and experience.

Empathy doesn’t mean guesswork. By leveraging the wealth of available data, insurers and tech leaders can craft tailored insurance products that truly meet individual needs. Empathy-driven AI algorithms can analyze user behavior and preferences to recommend the perfect coverage.

Additionally, by understanding the specific risks and challenges faced by policyholders, insurers can take a proactive approach to risk management, not only minimizing losses, but also by demonstrating a genuine concern for customer well-being.

Jess Keeney is chief product and technology officer at Duck Creek Technologies