Capping IT Off

Capping IT Off

Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

Disruptive IT in the Insurance Sector

Category : Digital Strategies
The insurance is a sector that has many opportunities and challenges. Internet of Things (IoT) , Social Media Analytics and Cloud (SMAC) and 3rd Platform are pushing the boundary and opening new avenues, whereas poor customer experience is holding the insurance sector back – only 30% of insurance customers globally are having a positive experience (see our World Insurance Report 2015 here).

Looking at these opportunities and challenges it is clear that an insurer has to have a pretty clear plan of attack – a clear view on where they are, where they want to be and how to get there; you’d be surprised to know that not many have this. More on that a bit later. First, what are these technology disrupters, say in the use car insurance sector? Big Data, Application or even Sector as a Service, IoT (Internet of Things), 3rd Platform and (key) the You Experience – Mercedes have a concept car (F015) – see here a short video.

To help with identifying and position these we developed a simple yet comprehensive framework, helping clients to accelerate their Digital Agenda : Technovision 2015 (see here).



With new technologies insurance companies are able to move from a “one-size-fits-all monthly” bill that is fixed and assigned to the car owner, to a pay-as-you-use which is indivisibly focused. Cars will (some are) equipped with new technologies that can enable realtime data capture on who is driving, where is he/she driving and how is he/she driving.

Based on this information insurance companies (should be?) will be able to issue a realtime bill that reflects exactly you’re driving etc. I was looking to see what it would cost to insure my 17yr twin boys driving my 9 yr old German car. Getting in touch with my current insurer I was disappointed to learn that they do not yet support these new products. All I can do it so add both to my policy which will increase my premium by 500%.....yet my boys would only drive ~ 5-10% of the distance than me.

What I rather would like to see is that I add both to my policy, that I get an app to see what distance they driven, where and how and what this has cost me in insurance cover. Simple. I get the same with my phone provider – realtime billing information for all phone contracts. Now, yes, a car insurance is a bit different to a phone contract, however with IoT and Big Data based technology it is “fairly” simple to propel my car insurance policy into the 21st century…..

Even back in 2012 we predicted the technology disruption that will be responsible for the new advances in the car insurance industry:



Telematics is certainly a reality nowadays. There are a number of insurers who are using “boxes” to drivers behaviour which impacts directly the premium they are paying. A number have apps that gives the policy owner (not necessarily the driver) near realtime information on some of the key aspects. As an example have a look at Carrot. They use telematics technology – a so-called “i-box”. It measures aspects like acceleration, braking, swerving, and the number and length of journeys. Then take this information and allocate it to three categories – Speed, Smoothness & Usage which in turn reflects on the premium to be paid.

What next? Well, why do you need an i-box if you own a smart phone incl GPS. (security permitting) the app could push realtime data to the insurer when the car is on motion. Or, even better and more secure car manufacturer could incl these in their cars – like BMW (and others) is starting. And as Mercedes with the F015 and Google with its Google Car, the move to complete autonomous cars seems (relatively) near (see here a recent newpaper article).  

Coming back to the near future, new vehicles have built-in 3G cards incl GPS that allows for internet connection and location services, so also here data can be pushed to the insurer. Impact is thought that the car industry and the insurance sector agree on a common data format. Something that can take a while.

What is needed is a Plan; a plan that maps out not just business but also application, information, infrastructure and enterprise related aspects. Below is an example:

Thing to remember is that each box represents an initiative that is “loosely” aligned with the timeline; each will target the same / similar overall principles (here one of the key principles are to move from silo’ed to horizontals). Also each initiative is not independent, meaning that there are many dependencies that have to be managed and governed. Nor should this been seen as a project plan – it is a transformation map (t-map) that is mainly being used for communication and stakeholder alignment.

Thing to remember is that each box represents an initiative that is “loosely” aligned with the timeline; each will target the same / similar overall principles (here one of the key principles are to move from silo’ed to horizontals). Also each initiative is not independent, meaning that there are many dependencies that have to be managed and governed. Nor should this been seen as a project plan – it is a transformation map (t-map) that is mainly being used for communication and stakeholder alignment.

However, without such a plan / t-map it will be difficult for an insurer to manage the complexity, keep As-Is with To-Be connected and keep key stakeholders aligned.

About the author

Gunnar Menzel, VP Enterprise Architect
Gunnar Menzel, VP Enterprise Architect
1 Comment Leave a comment
great reading..

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