Industry Insights

Looking into the crystal ball

Share this post:

Are you interested in knowing the future? I certainly would, the more accurate, the better. (Next week’s winning lottery numbers, anyone?)

Unfortunately, as the old Danish proverb goes, “Prediction is very difficult, especially about the future.” My colleague Mark McLaughlin and I gave it a shot anyhow, and you can now read the result in our latest IBM Institute for Business Value study “Insurance 2025 – Reducing risk in an uncertain future”.

In this study, we start with two technological trends, which we think will strongly impact the future across industries: cognitive computing, and decentralization of decision making.

From there we describe four alternative future scenarios with different views of risk and insurance needs – swarm economy, central intelligence, Internet of Everything and survival of the fastest.

In swarm economy, for example, cognitive systems are ubiquitous and treated as utilities, with decision making “on the edge” in smart devices. What does such a scenario mean for insurers? Well, when risk can not only be measured but also mitigated or prevented on the edge, classical insurance might well become as good as obsolete. Insurance will switch to microproducts offering remediation and repair.

On the other end of the spectrum, survival of the fastest, cognitive is proprietary, and edge computing hasn’t gained hold, be it because of (privacy) regulation, customer sentiment or technological difficulties. (Think lack of standards.) This is where we are today, but with a twist: technology, especially cognitive, will have advanced in such a way that early adopters – “the fastest” of the scenario name – will have gained huge competitive advantage.

While insurers would probably prefer the latter scenario, as it has the potentially highest profit, competitive pressure might well move the industry toward the former – creating a real prisoners’ dilemma.

What will it be? We don’t know, but we have a few ideas of what insurers can do to be prepared:

  • Build a war chest
  • Prepare partner ecosystems
  • Build high-beam headlights
  • Embrace innovation

Did I pique your interest? If yes, please download the study at

Insurance Leader, IBM Institute for Business Value

More Industry Insights stories

Connect with IBM Insurance experts on social media

At IBM, we are fortunate to have a number of IBM Insurance experts who are active on social media and enthusiastically look forward to connecting with others in this realm. I encourage you to connect with the following insurance experts if you have a question or just want to follow the latest news and trends […]

Continue reading

Key takeaways on the IBM Insurance Platform

At the IBM Think 2019 session, Drive Differentiating Value and Fill Critical Gaps with the IBM Insurance Platform, Noel Garry, Global Offering Manager, IBM Insurance Platform, and Ed Ossie, Chief Operating Officer, Majesco, discussed the current state of the platform and illustrated how it works. Majesco, a multinational provider of insurance technology software and an […]

Continue reading

Hot insurance sessions at IBM Think 2019

With such a great lineup of education and activities for insurance leaders at IBM Think from February 12-15  in San Francisco this year, planning your agenda will be tough. While there is a great array of insurance-specific sessions from which to choose, the sessions below are highly recommended. These sessions include insurance leaders in auto, […]

Continue reading