Make Disruption Work for Your Business

By Darren Bryant, Vice President, Insurance Financial Services

 

Earlier this summer I was talking with a cab driver who expressed his frustration with the disruption caused to his business by ride-sharing companies like Uber and Lyft. His concern that cab companies won’t exist in 2 to 3 years led him to decide to change careers and become a commercial truck driver. He was just days away from taking his CDL license test and already had a new job with a trucking company lined up. At the time, I appreciated his initiative in adapting to this disruption in his industry, and taking steps he felt were best for him and his support of his family. However, recent events made me realize his new industry is preparing for disruption as well – and one of the key players is his current rival – Uber!

Now, if your first thought is requesting a friendly Uber truck driver on your smartphone to haul some widgets across the country, that isn’t where the disruption is coming from – it’s from autonomous vehicles. With Uber’s recent purchase of Otto, a startup created by ex-Google employees focused on self-driving trucks, the pace of disruption continues to increase. Expanding beyond self-driving taxis in Pittsburgh into testing of self-driving trucks, my taxi driver friend has more cause for concern. This next phase of disruption by self-driving vehicles has already started!

What is even more interesting is how the progress of commercial autonomous vehicles has the potential to disrupt more industries than just taxis and freight transportation. I recently attended the National Association of Insurance Commissioners (NAIC) meeting in San Diego, where NAIC’s Center for Insurance Policy and Research sponsored a forum on autonomous vehicles and the types of disruption that will impact the auto insurance industry.

There was a lot of great discussion. Some of the potential disruptions of self-driving/autonomous vehicles that stood out to me:

  • A move towards use of self-driving cars owned by large commercial fleet companies (e.g. Uber, Lyft) will lead to a decrease in personal auto ownership (and therefore personal auto insurance policies), according to a recent report on insurance trends by Deloitte.
  • Liability for accidents will shift from driver-centric to vehicle-centric, and will be focused on product liability of the vehicle manufacturer due to faulty navigation and control
  • The use of crash data in litigation may reduce the friction caused by the current need for witness testimony to determine who was at fault
  • The critical need for cyber security to not only protect personal information (who will know where you went last night?) but also ensure there isn’t a massive car accident through hacking
  • A significantly reduced need for driver’s license testing

I wonder what the future of automated claims processing will be with the significant amount and availability of data. Maybe by the time you get out of your car after an accident, the data from both cars has already been sent back to your respective insurance companies, car manufacturers, and local authorities, fault has been assigned, damage estimated, and the claim has been processed. Claims adjusters – another industry disrupted!

Going back to my taxi driver, the disruptive change he sees in his life is concerning, and his natural response is to try to avoid the disruption by moving to another industry. But as this example shows, avoiding disruption is pretty hard to do. Maybe if he looked at the broader view and found ways to embrace this change, his outlook would be different. There are many times when technology disruption can be something you leverage to provide greater value.

Successfully leveraging technology disruption requires an understanding not just of the tools and processes impacted, but also how people will be impacted. We see this often through our client engagements. Adoption of new technology is much more successful when employees are engaged in the business transformation process – when they understand the business and the related strategic roadmap needs to change, and even better, when their unique skills and experience are leveraged to help plan out the new vision. When affected employees don’t see the link to a clear business need that will impact their personal success, the implementation of new technology is not likely to achieve the desired results. That holds true no matter how many great features and benefits are in the solution, the method of developing software, or whether you are leveraging the latest technology disruption. After all, people are what drive success in business. Unless success in business is driving taxis – then software and sensors might actually be driving you.

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