There are two main groups of technologies in the insurance technology ecosystem. One group includes foundational technologies — the enablers of digital transformation — and the other is comprised of ancillary technologies. (Shutterstock) There are two main groups of technologies in the insurance technology ecosystem. One group includes foundational technologies — the enablers of digital transformation — and the other is comprised of ancillary technologies. (Shutterstock)

P&C commercial line insurers have been historically slow to invest in technology. That began to change in 2001 with the emergence of the low interest rate environment, and accelerated after the 2008 economic recession when investment income dried up and insurers were forced to tighten underwriting practices in a number of ways. For example, data analytics emerged as an effective means of mitigating losses through better risk selection and pricing. That's when the modern insurance era began to take shape.

This once highly-conservative approach to technology has now been replaced by investment strategies that consider a plethora of technology options designed to provide immediate business value. But emerging technologies, including blockchain, AI, and chatbots, along with new sources of data such as social media and IoT, create the type of innovation noise that can make it challenging for insurers to focus and to identify how to best utilize their limited IT budgets.

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