The insurance industry is facing mounting challenges, from tech-powered upstarts to an aging population. State Farm is tackling those hurdles with its internal innovation lab.
Unlike the insurer’s in-house tech unit, the lab is grappling with problems the company will face as far out as a decade, like autonomous vehicles, says senior vice president and innovation hub leader Mark Oakley.
Key to its success, according to Oakley, is a separate funding stream that allows the team to take products from idea to production without having to ask the enterprise for financial backing.
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The insurance industry is in the midst of a massive overhaul.
Startups like Lemonade, which uses machine learning to determine the risk profile of potential customers and assign them a corresponding monthly premium, are challenging the human-centric model of legacy firms like Allstate. The growing age of the US population is also adding new pressure to roll out revamped products catered specifically to the elderly, while the rise of autonomous vehicles raises questions of how to provide insurance coverage for the nascent technology.
At State Farm, those threats are tackled by its internal innovation lab. Unlike the in-house tech unit that seeks to address near-term challenges within the next five years, the team is trying to solve looming problems the company may not face for another decade.
But setting up such a sector within 97-year-old State Farm — which ended 2018 with a net worth of $100 billion — required new thinking. It has a separate funding stream to take brand-new products like an Alexa application for seniors or self-driving-car coverage from “idea to production” without having to seek financial backing from the larger enterprise, according to Mark Oakley, senior vice president at State Farm.
“It’s both within the core of …read more
Source:: Business Insider