A December McKinsey Global Institute report estimated digitization impacts 98 percent of the U.S. economy and could add some $2.2 trillion to the annual GDP by 2025.
Peter Gunder, chief business development officer at American Family Insurance, is keenly aware of the significance of that statistic.
Madison-based American Family, which offers property, casualty and auto insurance in 19 states, has developed a culture focused on agile innovation and has partnered with several other inventive companies to accelerate its digitization efforts. Partners include Microsoft, Google’s Nest, and a video doorbell startup called Ring.
Some of the Internet of Things products on the market could have a major impact on the insurance industry, potentially making homes and vehicles safer and reducing the number of claims, said Gunder, who will present on the company’s innovative culture at the Northern Trust Economic Trends Conference presented by BizTimes Media on Jan. 29.
“We have a strong belief that the broader Internet of Things arena, of which the smart home is a subset, will meaningfully influence the insurance industry over time,” Gunder said.
American Family’s partnership with Nest, for example, includes offering smart smoke and carbon monoxide detectors to homeowners to increase safety and potentially reduce claims.
“We and other insurers are likely going to be providing incentives for customers to have healthier and safer lives because everybody wins,” he said.
Ring’s video doorbell system, which offers video alerts that can be accessed remotely via a mobile device, could cut down on the number of break-ins and deter theft, he said. That kind of innovative technology has created a new value proposition for American Family’s customers.
“Our job is to inspire, protect and restore people’s dreams,” Gunder said. “That’s our absolute belief and therefore, keeping our customers safer is what we’re all about. What I call ubiquitous computing allows that to happen more easily than many years ago.”
The ongoing development of semi-autonomous vehicles by companies including Apple and Google also has been a trend on American Family’s radar as it relates to vehicle safety and insurance liability, he said.
“It’s a complex and yet to be clearly defined answer as to where the insurance products and services come from,” Gunder said.
Making innovation a part of a company’s culture is key to success, in any industry, he said. Engaging with startups through accelerator programs and with the talent coming out of area universities could be a starting point to driving a more inventive culture.
And keeping customers at the center of the business – letting their needs and desires dictate the innovation – is important, Gunder said.
“Not listening to customers’ needs is a recipe for decay,” he said.
