The typical truck today contains more technology than a Cessna airplane. They are connected, aware, and full of leading edge technology, such that we can predict with a high degree of accuracy when they might break down. This trend, known as predictive diagnostics, changes the very nature of what an organization like Volvo sells – it’s no longer just a truck, but a service level uptime guarantee. That’s the message that I brought on stage for this dealer meeting. I guess they liked me, because they immediately rebooked me for another event a few months later!
Archives for April 2015
Through the years, I’ve done a tremendous number of talks within the insurance industry, both the life and P&C (property and casualty) sides of the business.
For years, it’s been a pretty slow industry. That’s all about to change — in a big way! Indeed, we might soon see Google, or Amazon, or some other company with big technology, lots of data, and new methods of reaching potential customers that will forever disrupt and change the industry. Some folks have been talking to this potential for a few years, as seen in this article.
I just did a talk for the CEO and senior executive team of one of the largest life insurance organizations in the U.S.
The main thrust of my talk was that the opportunity for big, disruptive transformation in the life insurance industry is now accelerating, as three major trends come together.
- bio-connectivity drives medical care, with opt-in for performance oriented life policies based on real time reduction of morbidity stats. People are using health and fitness monitors on their iPhones. If they can show good results from their health and wellness goals, an insurer would be far more likely to take a risk on them
- we’re moving into a world of real time analytical community healthcare status updates that feed into actuarial tables; think about Apple’s recent initiative with it’s HealthKit (first to be used for medical research). It’s only a matter of time before real time healthcare dashboards are part of the health system in the Western world. I wrote about that before, in my post: “Trend: The Emergence of Real Time Analytical Predictive Healthcare Dashboards.”
- every industry is being disrupted, as big, bold thinkers take over the agenda of an industry. Maybe in just a few years, we’ll see the Amazon Prime “No Hassles, Real Time, No Questions” Life Policy.
Some people in the life insurance industry see this trend, and see a threat.
The most amazing thing is that this is happening in the context of an industry that, if it is not dead yet, is certainly in the triage department:
MetLife’s premiums on policies sold to individuals last year totaled $409 million, a decline of 26% from $553 million in 2005. Industrywide sales of individual life-insurance policies are down 45% since the mid-1980s, according to industry-funded research firm Limra. About 30% of American households have no life insurance at all, up from 19% about 30 years ago. People of Wal-Mart: Struggling Life Insurers Seek A Middle-Class Revival, 25 July 2014, The Wall Street Journal
Those are staggering numbers.
Real innovators see the same trends, and see nothing but opportunity. The industry is totally up for grabs.
Of course everyone does, particularly young kids. And as you age, you still marvel at these roaring machines and the brave firefighters who command them.
A few weeks ago, I was thrilled to be the opening keynote speaker for the Fire Apparatus Manufacturers’ Association annual conference in St. Augustine, Florida. In the room were key executives from a broad cross of section of the industry.
As with all my talks, I did a tremendous amount of research — its fascinating what you can find with some very targeted searching and analysis. That’s why I’m known for the customized insight I provide in my talks.
What I learned from this industry is the perfect allegory for what is now happening in most major industries — the acceleration of what is known as customer-focused, or better yet, customer-initiated innovation.
For as long as there have been firetrucks, the industry has operated pretty well much the same. The companies that manage these complex vehicles determine what it is they plan to build, present it to the customer (cities, towns, airports ….), who might choose to buy it, or not. Of course, through this time, there has been tremendous change to the sophistication of the offerings and the complex of the machine and support systems.
But what is also apparent is that the entire fire and safety industry is grappling with faster change, such as:
- the rapid emergence of new hazards and risk (roof photovoltaics & solar present complex new challenges for large industrial or residential fires; there have been several cases of a fire chief pulling back his team due to uncertainty in terms of assessing risk)
- faster, more complex challenges (new chemicals, nano materials, more pipeline risk with the rapid growth of shale oil, as well as increased rail transport risk)
- the rapid advancement of science (arson / forensic skills and knowledge requirements are accelerating at a furious pace
- even such things as rapidly fluctuating community size (100,000 people for tailgate parties) leads to the new emergence of new risk that must be properly managed from a safety perspective.
- and lots more!
What’s the impact of all this change? I quickly started to discover a lot more folks in the industry talking about ‘Apparatus Architects‘ – fire professionals who work for cities or towns or airports or others, who now specify what they need, given the unique risk within their community. They’ll then, to make it very simple, ask the apparatus manufacturers to build them according to spec.
In other words, the innovation pipeline has gone ‘upside down.’ The customers are driving the innovation that they need; successful apparatus manufactuers will adapt to this change, or find themselves falling behind.
I’ve been writing about this trend for well over ten years. And it’s happening in more and more industries, and the pace at which it is driving industries is speeding up. Customer-oriented or customer-initiated innovation is one of the most powerful, transformative issues in every industry today. What’s happening with firetrucks provides a good overview of just what is at stake.
Of course, that’s not just all — there’s more to come. I threw in a good sampling of future trends that will provide more change, including:
- aerial drones linked to in-truck multi-screen video system
- robotic building explorers linked to real-time, 3D location databases
- instant spectrometry air-sampling analyzers with intelligent fire suppression technology suggestions
Customer-oriented innovation and rapid technological change define the future of most industries today. Pay attention to it, and think about firetrucks!