Part 4: Strategic Outlook
Next Generation Risk Engineering Market Study
This is the final installment in a 4 Part series publishing the results of the Next Generation Risk Engineering Market Study.
Strategic Outlook - Plotting the Course Forward
The rising cost pressures, slow growth in premiums, and increasing demands for tailored services all reinforce the need to invest scarce money smartly. As such, in the last section of the survey we asked Risk Professionals to look ahead and shed light on what they see coming over the horizon.
Key Enablers for On-site Assessments
As referenced in the previous section, 48% of respondents deploy infrared thermographic capabilities in the field today. This is a key enabler for assessing exposures within systems under normal operations to understand where weaknesses and stresses might exist in electrical, machine, and building installations. The deployment of thermography will expand as it is already a standard offering among many companies resulting in the necessity for others in the market to also offer such services. Universal adoption of thermography will benefit carriers as well as clients due to the cost-efficient benefits of reducing fire and accident liability related maintenance risks as well as construction risks.
In addition to thermography, rounding out the top 3 enablers are on-site tablets and distance measure and auto-sketch tools, which are key technologies currently deployed, and, also similarly to thermography, are expected to become part of industry standard for site assessments. (Figure 12)
Perhaps the future utility of some of these technologies is not yet envisioned as they are not yet cost-effective or remain untested in the field; however, the quality of the technology continues to improve as do the opportunities for usage. Automated or semi-automated drones likely fit in this category. The Risk Engineering use case for this technology is well understood as remotely piloted aircrafts are currently used in the industry to gather data on building structures and roofs. However, removing the human pilot from the equation raises technical and regulatory challenges that remain unresolved. This is likely the case for virtual reality, of which significant investments are being funneled into across a wide array of industries, but perhaps not enough Risk Engineering use cases have been conducted yet.
Key Enablers for Virtual Assessments
In the increasingly connected digital world through the Internet of Things and globalization, the expectation will continue to rise for Risk Professionals to leverage the right information at the right time in a cost-efficient manner, which pushes the Risk Engineer to be able to assess a risk remotely. This expectation was confirmed by the majority of survey respondents who stated they expect virtual assessment activities to increase in the future. (Figure 13)
In response to the question regarding what key technologies will best enable Risk Engineers to conduct such virtual assessments, it was somewhat surprising that the rankings given for aerial data and client site sensors demonstrate that expanding the data sources currently available for making a risk determination is a lower priority compared to making investments to better leverage data already available.
This suggests that the focus for the future is in empowering engineers to more efficiently process available information in a fast and accurate manner. Technology to automate data extraction and risk scoring is deployed in the industry today in limited capacity. However, looking forward, with the adoption of machine learning-enabled text mining, the engineer could already be equipped with an initial risk rating. This could be used in triaging a backlog of accounts and the risks that underlie them in order to empower the engineer to best allocate his or her time. Also, in an effort to more efficiently process information, survey respondents placed a high value on obtaining the future capability of expedited risk assessment through 3rd party data integration dashboard. With a growing number of 3rd party data providers and the exponential growth of available risk data, Risk Engineers are looking for solutions to harness and leverage this data. To do so most effectively, the technical infrastructure is required to enable data integrations and transformations to provide the engineer actionable data in an easy to consume manner, such as on a configurable dashboard. Read more in-depth information regarding this subject in our recent article, Tackling Information Overload; Equipping the Digital Risk Professional .
While this study is the result of a compiled analysis of a diverse group of Risk Engineering experts, it sheds light on the overall pulse of an industry in transition. The job expectations and tools of the trade for a Risk Engineer are fast changing, mirroring the disruption facing the broader insurance industry.
So how should a decision-maker who is responsible for the charting organizational strategy or making investment decisions on where to spend scarce funds read these results?
A few key takeaways bubble to the surface for the respondents regardless of market position, region, line of business or market segment focus. In considering addressing current pain points, as well as strategic outlook, emphasis for investment in technology and enhanced business practice has a few main drivers.
- On-site enablers: Boots on the ground is, and will for the foreseeable future remain, a critical task of Risk Engineering. However, the criteria for deploying an engineer for a site visit—versus leveraging remote risk data gathering techniques and tools—will only grow more stringent. Therefore, it is critical the engineer on the ground is equipped with the tools to most effectively gather and report back decision-enabling data. Though technologies such as automated drones and virtual and augmented reality remain “futuristic” capabilities at this point, the list of use cases and applications continues to grow, and it is not challenging to see their future usage.
- Client-centricity: Relatedly, client relations will remain a key metric of success. As such, bolstering client-centricity capabilities is critical in this people-driven business, perhaps more than ever despite an increasingly digitized world.
- Augmented analysis: The amount of risk data available is vast and growing, and respondents noted that access to this data is not the core issue; instead, organizing, structuring, and analyzing the mass amounts of data is the focus. Analytics solutions using artificial intelligence and machine learning that enable efficient risk triaging and ultimately faster, less error-prone decision making will have industry-moving implications.
- Systems & Infrastructure: Not to be overlooked, the infrastructure and architecture supporting the flow of data and enabling workflow and collaboration are critical elements to ensuring future success. The Risk Professional is only enabled by the risk data he or she can assess; therefore, it is critical to assess current and desired capability maturity and understand what the right tools are to support the organizational strategy.