Best's Review


At Large
2020 Was a Time Machine That Flung Insurance Into the Future

Rather than introduce truly unique disruptions to the insurance industry, 2020 forced insurers to speed up existing plans to modernize their businesses.
  • Bill Pieroni
  • April 2021
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The year 2020 is rightfully being recognized as one of tremendous disruption and profound change. Many have framed it as a series of unforeseen, interrelated events which created unprecedented upheaval. For the insurance industry, 2020 was a watershed year—but it didn't introduce new disruptions, it accelerated what was already occurring.

Like a time machine, 2020 seemed to transport us from 2019 directly to 2030, over a span of months rather than years. The majority, if not all, of the challenges imposed on the industry by the global pandemic were known. Forward-thinking organizations positioned themselves to address these future inevitabilities. The market forces were already underway—the events of 2020 simply accelerated them and heightened their time frame for impact. In months, the industry gained insights, and confirmed the accompanying imperatives, that would have taken years under normal circumstances—but were nonetheless inevitabilities.

The insurance industry is better than any other sector at identifying and managing risk. Risk can be assessed, codified, transferred and managed. The risks associated with the pandemic could have been known and in fact some organizations were relatively better prepared, particularly in the insurance industry. For many that found themselves unable to cope with the challenges of 2020, the problem was confusing the unknown with the unknowable.

Despite their best efforts, renowned experts may struggle to predict when a financial market will crash, or where a hurricane will make landfall—sometimes being caught completely off guard. We know that each of these things will happen eventually. While their timing may be unknown, they are inevitable; they are risks, not unknowable concepts.

True uncertainties—events with unknowable frequency or severity—cannot be readily anticipated or mitigated. Unfortunately, many of us have a bias toward labeling issues as “unknowable” when the cost and complexity of understanding them is material, particularly in organizations dominated by a culture of conventional wisdom, leadership that resists being questioned, and anecdotal decision-making which has been reinforced by a track record of positive results.

The global pandemic itself is just one example of a risk that has been treated by some as an unknowable uncertainty. The future inevitability of technology and digitization in our industry is another example.

Digital transformation has been an investment priority for many industry leaders for some time. However, for nearly half of our industry, there has been a prolonged underinvestment in digitizing the enterprise. Now, with insurance stakeholders compelled to interact with colleagues and customers alike through digital channels, even those who were most skeptical of the digital imperative are finding it impossible to dismiss.

The pandemic has increased transparency and a sense of urgency around the danger of “digital debt.” Those who treated the technology imperative as something that could be deferred given the uncertainty have seen reduced current and future viability. Those who understood the importance of technology, and the accompanying risk of underinvestment, have systematically invested in digital capabilities over the long term. These firms are now better positioned to identify and capture market opportunities, deal with challenges related to the pandemic and macroeconomic forces, and take advantage of competitor vulnerabilities.

2020 flung us into the future, ready or not. Those who took steps to mitigate the risk of digital obsolescence are ready.

Best’s Review contributor Bill Pieroni is President and CEO, ACORD. He can be reached at

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