Innovation. Talk to you a little bit. Everybody sees the title of our discussion today is leveraging technology to drive innovation. Really that’s what we’re hoping to get from the last two days here at this conference. Really innovation is just defined as new themes and methods. We’ve learned a lot of new themes and methods here over the last couple of days. We thought we would target today’s discussion on technology driving do themes and methods, innovation, with regards to expense management, financial performance for both the independent adjusting carrier, as well as the independent adjusting firm, as well as the insurance carrier.
Report came out last year, a paper on technology and insurance industry. In that report, about 80% of carrier executives feel that the number one external factor impacting our industry now and in the future is technology. The majority of us feel that technology is here, and it’s going to change us whether we want it to or not. Now that same report, those same carriers, they’ve invested less than half percent of the revenue of profit, revenue, so a whole year they get collect premium and all their investments revenue, only half percent they’ve invested in innovation technology. Most of that money that they’ve invested in on incremental innovation. Innovations is just upgrading stuff that they already do that they already have.
The survey came out and it said, hey, we know it’s a big issue out there, technology, innovation. We’re just not investing a lot of money in it. Keep that thought in mind as we continue down the road here and we’re going to prove a point.
Another recent industry paper came out and talked about something that a lot of us call leakage, but we’ll call improvement opportunity or IO. What is leakage, or improvement opportunity, IO? It is simply defined as minimum estimate of overpayment of claims, which we could have avoided or mitigated if we had applied best practices or better practices.
Right now, insurance carriers could really drive down risk cost, ultimate risk cost, by minimizing leakage or minimizing improvement opportunities, IO, which we’ll call it today. How about independent adjusting firms? Independent adjusting firms, they can also drive down that IO. Right? If they separate themselves against their competition they can become a superior organization. Right now, driving down improvement opportunity or leakage as some of us know it, is one of the top strategic initiatives in the industry both on the carrier side and the independent adjusting firm side.
Right here our panel of speakers are going to give us different perspectives from the independent adjusting firm and the independent adjuster perspective, as well as a carrier perspective. First we’re going to start with Quin. Quin again is from the Aon Ward Group. They do a ton of industry consulting and research, so Quin is going to give us some information to give us a baseline for our discussion today. Quin. Now Aon has conducted studies with regards to how insurance companies embrace or use technology to drive innovation. What can you tell us about some of the philosophies or themes out there with regard to that?