3-D printing has been hailed as one of the technological innovations of the century. You can develop prototypes quickly and easily without expensive manufacturing. You may soon be able to use them to print medicine or organs in remote corners of the world. In the rush to embrace the good from this kind of printing it’s possible that insurers haven’t realized the risks associated with 3-D printing.

Even at the moment when 3-D printing is limited to plastic and metal objects the risks are substantial. For example, you can already print a hearing aid and that means more complex devices are not far away from being realized through 3-D printing.

New Risks

The most famous use of a 3-D printer to date was to print a gun. That’s right, a working firearm that required a single steel pin (in addition to the printed mold) to work. There’s a substantial risk that unrestrained 3-D printing may enable employees to introduce significant risks to themselves and others in the workplace and the wider world. The pattern for the gun has been widely disseminated online.

Then there are the potential risks associated with the heat of 3-D printing. It’s a much warmer kind of printing than paper printing and that increases the fire risks within 3-D printing environments.

Then there are the intellectual property implications as 3-D printing becomes more sophisticated it’s going to become very easy to print your own iPhone or possibly even your own Porsche. That’s going to represent a huge problem for those manufacturers that rely on exclusivity to drive their sales and the arena of IP protection is likely to become extremely combative with the appropriate increases in legal fees.

Finally, there’s an increased risk of catastrophic economic damages to firms that use 3-D printing if their designs are duplicated or stolen via data hacking or loss.

Insurers in the UK need to draw attention to the increased risk profile of 3-D printing in a work environment and ensure that their insured parties understand these risks and are paying the appropriate premiums to cover those risks.

It’s unlikely that a major catastrophe will happen immediately; the technology’s still too new and remains applied to specialist applications today but it’s also not that far away either. The evolution of technology suggests that insurers can’t afford to wait before reacting to 3-D printing or someone could get burned.

3D Printing and Insurance


The End of the Insurance Underwriter?

by nickk on August 4, 2014

Technology brings change; it’s inevitable. Most change is positive; it makes us more productive, it allows us to do things more safely, it brings convenience but there is also disruptive change. A recent paper from Oxford University sheds light on a change that some in the insurance industry will not appreciate; “The Future of Employment: How Susceptible are Jobs to Computerization?” picked insurance underwriters as the 5th most vulnerable profession in the world to lose their jobs to the rise of technology. Insurance claims and policy processing clerks may also gulp if they hear that they were 14th on the list. The study was a big one too – it looked at over 700 roles in the corporate world today.

Why are these jobs at risk?

The paper identifies the risks to insurance underwriters (and claims and policy processing clerks) as being one of new technologies that reduce risks (such as the driverless car) and also of new technologies that make it much easier to automatically calculate risk (the era of big data is upon us).

It’s also worth noting that the authors are not saying that the process of replacement by computer will be immediate – they see a “stepping stone” in that process where many of these jobs can be outsourced overseas for a lot less money prior to being eliminated. Rather depressingly the report puts over 100 million jobs in the West (not just insurance underwriter’s jobs) “at risk” because of technology developments.

But what about human judgment?

Unfortunately, this is the argument that many underwriters are going to try and fall back upon in the next few years (if the predictions are correct). Unfortunately, it’s a bad argument. If you replace an underwriter with an algorithm – the algorithm is far less likely to make an emotional response than a human being; in short its impartiality is likely to triumph over the “judgment” call more often than the other way around.

Is there any bright news in the report?

Claims loss adjusters, surveyors and risk managers are likely to think so. The report identifies one are of specific weakness with technology at the moment; the ability for technology to accurately perceive objects within “a cluttered field of view”.

Sales people and customer care may also take heart that computers are not seen to be “socially intelligent” as yet. That means; they’re not very good at handling complex negotiations or offering perceptible care.

It’s also worth noting that these changes won’t completely eliminate the underwriter from the insurance business. They’ll still be needed, to a much lesser extent, to help develop the algorithms to assess the risks on current product lines and more importantly to help develop new product lines where no such algorithm is currently available. However; this isn’t going to be of much comfort to the majority of underwriters.

What Do We Think?

We think that the “doom and gloom” of this report should neither be taken at face value nor dismissed. We see the role of the underwriter evolving to grow into something else; a role where both people and numerical skills are critical to deal with customers and analyze ever growing amounts of data. The scenario described in the report only works if all insurance products settle on a single standard algorithm for each product; underwriters are going to be needed to refine algorithms and to put a “human face” on underwriting to keep an insurer’s commercial edge.

The underwriter will evolve as the book evolved to meet the Kindle (or e-book platform) but it’s almost certain that underwriting as a profession is in for some major changes in the near future.

Insurance Underwriting Kindle


Nanotechnology and Insurance

by nickkJuly 31, 2014

There are many fields of emerging risk in technology but few are as fascinating as nanotechnology. Nanotechnology involves materials which are less than 1 billionth of a meter long. A human hair is about 800 times thicker than the average nanomaterial. It’s not too long ago that nanotechnology was really the stuff of science fiction. […]

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Consumer Insurance Companies – About to be Rated?

by nickkJuly 21, 2014

There’s no doubt that technology has the power to help the insurance industry. This week, we’re left wondering if a new development may hinder some insurers and boost the profiles of others. Traditionally insurers have been rated on their financial performance and perhaps their stockholders. These measurements are great if you want to invest in […]

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Is It Time for Your Insurance Brokerage to Ditch Google?

by nickkJuly 7, 2014

Google’s rise to the pole position of search engines was nothing short of meteoric. Many have tried to dominate this space on the internet and many have failed. Google won’t acknowledge that the word “Google” has become a verb because it would damage their trademark but the name has become truly synonymous with searching for […]

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Selfies to Settle Car Insurance Claims?

by nickkJune 23, 2014

Last year, the word “Selfie” entered the English language officially when the Oxford English Dictionary finally included it in the dictionary. They also made it their word of the year for 2013. For the uninitiated the “selfie” is simply a photo you take of yourself. Once you’ve taken the shot; it’s normally uploaded to a […]

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Why Aggregators are Beating the Insurers and Winning Customer’s Hearts and Minds

by nickkJune 19, 2014

Last week on our sister site; we looked at the reasons that User Experience (or UX) is important to insurers looking to improve their online offerings or to move into the mobile application space. This week we’d like to review some of the findings from a recent report from Instinct Studios and show how a […]

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Bitcoin and Insurance – Cover Your Virtual Wallet

by nickkJune 9, 2014

Bitcoin is the world’s most famous virtual currency. It is an unregulated means of conducting transactions on and offline. Whilst much of the press attention regarding Bitcoin has been focused on the ability to conduct criminal dealings in a hard-to-trace manner; there has been a growing interest in the currency from more legitimate users too. […]

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5 Reasons that Cyber-Risk Insurance is Going to Be A Growth Market for the Next Decade

by nickkMay 26, 2014

In a global business environment the number one asset for an enterprise is its data. It’s data that enables the fine-tuning of products and research into new product development. It’s data that enables constant customer contact, client billing and delivery to clients. Yet, cyber-risk insurance that protects that data and the misuse of that data […]

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5 Key Factors that Sort Digital Performers from The Rest in Insurance

by nickkMay 12, 2014

As you know, here at Riskheads, we’re big fans of technology being used to improve insurance offerings. We’re firm advocates of using technology to lower costs and improve customer service. One thing we’ve realized is that while we’ve often signposted technological benefits – we’ve never taken the time to examine what makes for a “digital […]

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