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The term “digital divide” was coined in the mid-1990’s by consumer groups who were concerned that the growth and spread of the Internet would lead to those who had access to the Internet, and those who did not.

Executive Summary

Some insurers are already on the road to the mature stages of digital transformation—digital evolution and digital intelligence. Others are just beginning to build their digital houses. Here, X by 2 Principal Oleg Sadykov describes the digital divide, highlighting the ways in which modern digital platforms can let carriers "zoom in" to individual risk characteristics, give customers 24/7 access to information and support, and ultimately allow carriers to be proactive in anticipating customer needs.

The digital divide definition has expanded to include access to healthcare and education, to name just a couple of key areas.

But the root cause of any digital divide is some sort of digital transformation.

For example, the creation of the public Internet and the e-commerce platforms it engendered was a digital transformation. The digitalization of healthcare and the ability to work remotely are the results of this most recent digital transformation cycle, one that has the potential to create a digital divide in the insurance industry.

Digital transformation in the insurance industry began late compared to other industries. It started slowly, about a decade ago, as cloud services, smart devices and the promise of advanced analytics began to move the industry toward a more digitized business processing model. Some insurers began to develop data and application architectures that could support the move to a more digital world. However, those insurers were typically the ones with deeper pockets and more resources, and whose strength in the marketplace allowed them to make the necessary investments. They developed digital strategies and architectures that laid the foundations for leveraging cloud services, predictive analytics, machine learning, artificial intelligence, next-gen data, cyber risk solutions and in some cases blockchain.

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