Insurers experiment with new technologies and partnerships to transform their businesses, yet meaningful change rarely follows a simple path. Matteo Carbone (pictured), founder and director of the IoT Insurance Observatory, said the most transformative innovations emerge not from technologies alone, but from coordinated efforts across the complex insurance value chain.
“The insurance value chain is pretty complex and fragmented, but interconnected by many interdependencies,” Carbone said. “Because of this, it’s difficult to see technologies that can be defined as killer applications. You might have something generating significant value in one step, but if all the interconnections are not optimized, it’s difficult for that single innovation to become truly transformative.”
Carbone highlights personal auto telematics as a case in point. Usage-based insurance (UBI) in North America initially focuses on pricing sophistication, but the broader potential of telematics can influence distribution, compliance, and claims. “If you keep this new technology limited only to pricing, the impact is pretty limited. The agents need to be on board, compliance must review, and the product must effectively leverage the data,” he said. “Progressive, for example, built an organizational transformation around telematics. Others with the same technology struggled because they didn’t address the interdependencies.”
Carbone emphasizes the human element in insurer–vendor relationships. “I’ve seen insurers spend too much time seeking the perfect data or technology provider, rather than the right partner,” he said. Successful partnerships often depend less on having the most advanced solution and more on cultural alignment, openness, and a willingness to co-create.
“The same solution in two different contexts can deliver completely different results,” he said. Vendors aligned with a carrier’s culture and able to navigate operational and regulatory hurdles often deliver solutions tailored for real-world impact.
Implementing technology is rarely just a technical problem - it is a leadership challenge. Carbone says transformation requires overcoming internal biases and proving that new approaches can deliver tangible business value. “You need to be pragmatic, not fall in love with the last shining thing, and focus on what can generate concrete impact,” he said.
He also highlights the importance of discipline in execution. “Nothing happens overnight. If you start a journey that won’t deliver evidence for five years, you’re unlikely to finish it. You need intermediate steps, early wins, and a process to monitor progress. This builds and maintains organizational commitment.”
Carbone says the difference between front-runners and followers is often the people behind the initiatives. “A small number of leaders have over-delivered, tried something new, and didn’t wait for the CEO or board to approve,” he said. “Many global innovations started because a team did something no-one else tried. Then competitors copied, creating a virtuous cycle of innovation.”
He adds that budget, technological depth, or size matter less than culture and leadership. Organizations that foster creativity, support risk-taking, and align teams around clear objectives are most likely to transform meaningfully.
As insurers explore IoT, telematics, AI, and other technologies, the lessons are clear: technology alone is insufficient. Strategic partnerships, disciplined execution, and empowered teams remain the critical ingredients for sustainable innovation in a sector defined by interdependence and regulation.
