How will the world change in the next 10 years

Vol 47: Issue 3 | October 2024

In short

• Every technological epoch lasts just half as long as the last, and we are entering the AI period.
• AI will help us innovate, develop new technologies and respond to new emerging risks.
• Insurers will need to watch for signals of change across different demographics in the APAC and in other sectors to respond with products that customers need. They need to ask themselves how a new entrant would reinvent insurance.

If it seems that change is approaching faster than it ever has before, that’s because it is.

A concept known as the law of accelerating returns, says futurist Steve Sammartino, states that each subsequent technology arrives faster because the previous technology helps people invent it.

“If you look through each of the technological epochs of human history, each of them lasts half as long as the previous one,” explains Sammartino. “For example, the internet has been around for about 30 years. The smartphone has been around for about 15 years. We’re now entering the AI period, which will last about seven and a half years, and after that we’ll enter the quantum age.”

This means technology, ideas and trends appear, are relevant and then become obsolete more quickly.

It also means there is less certainty than there used to be, says foresight practitioner and professional director Melissa Clark-Reynolds ONZM, managing director of FutureCentre.nz.

“I’ve been a CEO and an entrepreneur for my whole career, including having been CEO of New Zealand’s largest private workers’ comp insurance company,” says Clark-Reynolds.

“In the pre-digital world, there was a belief that you could determine your own future. We all had motivational sayings on our walls and the idea that we could manifest the future we want into being. We could create a preferred future in the boardroom, then the executive would come up with a strategic plan that would execute against that perfect vision.

“Somewhere in the last 20 years, that stopped working. What we see in a digital world is that the world is a much more connected, confusing, chaotic place than it used to be. As a futurist, the most useful thing I can do is to help people envisage multiple futures and how we might nudge towards the futures we prefer but also become really resilient so that when the futures we’re not keen on start emerging, we can respond quickly.”

And so we find ourselves in networked, platform-oriented societies and economies. We exist in an environment in which local taxi companies give way to global car-sharing apps, where single-border wars in Eastern Europe damage supply chains around the world, and where a virus can forever alter the way people think about how and where they work.

Technologies that enable change, and disruptive business models that are making change happen, introduce entirely new types and levels of risk, says Clark-Reynolds.

“We won’t know what all of those risks are until some of them come and smack us,” she says. “Even if we think about the rise of cyber threats, you used to have an idea of where they were coming from. But the networks have made it much easier for people who have malintent to do that and to hide. Those networks have made it much easier for them to be opaque.”

What can we expect in a decade?

For insurers whose role it is to help protect from and mitigate against these risks, it is more important than ever to know what is on its way.

So, as the world — and its social, economic, geopolitical and climate drivers — changes at a frantic pace, what might we expect when ANZIIF celebrates its 150th anniversary in 2034?\

“It’s said that within 10 years, many of us will have humanoid robots living with us in our homes, carrying out tasks that we teach them. Imagine the change such technology will bring to society, to business and to the concept of risk. The next decade, leading up to ANZIIF’s 150th anniversary, will require skilled management by insurers as AI brings change at a previously unimagined pace. In this story I’ve explored the challenges and opportunities.”

“AI is our last invention,” says Sammartino. “When we get to 2034, we never invent anything again, because AI invents everything after that. We’ve always used the other tools to help us invent the next tool, but not anymore. AI can do that itself.”

Also, by 2034 we’re likely to have hit what Sammartino calls “longevity escape velocity”, meaning it will not be unthinkable to consider the option of living forever.

“If you’re selling life insurance, I hope you’re selling a good policy,” he says.

This extended life option will come as the result of several developments. They include regenerative medicine, which doesn’t just fix broken body parts but actually returns cells to their original and strongest state.

There is also a technology called CRISPR (clustered regularly interspaced short palindromic repeats), which makes the editing of DNA possible. 

It means people could selectively do anything, from changing eye colour to removing cancer genes. CRISPR is already being used in the food space and will likely be used broadly on farm animals before it becomes fit for human use. New Scientist reports, for example, that “a team in China has created goats that produce a third more cashmere than normal goats”. 

Then there are nanobots — tiny robots that can be programmed to navigate their way through the bloodstream and kill cancer cells, for instance. These are also in use today.

“Artificial intelligence will help us unlock more of this technology more quickly,” says Sammartino. “It will help us find better ways to develop regenerative medicine, to implement CRISPR and create nanobots.

“In addition to that, we will be able to join our brains to cognitive AI, meaning we can have a PhD in whatever subject we want, no device required. It depends on how Star Trek you want to get, but there will be a lot happening in the next 10 years. It’s going to be very interesting.”

It’s all about AI

Justin Flitter is the founder of NewZealand.ai, an organisation that helps businesses leverage AI at work and runs workshops, advice sessions and events.

“It’s 2024, and sometimes there’s just a better way of doing things,” says Flitter. “Technology that we implemented two or three years ago is not fit for purpose anymore. It’s obsolete, and that can be a real challenge for a lot of businesses.”

The rise of AI out of research labs and into people’s browsers has radically changed the way people access knowledge and information.

“We never start a task from scratch, like a PowerPoint presentation, because we have a text prompt we can use,” says Flitter. “AI assistants and co-pilots like ChatGPT and Perplexity and Microsoft Co-Pilot, they automate previously manual tasks and they do it in a heartbeat.”

If we apply that idea to a business — the concept of reaching out and receiving relevant information immediately — its power becomes clear. Typical businesses have disparate data sets, including CRM, accounts, file storage, customer service and more, that are not even held in the same databases or on the same platforms. This makes it difficult to find relevant and accurate information to inform great decision-making.

When a business uses AI well, that problem is resolved.

“With AI, any staff member, whether they’re junior or senior, can access the information they need to get work done faster and better,” says Flitter. “That is the crux of how generative AI is transforming business today.”

Individually, by 2034 we will all be working with AI agents / assistants, says Flitter. They will read and sort our emails, send and process invoices, plan and send quotes, assign workers to projects and order parts for upcoming jobs.

Will this make people in back-office roles redundant? 

Yes, that’s highly likely, says Flitter. But it’s also timely, as almost every sector is suffering from a lack of skilled workers.

“We don’t have enough humans,” he says. “The population [growth rate] is diminishing and so it will become harder and harder to find skilled workers to do what needs to be done. We can’t just keep putting bums on seats to solve business problems. We have to use technology.”

What does this all mean for insurers?

With change comes risk. The challenge over the next decade for insurers will be around the fact that a previously unimagined pace of change will diminish their ability to identify risk before it’s too late.

Sammartino says there will be two types of risk to focus on: protection risk and invention risk.

“You have to protect your assets and protect your business, and most large businesses default to protection risk,” he says.

“Smaller and start-up companies tend to do better with emerging technologies because they don’t have any protection risk. Start-up companies don’t have an existing business to protect. They have no infrastructure, no revenue, no shareholders, so they take bigger risks because they’re not protecting anything.”

This leads to a positive known as invention risk. It is a calculated risk that is necessary for innovation to occur, to create value and demand in the market.

As larger businesses focus on protecting what they already have and smaller businesses take greater invention risk, smaller businesses stand a better chance of finding long-term success. Disruption will accelerate.

Flitter says current technology creates the type of risk we’ve not imagined before.

“The first is about identity,” he says. “Is the person you’re talking to on the Zoom call actually who they say they are, or are they a deepfake or face-swapping? How do you actually authenticate that the customer or client you think you’re talking to on Zoom is your actual customer?”

In May this year, engineering giant Arup fell victim to a deepfake scam that resulted in one of its employees in Hong Kong paying out more than US$25 million to fraudsters.

“That’s going to become more and more common,” says Flitter.

“Other risks will stem from bring-your-own-AI to work. That’s where employees want to use AI to get their job done faster and smarter, but employers are not providing them with enterprise-grade solutions, so they just use ChatGPT on their phone and they share sensitive customer or company data on a public platform that then shows up in someone else’s response.”

The only solution to such an issue, he says, is higher awareness among workforces of such risks and better training around how to use technologies safely. Giving staff tools that make their work easier is also a part of the fix.

“This is not new,” says Flitter, “but the implications of the risk are magnified 10 times with AI.”

It’s not all bad news, says Clark-Reynolds. With risk comes reward.

“The distribution of this technology creates both risk and opportunity,” she says. “The strength of the network is that a piece can fall over and you can replace it with another piece of network. So, you’ve got risk, but you also mitigate some of that risk quite quickly.”

For those outside the start-up and small-business realm — businesses in the mainstream corporate space — it is possible to monitor the business landscape for signs of what is coming.

“Things still happen slowly before they become a success,” says Clark-Reynolds. “I call it ‘slowly, slowly, slowly, suddenly’.

“Subscription-model businesses have dominated for the last 20 years, for example. Now you can pretty much have anything you want on a subscription, from your food to your roof to your car and your gym membership. That has taken 25 years to become normal but when it started, a lot of people said it would never work.”

Businesses then, including insurers, can learn to look for signs, and they don’t have to respond immediately. They do, however, have to respond more quickly than they might have done in the past.

“If you’re in the mainstream, you can monitor the signals and work out which of them are getting a little traction and which of them you might want to put some rocket fuel under,” says Clark-Reynolds.

In terms of microinsurance trends that we’re seeing out of Asia in particular, she suggests insurers observe demographic changes in their own markets.

“We’re seeing less home ownership among young people,” she says. “We see less job security. If you work with a futurist and a demographer and an economist, you might create some hypotheses about what they might want to protect, and how.

“They probably want to insure their laptop. They might care about insuring their couch. Can you produce very targeted products offered at mass market, because you’ve got a whole generation that behaves a particular way?”

How might insurers need to change?

In the business space, Clark-Reynolds points to such developments as Tesla having offered a residential roof service for the past eight years in the United States. Every tile is photovoltaic and therefore produces electricity. The homeowner might own the roof outright and so own that electricity. 

Or they might have a subscription service for the roof. Or they might pay nothing while somebody else profits from the electricity.

Similar models are developing around photovoltaic windows on buildings and carpet tiles in building foyers that are purchased as a service, owned and replaced by the carpet tile company every few years.

“The building tenants pay a subscription to have certain services, and a lot of insurance companies have not yet caught up with this idea of how they insure a building where components once considered structural are not actually owned by the building owner,” says Clark-Reynolds.

Insurers can take their own risk-management approach to the future, says Clark-Reynolds. However, they must beware of becoming laggards.

“The worst thing that can happen is that you’re taken by surprise because you’re not looking at the right thing,” she says. “Instead, you’re keeping an eye only on the companies that look like yours.

“The downside of insurance companies having all that legacy and history is that when new business models come along, we tend to be a bit dismissive. That’s the bit where we need to be a bit more humble and think deeply about if people from the outside come in and reinvent what the sector does, how would they go about it?”

Read this article and all the other articles from the latest issue of the Journal e-magazine.

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