This is a tale of missed opportunity. It features an emerging trend, an industry struggling to grow and short-term decision making.

In March 2017, we picked up chatter about a concept that we thought would interest the insurance industry. We interviewed the UCLA Anderson Professor, Hal Hershfield, who had invented and developed the idea, and he clearly thought so too. Professor Hershfield was generous in describing his vision, his ambition and the benefit that he envisaged for consumers.

The idea? It’s a piece of technology that takes an image of a person’s face and modifies it digitally to represent that same person in the future, maybe in 20, 30 or 40 years’ time.

Professor Hershfield’s research showed that, when confronted by themselves in an older, more vulnerable state, people are inclined to make different investment decisions.

Hyperbolic discounting

We’re all very aware of our own inclination to take a reward in the short-term over waiting for a bigger one later. This concept, hyperbolic discounting, is widely studied. In times of recession, shoppers buy more chocolate and small cosmetics purchases, rather than go without completely when they can’t afford to buy a car or have a holiday.

So, the thinking behind Professor Hershfield’s concept is well-supported and evidence-based.

Hershfield’s believable representations of an older ‘you’ raise the question of what the results of your investment decisions might be. Recent studies of Generation Z revealed the consequences of these people having been born into a world of uncertainty: peak water, war, terrorism, global ecology choked on plastic, and other significant factors leave young people making very short-term decisions on the basis that the future is not guaranteed. 

Candidate sectors

There are a few industries that need an injection of ‘invest for tomorrow’, one is insurance. We took Hershfield’s idea to a well-known UK insurance brand. We explained the concept, but only briefly, because they were too busy to look at new ideas. Too busy doing business and making money – and when you’re selling the future, that’s a hard argument to win.

The result was that they didn’t get the low-down on emerging technology, and Professor Hal didn’t get a new customer. Two years have passed without their customers having the benefits of that technology, and any potential competitive insulation has evaporated. Hal Hershfield’s invention is having a significant impact on those consumers with access to it. Insurance companies are turning on to the idea.

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room44 is committed to continuing to bring you new insights. The value of searching for trends and seeking competitive advantage is crucial to the sustainability of business. Thanks to our constant exposure to emerging trends and innovations, we recognise unique opportunities in ideas that, at first, might seem disconnected.

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