Insurance's tech renaissance is at the 'starting line'
While the pandemic accelerated the industry’s digital adoption, panelists at Reuters’ Future of Insurance say this is just the beginning.
Despite running their portfolios through risk scenarios and looking at maximum loss potential, some in the industry were caught off guard by how deeply systemic risk ran through their organizations during 2020, said panelists at a Reuters’ Future of Insurance event.
“We always say we have all these unknown unknowns. You don’t know what’s truly going to happen,” said Nancy Bewlay, global chief underwriting officer of AXA XL. She noted a question brought up from the past year on “how to provide contract certainty to clients” while making sure that the objective is clear to all stakeholders.
“We looked at ourselves granularly and embarked on a journey to look at all of our products across the globe,” Bewlay said. “What is our intent, and how do we actually make sure that intention is very clear?”
She explained that doing so is “a huge body of work,” moving AXA XL to bring in technology such as natural language processing to quickly sort through contract language to “improve it and make sure it is fit for its purpose,” she said.
The other major learning from the past year, according to Bewlay, was how to conduct largely in-person, on-the-ground risk consultations remotely.
“Our teams were nimble, and we went over to things like risk scanning and natural language processing to go out and collect as much information as possible. We went to digital risk consulting and digital dialogs with clients,” she said. “We would not have thought we could convert in such a short amount of time our ability to bring digital risk services to our clients, but we’ve done over 700 of these.”
Displacing ‘rip and replace’ notions
While pandemic restrictions are lifted, in-person client meetings are beginning to resume, and the chance to merge new digital tools with in-the-field experiences is making for palpable excitement in the insurance industry, according to Thomas Anderson, head of sales, U.S. at AdvantageGo.
Noting the industry is still at “the tip of the iceberg” in terms of embracing technology, Anderson said he is hopeful that wherever “huge, ugly legacy software is sitting,” there are people realizing it is a “huge anchor” holding the company back.
“More importantly, it is on us as software and technology providers to enable them to not just rip and replace. It isn’t about ripping and replacing software anymore — that ship has sailed,” he said, continuing his nautical theme. “It is now about the wrapping of (legacy) systems in the sense that the data can be utilized almost as a data warehouse with newer technology on top of it that allows for that AI-enabled decision-making capability.”
As insurance companies further embrace the power of data and its predictive properties, the industry will become so proactive that it will become “a teacher of risk mitigation; it is going to become an educator,” Anderson said. “Insurance companies are going to bear the responsibility to provide information so that people are smart enough to mitigate their own risks.”
While the Internet of Things and telematics are becoming more ubiquitous in insurance, Anderson said this is just the start of the industry’s technology renaissance.
“I would say in five years, we will probably look back at this conversation and laugh at saying: ‘Wow, we’ve gone so far,’” he said. “We are at the starting line, and now we have to put the pedal to the metal.”
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