IIG News

IIG Insights: Making Sense of InsurTech

Darryl Grater (DG), President of IIG, kicked off the webinar and welcomed and introduced Craig Olivier. Craig hails from Genasys where he has been for the past 20 years. He has plotted the fastest rise to directorship in the company. He also opened the first international branch in London. In 2020 Craig was appointed as the Chief Technical Officer for both South Africa and the International business. Craig’s goal in presenting this topic was to highlight the benefits of creating eco systems of value by leveraging your core insurance back end throughout the insurance value chain. Craig is passionate about Insurtech and the value and disruption it presents to the insurance sector.

 Craig defined Insurtech as a combination of technology and innovation to bring about better insurance offerings and business solutions. There has been exponential growth in the Insurtech space over the last 10 years. Craig noted the global spend in this space was 6 billion dollars in 2019 and this number is expected to grow by 10.8% by 2025.  

Insurance companies will need to look outside of internal innovation and organic growth to increase their market share. We can no longer just rely on traditional methods to stimulate growth. He feels that this stimulus will come from outside the industry and requires fresh eyes, looking for new opportunities and solving for these with the correct tech solutions to move the industry forward. He warns against using technology for the sake of it but rather finding the right solution and the correct application.

According to Craig, the largest disruptor is big data. He coined big data as the new oil and the ability to access various data points, which allows for the possibility of understanding, mitigating and underwriting risks. It helps us to understand the consumer better and provides insights into their buying behavior. He presented a case; when a customer purchases an airline ticket, if there is a data access point, a customer can be sold travel insurance at the very same time.

He also touched on IOT devices that can monitor and track information by way of sensors or trackers that also assist in mitigating risks.  Technology can also assist in the following areas;

  • In terms of claims fraud management, it helps to drive down loss ratios and total costs for the Insurer. Other opportunities that big data presents, is what Craig referred to as the micro moment, which speaks to being able to market the right product at the right time to the right consumer
  • Provide for digital communication channels available to consumers at their convenience
  • Self service allows for consumers to interact in a transparent way.

Craig then presented a video clip highlighting the benefits of Insurtech and then went on to discuss why it is important to embrace technology. To be able to flourish in our new environment, Craig noted that companies must implement strategies to enable innovation and disruption and be able to adapt quickly if the value proposition needs to change to the customers needs.

The insurance industry is undergoing a profound transformation and the traditional methods of selling insurance are not enough to remain relevant. There needs to be more focus on self- service models and innovative products. Technology must be used to mitigate risks. Craig feels that insurers now need to focus their funding on growing innovation instead of focusing on traditional spend. Customer needs and engagement methods are evolving, and insurance needs to have digital capability to meet these needs.

When adopting insurtech Craig noted the following touch points; providing a great digital experience all along the value chain, being able to provide fast, hassle free and immediate responses, and being empathetic to the customer.

So, what is it that we need to adopt from a technological perspective? According to Craig, the insurance value chain can be split into 3 distinctive areas: enablers, distributors and full carriers

From the enabler perspective, technology and data is dominating the Insurtech space. From the distributor space, the focus is around creating marketplaces for customers to purchase product, having the ability to compare products. From the full carrier perspective, the focus is to drive down price.

Insuretech is about creating customer centricity/ being able to understand your customer and offer them multiple covers and facilitating a single view of the customer. It enables the creation of new distribution channels.

The greatest challenge to insurers is distribution through social networks and affinity partners.

The last part of the discussion focused on how to adapt to the technological changes. These include the wait and see approach, incubation on the side or ability to embrace change from the start. How do you plan to adopt changes? Will you build it, buy it or collaborate with other partners within the eco system?

Craig feels that insurers should leverage off existing technologies and apply them where needed and integrate these with your core back end platforms.

Craig then presented some practical examples of Insurtechs and where they have added value.  A couple of examples mentioned were:

  • Lemonade – looked at how to put a charity slant on covers offered. Marketing to the millennial market, tech to automatically pay claims based on AI and machine learning methodologies
  • Clover – leveraging health monitoring tools to drive preventative care
  • Zhong An – fully digital straight through process for sales and claim, massive reduction in overheads to manage such a large insurance market
  • Flock – based on drone technology -took approach of risk mitigation through educating customers
  • Root – millennial market who are happy to be charged premiums according to their on-road habits

A Q&A session followed and Darry closed the session by thanking Craig and Genasys for sponsoring the webinar event.

By: Daphne Peter