Whether by utilising data analytics to better underwrite risk, drones to assess damage, or AI to answer customer queries, re/insurers are maximising technology to ensure they are fit for future growth. This innovation is known as insurtech, and it’s allowing the industry to run business model trials at speed and at lower cost. PwC estimates that within the next three to five years, cumulative investment in fintech globally could exceed $150bn. In the global insurance industry, the pace of change is accelerating quicker than could have been envisaged. Insurtechs are helping traditional re/insurers break boundaries by:
● Transforming and optimising value chain.
● Enabling new capabilities.
● Innovating underwriting of new products and lines.
● Facilitating partnerships or investments in disruptors outside of traditional insurance.
The European caught up with Arthur Wightman, Insurance Leader at PwC Bermuda, to learn more about how the industry is capitalising on these emerging opportunities.
How is technological innovation impacting the insurance and re/insurance industry?
Arthur Wightman: More insurance CEOs are concerned about the pace of technological change than leaders in almost any other industry according to PwC’s report: InsurTechs are Transforming
(Re)insurers. Technological advances are changing business and operating models, which is challenging to an industry that is accustomed to a slower evolution rather than rapid transformation.
How can re/insurers make the most of blockchain technology?
AW: Our 2018 report: Blockchain, a Catalyst for New Approaches in Insurance, encourages insurance companies to focus on how the technology can be used in complex cases – from secure registration of users and data, to issuing smart contracts on the blockchain. The report examines some of the major blockchain initiatives for reinsurance, including B3i.
Blockchain could also bring new business sectors,
so there is potential for the insurance industry to create new products and services tailored to the needs of the blockchain community, such as insurance cover for cryptocurrencies or ICOs.
How are insurtechs enabling new capabilities?
AW: Examples of this include the use of aerial drones after weather catastrophes to assess losses and enabling insurers to process claims significantly faster than before. It also encompasses advances in data analytics and catastrophe modelling through using weather, atmospheric, or maritime data to better underwrite risk; mobile app-based technology for claims adjusting, and using AI to answer customer queries, process claims, or better understand and compare insurance policy language.
In terms of new products, escalating threats associated with data breaches and cyber-attacks have prompted
re/insurers and brokers to offer risk mitigation solutions.