North American perspectives
Technology and innovation: from concept to reality
As part of a new feature to gather views and perspectives from your side of the Atlantic, we reached out to insurance specialists to get their strategic observations and real-life examples of how tech and innovation have made a positive difference in their world.
The contributors are from retail and wholesale intermediaries based in the US.
Retail broker perspective
Insurtech has moved beyond its ‘disruptive’ initial aspirations and has begun to focus on enablement and efficiency. We see this as a positive development and acknowledgement that our industry is more complex and nuanced than perhaps many outsiders might have once believed. Many Insurtech solutions are mature platforms at this point and have unlocked many benefits for all key industry stakeholders.
Real life examples
We have been active participants in the deployment and innovation of Insurtech platforms for several years. One idea from our innovation initiative, was to simplify complex middle-market insurance submissions to carriers. The result of that idea formed into a full-scale company called Highwing and is now being deployed by some of the largest brokers in the country. We continue to scour the marketplace for early-stage Insurtech solutions that might help drive benefits for our associates and/or clients and make the process of procuring and managing insurance more pleasant for all.
Our involvement with BrokerTech Ventures has led to a number of new engagements with technology companies from both an operational and financial standpoint. We participate in BrokerTech Ventures’ capital fund to deploy in strategic investments. We have also created our own fund to deploy capital to emerging Insurtech companies and concepts that promise to bring our industry into the future.
Beyond Insurtech, we are active participants in the emerging future economy, which is decidedly tech-enabled. The digitalisation of every aspect of modern life will result in new risks, new challenges and new opportunities. We are ready to meet the fourth industrial revolution where it begins to intersect with the insurance industry. From cryptocurrency to the metaverse to internet-of-things at scale, we are participants, observers, advisors, and investors in the economy of the future.
Key developments in tech and innovation
- Transition from displacing brokers/carriers to enabling them.
- A more open-source strategy for new Insurtechs to work in concert, rather than the traditional siloed approach.
- More collaboration from industry stakeholders; no one doubts Insurtech as they may have before.
Wholesale broker perspective
Over the past several years we’ve seen ‘concept to reality’ play out in real time. It has escalated over the last two years as many organisations had to, by necessity, adopt new technologies to survive. I‘ve heard it described as ‘Covid Infused Technology’ where the initial thought of a virtual conference or meeting was foreign to many. Now they are infused into our everyday lives and we feel it’s the accepted way of conducting our business. The impact on the insurance industry was not only noticeable, but led to significant premium rebound and profitability.
It seems that the traditional way of conducting business is under attack from many fronts and in large measure led by digital disrupters, Insurtech firms and private equity money. With little infrastructure, work from anywhere technology, and persistently low cost of capital (interest rates) the entry costs to start-up is minimal compared to traditional models.
As we all fight to attract new and existing customers, innovative technologies, driven by Insurtechs, are disrupting the way we conduct business and appealing to a broad audience. As we begin to come out from the other side of the pandemic, we see new and innovative ways to distribute products and services. Insurtech investments are on track to exceed USD15 billion with a large concentration of that investment on marketing and distribution. The customer experience is critical, and we are all working hard to add value across the process.
As carriers rush to create new products, they must build the ease of doing business into the value chain, with Insurtech firms being a perfect incubator to take ideas to market very quickly, especially in the E&S marketplace. Customers are increasingly prone to consider insurance products as generic and gravitate to selecting the best delivery and payment technology as a determining factor. As a broker, we consider this a challenge, but also a great opportunity.
Addressing staffing of health care professionals as the industry sees more burnout is an ongoing concern, and having the ability for workplace flexibility could be a difference maker. Many employers are utilising technology solutions in their strategies to combat shortages while also improving patient experiences through telemedicine, wearable monitoring devices and high-tech mobile health clinics. Doctors are able to analyze medical records scans and diagnose illness in patients with the use of AI and computerized vision technologies.
Technology, AI and innovative life science solutions have been forefront in the healthcare industry for years. The pandemic has simply made the demand for the rapid development of alternate, viable delivery solutions to move forward at a faster than ever pace. The balance between competition and collaboration has shifted out of necessity to help forwards development possibilities.
Concepts we see as reality
Improved efficiencies through machine learning and AI to make better and more consistent decisions, based on data driven analysis. Includes, claims, underwriting / risk selection and administration.
Payment options for insureds.
User friendly software products, allowing the non-IT professional to update and manage apps to enhance both the user and customer experience.
Work from anywhere, empowers employees to take more control, while back up with data and information previously available only to C-suite executives.
Virtual assistant technology is being widely accepted and can allow both insureds and producers to get questions answered 24/7.