InsurTech Magazine - July 2021

July 2021 | insurtechdigital.com

Round Table: Redefining the insurance industry with AI?

Insurance leaders

Technology: Is automation the key to profitability in Insurtech?

THE

ONLY

THING WE SELL IS TRUST Yorck Reuber, Chief IT Officer of Allianz, discusses how digital is making insurance faster, better, and closer to customers than ever before FEATURING:

CNA INSURANCE

EMERGENT HOLDINGS

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The InsurTech Team EDITOR-IN-CHIEF

JOANNA ENGLAND DEPUTY EDITOR

WILL GIRLING EDITORIAL DIRECTOR

SCOTT BIRCH

PRODUCTION DIRECTORS

GEORGIA ALLEN DANIELA KIANICKOVÁ PRODUCTION MANAGERS

OWEN MARTIN PHILLINE VICENTE JENNIFER SMITH

PRODUCTION EDITOR

VIDEO PRODUCTION MANAGER

KIERAN WAITE

JOE PALLISER ADAM FERGAR

CREATIVE TEAM

DIGITAL VIDEO PRODUCERS

MEDIA SALES DIRECTOR

JANET BRICE

OSCAR HATHAWAY SOPHIE-ANN PINNELL HECTOR PENROSE SAM HUBBARD MIMI GUNN JUSTIN SMITH REBEKAH BIRLESON DUKE WEATHERILL JORDAN WOOD

SAM KEMP EVELYN HUANG MOTION DESIGNER

TYLER LIVINGSTONE MARKETING MANAGER

EVELYN HOWAT

PROJECT DIRECTORS

JAKE MEGEARY MICHAEL BANYARD

RICHARD TURNER

SALES AND MARKETING DIRECTOR

JASON WESTGATE MANAGING DIRECTOR

LEWIS VAUGHAN

CHIEF OPERATIONS OFFICER

STACY NORMAN PRESIDENT & CEO

GLEN WHITE

FOREWORD

DICKENSIAN-STYLE TRAGEDY If our house gets flooded, our car damaged or our business supply chain disrupted, insurance is the security blanket that cushions the blow. We wouldn’t live without it.

“It shouldn’t take a Dickensianstyle tragedy to encourage someone to get covered”

INSURTECH MAGAZINE IS PUBLISHED BY

But even if we take out policies to cover these things, all too often, we neglect the need for life insurance.

Could it be because death is an icky subject that we think won’t happen to us? Perhaps we believe it's a long way off - and therefore, not worthy of consideration?

One would think a pandemic would be a boost for the life insurance market, as people realise their mortality.

But studies show that the protection gap (those who should have, but don’t have life insurance) amounts to a staggering eight million people in the UK. Sometimes it takes a stark reality.

In my case, it was a friend, who cashed in on his life insurance, only to discover weeks later that he had terminal cancer. The fallout resulted in a mother left alone with two children, no home of her own, no security and only her meagre income to support them all.

But it shouldn’t take a Dickensian-style tragedy to encourage someone to get covered.

I personally, would like to see insurance companies speaking more plainly about death. It comes to us all and is one of the very few certainties in this world. Why shy away from it?

Companies also need to offer flexible, accessible policies to the new generation of families, so that cover becomes a priority.

Surely, if we can make car insurance appealing, we can do the same for our lives?

JOANNA ENGLAND

joanna.england@bizclikmedia.com

© 2021 | ALL RIGHTS RESERVED

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CONTENTS

Our Regular Upfront Section: 8

Big Picture

10 The Brief 12 Global News 14 People Moves 16 Timeline:

The Story of wefox 18 Legend:

Michael Neidorff 20 Five Mins With:

Seth Rachin

36

Digital strategy

Insurance’s digital transformation starts with the customer

24

Allianz Malaysia Berhad

Closer to customers through digital

46

CNA Insurance

Leveraging digital technology in the insurance industry

70

Emergent Holdings

Agility, innovation and diversity

60

Technology

Is automation the key to profitability in Insurtech?

80

Cloud & Cyber

The future of telematics in an automated world

90 AI

Is AI redefining the insurance industry?

102 Top 10

Insurance leaders

BIG PICTURE

Flood claims

Victoria, Australia

Australian insurers are facing a massive US$1.6bn in claims following the recent floods and extreme weather crisis to hit the state of Victoria.

The Insurance Council of Australia (ICA) declared a catastrophe for regions affected by significant storms and flooding, which serves to escalate and prioritise the insurance industry’s response for affected policyholders.

The worst affected area, Traralgon, saw high winds and torrential rain which resulted in the town’s creek breaking its banks. Australian insurers also faced a $1.3bn bill following the catastrophic bushfires in 2020.

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THE BRIEF “RATHER THAN REPLACING ENTIRE JOBS, HYPERAUTOMATION RELIEVES THE BURDEN OF THE MENIAL, ADMINISTRATIVE BUSINESS TASKS THAT LITTER AN EMPLOYEE’S DAY” Guy Kirkwood

BY THE NUMBERS

The Financial Conduct Authority is banning insurers from price walking in January 2022.

We asked our LinkedIn followers: “What do you think the most likely result of the new price walking ban will be?”

Chief Evangelist, UiPath 

READ MORE

“GOOD CUSTOMER SERVICE LEADS TO TRUST, WHICH LEADS TO CUSTOMER RETENTION, WHICH CAN RESULT IN INCREASED LEVELS OF PROFITABILITY”

33%

Fairer prices for consumers?

44%

End to cheap deals?

Martyn Mathews

Senior Director, Personal Lines LexisNexis Risk Solution 

READ MORE

“THE DATA BELONGS TO THE DRIVER, AND THEY WILL NEED TO PROVIDE CONSENT FOR THAT DATA TO BE SHARED” Mike Brockman CEO, ThingCo 

READ MORE

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July 2021

22%

Better customer retention deals?

570.22%

Finances Online has reported that the fastest growing life insurance company globally in 2021 is the Texas Republic Life Insurance Company which, according to reports, grew by 570.22%

81%

A 2021 study of insurance company cyber threat

by Munich Re found that 81% of C-level respondents didn’t think their company was adequately protected.

€9,040bn According to the European Central Bank, the total assets of euro area insurance corporations amounted to €9,040 in the first quarter of 2021.

 EDITORS CHOICE

Following its recent $650m investment fund round – the largest of any insurtech globally, wefox promptly made every member of its workforce a shareholder in the company.

 SHIFT TECHNOLOGY

DID YOU KNOW...

Death by laughing An insurance policy was drafted – and still exists – for ‘death by excessive laughter while visiting the cinema’.

In the days of early cinema in the early 19th century, audience members were so scared of dying due to excessive laughter that they purchased the insurance cover through Lloyd’s of London. The cover in its modern form is liability insurance designed to protect film production companies, comedians, stand-up comics, or anyone else who runs the risk of killing someone through their sheer wit alone.

Alien abduction People in some US states who are fearful of experiencing an alien abduction can insure themselves against it via the Alien Abduction Insurance Cover Company. Their tagline is (and could only ever be) ‘Don’t leave Earth without it’. Though it’s clearly more of a gimmick than a genuine offering, the Florida-based company has reportedly paid out on some claims, and has issued over 100,000 policies.

The AI platform for auto insurance claims, had a $220m funding round in Q2 2021 led by Avenir, Accel, Bessemer Venture Partners, General Catalyst and Iris Capital.

JUL21

 CNA HARDY The commercial insurance provider allegedly caved to a ransomware attack in Q1 2021 and paid $40mn to attackers as a result. An investigation into the matter has been opened.

 ALLSTATE CORPORATION The US primary insurer has announced catastrophe losses for Q2 2021, of $544m, or $430 million after-tax.

GOOD TIMES BAD TIMES

W EFOX

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GLOBAL NEWS

1

USA

Bloomberg Intelligence (BI) A new report from Bloomberg Intelligence has calculated that large life reinsurers have been hit

by US$4.4bn worth of claims in 2021. A spike in mortality rates in Q1 is the root cause of loss, with the US hit hardest and the UK and Canada trailing behind.

2

BERLIN

wefox makes every employee a shareholder Europe’s biggest and fastest growing insurtech, wefox made every employee a shareholder to thank them for their hard work in the expansion of the company.

The move followed a record $650m funding round.

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July 2021

3

4

UK

LITHUANIA

No more price walking

AI RegTech introduced

The UK’s Financial Conduct Authority has banned the practice of price walking for policies up for renewal from January 2022 in a landmark move.

The Bank of Lithuania has introduced a regtech solution to boost AML (anti money laundering) practices by providing new monitoring and analysis services.

5

CHINA

Accenture study reveals customer impact on sector An Accenture insurance consumer study found that 20% of consumers in mainland China intend to switch insurers in the next 12 months, a statistic that, if true, would significantly impact the region’s CAGR.

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PEOPLE MOVES ANDREW DIESEL FROM: AVIVA TO: ABACAI WAS: CHIEF EXECUTIVE NOW: DIRECTOR & FOUNDER

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July 2021

With nearly 10 years’ experience in fleet management from his time spent with Gallagher and Marsh & McLennan, Andrew Diesel will be providing technical support to AXA XL’s underwriters and clients primarily in the US and Canada. Diesel’s new role will also include taking responsibility for executing engagements with clients, in partnership with a growing ecosystem of tech partners. Diesel previously served as a Senior Risk Control Consultant at Gallagher, where he had responsibility for implementing the National Risk Control Strategy and led the National Fleet and Transportation working group.

KAREN GREEN FROM: ASPEN UK TO: CYTORA WAS: CEO NOW: MEMBER OF THE BOARD

ROBERT COTTRELL

After a 12-year stint as CEO of Aspen UK and serving on the Aspen Group Executive Committee, Karen Green is joining the UK insurtech Cytora’s advisory board in a move that will see her drive growth across the company. She is a Non-Executive Director at Phoenix Group Holdings Plc, Admiral Insurance Group Plc, and Asta Managing Agency Ltd. She is also a council member of Lloyd’s of London and is Vice President of the Insurance Institute of London.

FROM: HEADLAND ASSOCIATES TO: WRISK SOLUTIONS WAS: PARTNER NOW: H EAD OF COMMERCIAL DEVELOPMENT Robert Cottrell joins Wrisk Insurance as the new Head of Commercial Development.

With more than 25 years’ experience in the insurance and automotive sectors, including seven as Director of Insurance at Volkswagen Financial Services where he led the delivery of all insurance-related activity, Cottrell will bring a wealth of skills to the new role. He is also an Associate of the Chartered Insurance Institute – and a Chartered Insurance Practitioner.

insurtechdigital.com

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TIMELINE THE STORY OF wefox is a force to be reckoned with. As Europe’s leading insurtech company it has also just secured the largest ever investment round fund of any insurtech globally. We track the highs – and more highs of this dynamic and disruptive insurtech.

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2014

2015

2016

The meeting

In the money

Funding spree

FinanceFox is launched Fresh from his victories with Groupon, Julian Teicke creates FinanceFox, an app that enables users to manage their existing insurance policies from one mobile platform.

FinanceFox completes an angel funding round with an undisclosed amount of funding from EMPAUA GmbH, Dario Fazlic, Julian Teicke, and Amir Suissa.

In just eight months, FinanceFox raises $28mn from its investors in two rounds led by Salesforce Ventures, Anglelist, IDinvest Seedcamp and Speedinvest. The boost enables FinanceFox to expand its offerings and the company goes on a massive hiring drive.

July 2021

2017

2021

Rebrand

The big time

With its own insurance offering now available, FinanceFox is sent out to pasture and the insurtech rebrands as wefox following the acquisition of ONE Insurance for an undisclosed amount of money.

Now the largest insurtech in Europe, wefox recently raised $650mn in the biggest investment drive for an insurtech globally.

Following this, CEO Julian Teicke also announced that every employee was to become a shareholder in the company.

insurtechdigital.com

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LEGEND

Michael Neidorff JOB TITLE: CEO COMPANY: CENTENE CORPORATION NET WORTH: US$574M

O

ne of the most influential figures in US healthcare insurance, Michael Neidorff, 77, is the CEO of Centene Corporation, the biggest provider of Medicaid in North America.

The Pennsylvania native grew up in the historic city of Altoona and from the get-go, showed great academic promise and drive.

In 1965, Neidorff earned his bachelor’s degree in political science at Trinity University. He went on to study a masters degree in industrial relations at St Francis College the following year.

By the 1980s, Neidorff was fully immersed in the corporate world and healthcare having become a human resource executive and the director of international consumer products at Miles Laboratories, one of the best established treatment research centres of eye and nervous system conditions in the US. Neidorff met his wife, Noemi, Donated over also an east coast native. The US$30mn+ couple married and then moved to to charity St Louis, where Neidorf started his first position in health insurance as president and chief executive

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July 2021

officer of Physicians Health Plan of Greater St. Louis.

But it wasn’t until 1995 that he entered the upper echelons of health insurance as a business, becoming the Chief Executive of Group Health Plan and Vice President of its parent company, Coventry Corp.

By 1996 Neidorff had moved again and joined Centene, then called Coordinated Care Corp., as its CEO. His business acumen and market foresight led him to put Centene through its IPO in 2001.

Since then, the company has expanded with incredible speed and success. In 1996, Centene had just 40,000 covered members.

Neidorff has led a huge expansion in the company and it now has over 12 million members across 28 states in the United States.

While he and his wife Noemi are ambassadors of St Louis and recently donated US$5mn to local health initiatives, Neidorff is not a controversy-free figure. In 2020, Neidorff was criticised for earning US$4.7mn in bonuses in addition to his total yearly earnings of US$24.96mn, while simultaneously laying off 3000 workers.

A fan of the coast and the good life, Neidorff also has an impressive portfolio of Palm Beach properties to his name.

Neidorff and his wife had two children, a son and a daughter.

Tragically, his daughter, Monica Lynne Neidorff, died in March this year aged 46.

“If it's in a new market, it has to have significant size and scale to make it worthwhile”

insurtechdigital.com

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FIVE MINUTES WITH...

SETH

Q. WHAT'S THE BEST PIECE OF ADVICE YOU EVER RECEIVED?

» “I was very lucky to have a great

RACHLIN

mentor to guide me through the ins and outs of the industry during the early days of my career as a consultant. One standout piece of advice given to me by this mentor is that I should always regard clients as “clients for life.”

AS THE EXECUTIVE VP OF THE GLOBAL INSURANCE INDUSTRY LEADER, CAPGEMINI, DIE-HARD NEW YORKER SETH RACHLIN IS A BUSY MAN. BUT TAKING TIME OUT TO ENJOY THE ARTS IS HIGH ON HIS POST-PANDEMIC BUCKET LIST, ALONG WITH A GAME OF BASKETBALL

Q. WHICH ACTIVITY ARE YOU MOST LOOKING FORWARD TO DOING WHEN THE PANDEMIC IS OVER?

Q. WHO WAS YOUR CHILDHOOD HERO AND WHY?

Q. IS THERE A PERSONAL ACHIEVEMENT FROM THE PAST 12 MONTHS OF WHICH YOU ARE PARTICULARLY PROUD?

» “Having grown up in New York, my

» “I am a huge classical music fan. Being a

consultant with clients dotted across the globe has meant that in the past I’ve been able to extend my trips to get tickets for a local opera, concert or performance that’s going on wherever I might be.

“I have very fond memories seeing some fantastic artists perform live before the onset of the pandemic. I am very much looking forward to the re-opening of concert halls and experiencing the atmosphere it provides.

childhood hero was a basketball player for the New York Knicks, Bill Bradley. Although “Early on, before becoming a arguably not necessarily the team’s best consultant, I’d always wanted to become athlete, I always felt that he worked the a college professor. This led me down hardest and was the smartest basketball the academic path to undertake a PhD player on the court. in Sociology at Columbia University.

“It was inspiring to see how his dedicated practice and intellect “ I AM VERY MUCH LOOKING helped him achieve success. Bill FORWARD TO THE RE-OPENING OF went to Princeton University and CONCERT HALLS AND EXPERIENCING led the school to its first NCAA finals THE ATMOSPHERE IT PROVIDES” in its history. For those who are not from the US, this was a big deal!

»

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July 2021

“ I’D ALWAYS WANTED TO BECOME A COLLEGE PROFESSOR. THIS LED ME DOWN THE ACADEMIC PATH TO UNDERTAKE A PHD IN SOCIOLOGY AT COLUMBIA UNIVERSITY”

“After I dove headfirst into a career in consulting, I put my dream to teach on the backbench until this past Spring where I began teaching a graduate course at the University of Chicago’s Public Policy programme. This has always been on my bucket list. Being able to speak to students on technology and risk, my two passions, is something I am particularly proud of.

Q. WHAT INSPIRES YOU IN INSURANCE TODAY?

» “A personal interest of mine is what

insurers call the ‘protection gap’, which is,

put simply, all those risks and bad things that can happen to people or companies that insurance currently doesn’t fully or partially protect against. This includes the likes of climate and cyber risk, both of which are growing inextricably.

What inspires me is the power of technology to solve some of these problems. This includes the likes of datapowered systems to better predict the nature and timing of storms and even sensors that can alert customers to take preventative action to reduce any likelihood of damage. insurtechdigital.com

21

Bringing the Community to LIVE Broadcast from London to the World

October

12th - 14th 2021 A BizClik Media Group Brand

Featuring:

Keynote Speakers LIVE Roundtable Q&As Networking Lunch Inspirational Presentations

Over 5 Stages:

FinTech Stage Banking Stage Digital Payments Stage InsurTech Stage Tech Expo Stage

EARLY BIRD TICKETS

Creating Digital Communities

Example of an image caption

24

July 2021

ALLIANZ MALAYSIA BERHAD

CLOSER TO CUSTOMERS THROUGH DIGITAL WRITTEN BY: WILL GIRLING

PRODUCED BY: JAKE MEGEARY

insurtechdigital.com

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ALLIANZ MALAYSIA BERHAD

Yorck Reuber, Chief IT Officer

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July 2021

ALLIANZ MALAYSIA BERHAD

Yorck Reuber, Chief IT Officer, helps us examine how digital is making insurance faster, better, and closer to customers than ever before

T

here has been much discussion about the insurance industry’s need to embrace digital transformation if it is to survive oncoming challenges from Big Tech competitors. Following the disruptive influence of the COVID-19 pandemic, most would agree that technology is an important part of insurance’s future. However, genuine leaders like Allianz know that it’s only half the story; more than anything, digital is an opportunity for foundational culture changes that can ultimately enrich the insurercustomer relationship like never before.

Yorck Reuber joined Allianz Malaysia as Chief Information Technology Officer in June 2020, during the pandemic’s first major global lockdown. Having built a career by working at some of the most prestigious technology, finance, and insurance-based companies in the world, always in international setups, he moved to Malaysian in 2018. What drew him to change jobs during such uncertain times? The answer is simple: the opportunity to make a difference. “I strongly felt that I wanted to work closer with customers and make a positive impact. Allianz Malaysia provided me with the perfect chance to do just that.”

Holding a degree in Ships Engineering, it's safe to say that Reuber has an expert grasp on the technical aspect of his work. However, when asked what transferable skills he has brought to Allianz, he chooses to emphasise the importance of his approach to leadership and the dedication to “cultural change” that

he has cultivated. “As a company, we may buy technology but the real impact is making a genuine change in the way people think and work,” Reuber explains. “My day-to-day role consists of working with the business on product development - determining which insurance offerings we want to bring to the market.” His perspective complements what is now a generally accepted truth regarding digital transformation, namely that it is as much about people as it is about systems or technology.

2020 brought about operational circumstances for insurance that made digital adoption practically essential. In this regard, Reuber states that Allianz Malaysia was generally well-prepared already, although there were still challenges to overcome. “Luckily, there was no paper being carried around the offices by that point, but people were still very ‘paper minded’. The big target was (and continues

“ [DIGITAL IS] ENABLING ALLIANZ TO DO THINGS FASTER AND TO BE MUCH CLOSER TO OUR CUSTOMERS” YORCK REUBER

CHIEF INFORMATION TECHNOLOGY OFFICER, ALLIANZ MALAYSIA insurtechdigital.com

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ALLIANZ MALAYSIA BERHAD

Title of the video

“ I STRONGLY FELT THAT I WANTED TO WORK CLOSER WITH CUSTOMERS AND MAKE A POSITIVE IMPACT. ALLIANZ PROVIDED ME WITH THE PERFECT CHANCE TO DO JUST THAT” YORCK REUBER

CHIEF INFORMATION TECHNOLOGY OFFICER, ALLIANZ MALAYSIA

to be) to use the benefits of digitalisation to speed up processes and to make things simpler.” As such, he and his team oversaw the distribution of laptops to all staff members to ensure business continuity and make working from home fully effective.

Some other challenges are more enduring in Malaysia, not least of which is the country’s 28

July 2021

highly regulated market. Already long familiar with EU regulatory standards and now immersed in Malaysia’s for over two years, Reuber states that the environment is difficult but not without signs of encouraging development, “To be very clear, regulation has changed a lot since the pandemic, but it serves to protect the business and should ultimately support Allianz Malaysia’s journey.” Another issue is resourcing the IT talent necessary to implement Allianz Malaysia’s broader vision, a gap that the domestic labour market has yet to adequately fill. “You can find all the classic IT skill sets here, but skills like computing on the edge, stuff that really brings digitalisation forward, are lacking.”

Reuber’s description of Allianz Malaysia’s digital roadmap makes it clear why working to resolve the skill issue will be crucial: “The group has been implementing a complex suite of digital tools over the last few years,

ALLIANZ MALAYSIA BERHAD

YORCK REUBER TITLE: CHIEF INFORMATION TECHNOLOGY OFFICER INDUSTRY: INSURANCE

the IT Master Platform (ITMP). Our priority is to change how we interact with customers by sharing data and scaling within the group, determining what’s working well in other countries and innovating locally to speed things up.” Based on cloud technology, the ITMP is the result of dedicated research on how to streamline operations, increase cost optimisation, and future-proof Allianz Malaysia’s business.

However, cloud isn’t the only technology that is proving particularly important both to the company and insurance generally.

“Although there are lots of really smart technologies in the market, I believe what's most relevant for insurance at this moment is RPA (robotic process automation),” says Reuber. Considering the full utilisation of RPA to still be far off, he enthuses the potential for automation tech to transform Allianz Malaysia’s internal processes by eliminating repetitive manual tasks.

“Whereas customers would previously have to make a phone call and potentially wait a long time for resolution, simple enquiries could be dealt with using tools like RPA. This is an area in which we have to invest more. Also, using artificial intelligence (AI) to analyse data, we will be able to shape our products in a better way: more personalised value for customers and simplified policy contracts molded to fit a particular purpose.”

EXECUTIVE BIO

LOCATION: KUALA LUMPUR Yorck Reuber joined Allianz Malaysia as Chief InformationTechnology Officer in June 2020. Previously he served as Head of Operations ASIA as well as Chief Technology Officer North Europe with AXA. He also held positions as Vice President Service Delivery Management EMEA (T-Systems), Global Service Director (Verizon) and various Senior Management positions at IBM as well as being Chief Engineering Officer and Diving Officer in the German NAVY. All these roles incl. his personal entrepreneural activities ensured he could gain wide experience in positions from Sales via General Management to Technical. He has always been focussing on turning profitability and customer satisfaction from negative to positive as well as implementing cultural change in organisations, transforming to agile and digital mindset while strengthening cyber defense and enabling multicloud scenarios and global servicing.

Reach exponential value with technology.

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Organizations across all industries and verticals are challenged by creating a long-term satisfying relationship with their customer. Meeting customers’ digital needs has only come into sharper focus as a competitive differentiator.

Insurance providers have been historically slow to adapt to the digital revolution.

However they can no longer afford to continue to rely on legacy systems: digital is the future of insurance.

“When faced with a digital transformation, businesses often struggle to maintain excellence in customer experience.

With more digital customer interactions comes the growing expectation of digital self-service,” says Rafael Sweary, President & Co-Founder of WalkMe. “When consumers don’t easily find the help they need, their loyalty is compromised and their risk of churn increases” notes Sweary. This is where digital adoption comes in.

Digital adoption means achieving a state in which users gain the ability to use digital tools as they are intended and to the fullest extent. When users achieve digital adoption they not only learn basic functions on a given software they also maximize advanced features to unlock innovative new ideas and processes.

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ALLIANZ MALAYSIA BERHAD

2001

Year founded

2,000

Number of employees globally as of April 2021

RM 5.31bn

Revenue Allianz Malaysia Berhad earned in Gross Written Premiums (GWP) in 2020

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July 2021

ALLIANZ MALAYSIA BERHAD

“ AS A COMPANY, WE MAY BUY TECHNOLOGY BUT THE REAL IMPACT IS MAKING A GENUINE CHANGE IN THE WAY PEOPLE THINK AND WORK” YORCK REUBER

CHIEF INFORMATION TECHNOLOGY OFFICER, ALLIANZ MALAYSIA

Cybersecurity is an aspect of Allianz’s operations which has always been given high priority. “The only thing we sell is trust. So, if we can't secure the data of our customers, why should they buy from us?” With incidences of cyber criminal activity tangibly on the rise, Allianz continues to place paramount importance on security while also exploring methods for accelerating speed-to-market.

“Again, automation technologies are very important with regards to security. Before, we tended to just lock things down and subsequently make things even more complicated. Now, things have to be easy yet secure to access, and it’s only by using new technologies that both those aims are achievable.”

For Reuber, the decision to embrace digital adoption goes beyond mere operational optimisation and actually represents an existential requirement for Allianz’s continuity. “The companies that don't adopt digital will soon not be in the market anymore,” he cautions. “Startups competent in data analytics are already starting to sell insurance.” The move, then, demonstrates that Allianz is preparing to become more like a tech company that primarily operates within insurance (as insurtechdigital.com

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ALLIANZ MALAYSIA BERHAD

THE IMPORTANCE OF INNOVATION PARTNERS Allianz Malaysia is teaming with various innovative partners to drive its digital adoption.

Using a Digital Adoption Platform (DAP), the company supports users to effortlessly navigate complex software, websites, and apps. By supplementing proactive and comprehensive guidance for customers, these tools can ensure that any problems can be resolved easily in-situ.

DID YOU KNOW...

“Having a partner that is able to help bridge the knowledge gap when using digital tools in areas that you haven't previously been exploring is really key,” states Reuber. He notes that innovation partners have been particularly helpful during the roll out of automation tech like activitybots at Allianz.

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“As an insurance business, our target is not to use technology to keep people away from interacting with us. We simply want to take care of any issues they have in the fastest and easiest way possible.

“Digital adoption is difficult and complex, but it doesn’t need to be anymore when there are tools in the market that can do that work in the background. That's the magic of these partnerships,” he said.

July 2021

opposed to the opposite). In addition to enhanced relevancy to its customers’ lives, Reuber adds that Allianz will always retain the quality that has ensured its success since 1890, “Our slogan remains, ‘We secure your future.’” This message is being adapted to meet the requirements of the digital era, he reasons, and that is why the company continually reexamines its priorities.

Therefore, as Allianz continues on its transformation journey, Reuber is determined to instill the digital mentality

ALLIANZ MALAYSIA BERHAD

“ OUR PRIORITY IS TO CHANGE HOW WE INTERACT WITH CUSTOMERS

BY SHARING DATA AND SCALING WITHIN THE GROUP, DETERMINING WHAT’S WORKING WELL IN OTHER COUNTRIES AND INNOVATING LOCALLY TO SPEED THINGS UP”

in its employees as the company pushes for further growth and superior market performance. “Digital is the future,” he poignantly concludes. “It's more than just buying hardware or software; it's changing the way people think and the way we cooperate with each other. At the end of the day, it's enabling Allianz to do things faster and to be much closer to our customers.”

YORCK REUBER

CHIEF INFORMATION TECHNOLOGY OFFICER, ALLIANZ MALAYSIA

insurtechdigital.com

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Insurance’s digital transformation starts with the customer WRITTEN BY: WILL GIRLING

Speaking with IBM, LV=, and EPAM Systems, we determine the optimal strategy for insurance’s ongoing digital transformation

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July 2021

DIGITAL STRATEGY

T

he historically conservative insurance industry met one of its biggest existential challenges in 2020. Ever since the COVID-19 pandemic forced a reappraisal of modern operational and service standards, digital transformation has gone from an option to an absolute necessity.

But which unaddressed pain points made the shift necessary? What are the key trends that insurers should consider exploring?

How can a digital roadmap be configured to meet the needs of both the business and the customer?

In a thorough examination of one of the most all-encompassing topics in today’s market, a selection of highprofile insurance/tech experts helped us answer these questions and more.

Digital transformation trends The ‘acceleration’ of digital transformation since the pandemic is an oft-reported phenomenon, but it is rarely contextualised purely in relation to insurance. However, Tarek Nseir, VP and Head of Digital insurtechmagazine.com

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DIGITAL STRATEGY

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Tarek Nseir TITLE: VP OF HEAD OF DIGITAL ENGAGEMENT PRACTICE COMPANY: EPAM

“THIS IS AN EXCITING TIME FOR DIGITAL TRANSFORMATION IN THE INSURANCE INDUSTRY DUE TO THE OPPORTUNITIES PRESENTED IN PART

BY COVID-19”

INDUSTRY: INFORMATION TECHNOLOGY & SERVICES LOCATION: UNITED KINGDOM Nseir’s role includes everything from innovation design, consulting and physical product development to the execution of core technologies that reach the consumer.

TAREK NSEIR

VP OF HEAD OF DIGITAL ENGAGEMENT PRACTICE, EPAM

Engagement Practice at EPAM Systems, claims that five years’ worth of transformation has been accomplished in just 12 months. “This is an exciting time for digital transformation in the insurance industry due to the opportunities presented in part by COVID-19, regulatory change, and the investment appetite of insurers to differentiate from the competition.” What has resulted is an overall drive towards selfservice channels, digital channels, data analytics and more.

Whereas previously insurers were primarily interested in digital tech’s ability to reduce back-end costs through automation and self-service, Nseir believes the push to secure a competitive advantage by investing heavily in the customer experience (CX) has taken priority. The goal is to create “predictive, always-on, sticky relationships with customers in all areas - from loss prevention to claims resolution and renewals.” insurtechmagazine.com

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DIGITAL STRATEGY

Michael Fino TITLE: VP OF ECOSYSTEM TRANSFORMATION AND CHANNEL MANAGEMENT COMPANY: IBM INDUSTRY: INFORMATION TECHNOLOGY & SERVICES LOCATION: UNITED STATES Now part of IBM for over 25 years, Fino prides himself on a mindset that emphasises growth, empathic leadership, and an approach that breaks down silos. He is an expert at motivating business partners to deliver desired outcomes.

CX itself has been greatly affected by the conditions of the pandemic. Heather Smith, Managing Director of LV=General Insurance, suggests that a ‘levelling’ of digital experience across every industry is taking place: “Customer expectations are driven by their experiences with other companies in different industries, and that inevitably has a direct impact on the experience they expect to receive from insurers. Being aware of conversations that have occurred across different channels is therefore important, and there’s a need to use data intelligently to enhance those conversations.”

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Shifting away from legacy technology Following on from Smith’s appraisal of CX’s evolution, it appears that consumer preference for digital (or at least omnichannel) connection with their insurance providers has taken precedence over ‘legacy’ methods.

Michael Fino, VP of Ecosystem Transformation and Channel Management at IBM, highlights that this shift has gone hand-in-hand with widespread updates to enterprise IT infrastructure. “What we’re seeing is clients wanting to migrate to the cloud and balancing how much infrastructure they’re willing to put there.”

IBM’s position has been to champion hybrid multi-cloud as the best platform for driving innovation and scalability. “Clients don’t want to put their primary and businesscritical applications in a public cloud,” he adds. “To get the right balance, they need to utilise hybrid cloud models.”

DIGITAL STRATEGY

“ALL BUSINESSES HAVE TO ADDRESS THAT THE ONLY WAY THEY CAN CONTINUE TO DO BUSINESS IS TO KEEP PACE WITH TECHNOLOGY” MICHAEL FINO

VP OF ECOSYSTEM TRANSFORMATION AND CHANNEL MANAGEMENT, IBM

Analysing existing capabilities and to ensure a more culturally agile mindset.” developing a digital roadmap that meets This gives an indication of what the overall core business goals will be essential, strategic framework for transformation particularly in should be: customers areas where legacy must be able to systems are actually engage with insurers What is hybrid cloud? impeding optimum in a way that’s most service. “Legacy convenient for them. systems were never As defined by Hurwitz & Associates’ white designed in a way paper ‘Understanding IBM’s hybrid and Creating a that would support multi-cloud strategy’: digital roadmap API integration, and When considering customer outcomes “A hybrid cloud is an environment that what the core were designed purely integrates traditional IT with a combination objectives of digital for call centre-based of public, private, or managed cloud services. transformation journeys,” states In essence, a hybrid cloud becomes a virtual should be - whether Smith. “Being able computing environment that matches related to corporate to make changes in workloads to the most appropriate computing agility, augmenting a multi-technology model. All these services need to be managed tech capabilities, environment has its as though they were designed to behave as cost reduction, etc. challenges, but LV= a single unified environment.”

- the answer Fino has endeavoured gives is a nuanced insurtechmagazine.com

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DIGITAL STRATEGY

“all of the above.” Indeed, the priority of these goals is apt to be whatever an individual insurer considers most important. However, in a purely technological sense, the solution is likely to reside in better data management.

Fino suggests that “being able to access all the information that exists in an insurance environment and then leveraging it with the use of automation and artificial intelligence (AI)” will be particularly important in terms of scale and growth. Partners also play a key role in helping enterprises determine the right solution and integration roll-out aligned to their unique digital transformation strategy.

Nseir agrees that digital transformation will likely yield lower front-line costs and better service but adds that creating added value for customers should be the primary concern. “It’s important to clarify which customers will be targeted, what their specific needs are, what will be the service delivered, and at which price point. The focus should be broad because digital transformation comprehensively impacts an organisation both internally and externally.”

“ BEING ABLE TO MAKE CHANGES IN A MULTI-TECHNOLOGY ENVIRONMENT HAS ITS CHALLENGES, BUT LV= HAS ENDEAVOURED TO ENSURE A MORE CULTURALLY AGILE MINDSET” HEATHER SMITH

MANAGING DIRECTOR, LV=GENERAL INSURANCE

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DIGITAL STRATEGY

Heather Smith TITLE: MANAGING DIRECTOR COMPANY: LV=GENERAL INSURANCE INDUSTRY: FINANCIAL SERVICES LOCATION: UNITED KINGDOM Smith is responsible for ensuring quality offerings for the company’s retail, home, car, pet, travel, breakdown and landlord customers. She has over 25 years of financial services across a range of leadership roles.

Bearing Nseir’s comments in mind, it becomes clear that an internal culture shift is also fundamental; he contends that every conversation should begin and end with digital transformation in order to properly layer its relevance throughout an organisation. When EPAM partnered with LV= to make the latter a truly digital-first company, the cultural qualities of empowerment and agility were emphasised in addition to technological considerations. “To help leadership better understand customers and how corporate culture should adapt, we brought customers in and walked through their user journey to identify specific needs. It took time to co-create a view of how to best serve customers and what it means to be customercentric,” he explains. insurtechmagazine.com

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DIGITAL STRATEGY

How LV= attracts top-tier talent When enacting a digital transformation strategy, having the right talent in your team can make a substantial difference. Smith explains how LV= gets the right people to implement its vision: “Most importantly, recruitment should focus on attitude, culture and values, and then focus on skills.

LV= is a people-first business, and I want my team to care about our customers and each other and also to want to do the right thing. I can build skills, but I can’t build personality.

“Then, it’s a case of ensuring they have the right skills and experience. We recognise that customers compare us to all their experiences with other companies and not just other insurers. Therefore, we’re also always on the lookout for people who have worked in other industries and can bring new ideas.”

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DIGITAL STRATEGY

The customer is key Ultimately, it seems apparent that digital transformation should be an action plan by which insurers create a better, more modern, and more accessible journey for customers.

Although the reason for insurance’s digital adoption following COVID-19 was arguably one of expediency, both Smith and Fino agree that continuing to do so is important from the perspective of an ongoing demographic shift. “New generations of customers do things differently than previous generations,” states Fino. “All businesses have to address that the only way they can continue to do business is to keep pace with technology.” Smith adds: “Like all other sectors, we are seeing a shift in consumer behaviour towards choosing digital.

In terms of outcomes for customers, where companies are able to offer desired digital services in a way that matches the company brand and experience, I think we’ll see the same customer satisfaction and ease of doing business that matches any human contact.”

This isn’t to say that there aren’t instances where an empathetic human response isn’t preferable, but the operative word is ‘choice’.

It is important that customers feel they are being listened to and that their preferences are being taken into account. “One of the things that we now get faster and easier than ever before is feedback,” says Fino. “We’re able to get it quickly and then feed it into our transformational priorities so that we can change the experience quickly. How an insurer transforms, services, and supports is now just an ongoing loop.” The answer, then, to what constitutes a good digital transformation can have many facets, but it must always start from one perspective: the customers.

As insurance companies continue to explore their new identities in the digital era, it will be those who best observe this rule that reap the largest rewards. insurtechmagazine.com

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CNA INSURANCE

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LEVERAGING DIGITAL TECHNOLOGY IN THE INSURANCE INDUSTRY WRITTEN BY: MELISSA KHAN PRODUCED BY: JAKE MEGEARY

insurtechdigital.com

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CNA INSURANCE

CNA’s VP of Transformation Carol Castelloni shares her insights on an approach that optimises workflow processes for the more than 120 year old organisation

C

Carol Castelloni VP Transformation, CNA Insurance

NA is one of the largest U.S. commercial property and casualty insurance companies. Founded in 1897, it is backed by more than 120 years of experience. Carol Castelloni, who leads the Transformation Office for CNA, talks about her role at the organization where she first started her career before rejoining them in 2019. “My career started with CNA, so it has been exciting to come back to where my insurance journey began.” In this role, Carol is responsible for driving enterprise-wide strategic initiatives. Her team delivers value through collaborative execution with crossfunctional stakeholders to optimize business performance, enhance operating models and lead CNA through modernization.

Carol has served the P&C insurance industry in a variety of leadership and advisory roles for more than 20 years. At CNA, she is tasked with overseeing a wide range of initiatives, and no two days are alike, much to her preference. With driving the continuous evolution of CNA as her top objective, Carol operates as a multidimensional thought partner for senior insurtechdigital.com

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CNA INSURANCE

CNA Overview

“My career started with CNA, so it has been exciting to come back to where my insurance journey began” CAROL CASTELLONI

VP OF TRANSFORMATION, CNA INSURANCE

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CNA INSURANCE

business leaders across core functions like underwriting, operations and distribution.

Describing herself as a collaborative, accountable and empowering leader, she says “My team and I function as a nucleus for shaping and driving large-scale programs that are focused on maximizing efficiency, modernization, and growth.” In collaboration with CNA’s business stakeholders, Carol and her team analyze opportunities for improvement to design solutions and shape future roadmaps that deliver measurable value.

CNA’s strategic priorities influence transformations taking place across the organization. These include their commitment to deliver top quartile underwriting performance through industry specialization, technical excellence, optimized distribution, operational efficiency, and talent development. Carol and her team are constantly challenging the status quo by re-examining current ways of doing work across the spectrum of process, people, and technology to drive valuable impacts. Interestingly, transformation at CNA is not always a technology-first approach.

Instead, it starts by looking through the lens of the customers and distributors to assess opportunities for optimizing efficiency and effectiveness. Since joining CNA, Carol and her team introduced a new ‘learn-bydoing’ approach to quickly pilot ideas and opportunities, referred to as the Model Office. When asked about this method of innovating and executing, she says “We start small and adjust based on insights from people, and supporting metrics, doing the work in a new way. Then, we scale fast to achieve a broad impact.”

The Model Office framework applies business resources to new workflows while gathering qualitative and quantitative insurtechdigital.com

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impacts, such as service, time and quality.

Subsequently, Carol works with CNA’s Technology team to identify ways that digital enablers can expand and/or accelerate the desired outcomes. This has led CNA to embark on a digital transformation using artificial intelligence and machine learning to collect, organize, and analyze inbound documentations, such as submissions, loss runs, and supplemental forms, from agents and brokers. This significantly reduces timeconsuming manual workflows and improves the speed and accuracy of CNA’s processes.

Looking downstream, the digitized data can be leveraged for analytics and modeling 54

July 2021

purposes. The Model Office has been successfully embraced at CNA as an accelerator to process design and execution for Underwriting, Operations, and Analytics.

CNA is also employing a number of digital solutions to transform their processes and workflow. To respond to common challenges with information veracity (trusting the data) and velocity (speed of data), CNA deployed ThoughtSpot. This tool provides socially-enabled search capabilities and recognizes patterns that can also plug into AI/ML models. CNA’s business leaders and underwriters leverage this tool so they can quickly ask and answer questions pertaining

CNA INSURANCE

“ At CNA, we are not afraid to take transformation to the heart of our business processes. We do not believe in innovation on the fringes, but the best way to achieve our outcomes is to go right to the core and make a difference”

CAROL CASTELLONI TITLE: VP TRANSFORMATION COMPANY: CNA INSURANCE LOCATION: CHICAGO Carol Castelloni leads the Transformation Office for CNA. In this role, she is responsible for driving enterprise-wide, strategic initiatives and change programs. Carol and her team deliver value through collaborative execution with crossfunctional stakeholders to optimize business performance, enhance operating models, and lead CNA into a modernized organization. She holds a Bachelor’s degree in Business Administration from the University of Illinois at Urbana-Champaign and a Master’s degree in Applied Technology from DePaul University. Carol is an active mentor in the Women Impacting Leadership (WIL) group at CNA and volunteers with the College & Career Center for Illinois School District 203.

MICHAEL COSTONIS

to revenue, profits, and quality of business.

Harnessing the power of the Cloud in realtime is a big advantage to support digital transformation at CNA, so they’ve selected Google Cloud as its primary platform.

When it comes to fostering the culture at CNA, Carol believes that people are CNA’s greatest asset and they should be empowered to think creatively and problem-solve. “I actively seek out perspectives from my team and our business stakeholders because I believe their holistic input drives better outcomes, performance, and energy.” Carol is a naturally charismatic and motivational leader, with a keen focus on collaborative accountability. To this point, she goes above and beyond to articulate shared goals, support action-oriented progress, and recognize accomplishments.

Given her industry and leadership acumen, Carol also invests time to coach her team and mentor other resources as a way to

EXECUTIVE BIO

CHIEF OPERATIONS OFFICER, CNA INSURANCE

CNA INSURANCE

continually cultivate talent at CNA. “For me, mentorship is a two-way learning opportunity because I gain so much from the wide range of lively conversations,” she says.

One of her biggest mantras for a positive culture within her team is to keep it fun, as Carol believes that it is important to laugh and learn through shared experiences.

CNA is actively involved in the industry, serving on the Board of The Institutes and as an active member of RiskStream Collaborative, which is an industry-led consortium collaborating to unlock the 56

July 2021

potential of blockchain across the insurance industry. The company also supports IICF, APCIA, ACORD, Big I and PLUS, to name a few. It is important for CNA to be involved in these associations, as they bring together leaders to discuss and help solve some of the challenges facing the insurance industry today as well as plan for the future.

CNA relies on a combination of its own thought leadership as well as the latest technology from industry experts to help solve its clients’ challenges. CNA values companies with a strong understanding

“My team and I function as a nucleus for shaping and driving large-scale programs that are focused on maximising efficiency, modernisation, and growth” MICHAEL COSTONIS

CHIEF OPERATIONS OFFICER, CNA INSURANCE

of the P&C insurance industry as it relates to the company’s overall strategic objectives and functional capabilities. This synergy is important because it provides an ‘outside-in’ perspective on how CNA thinks about leveraging innovation. These experts also need to pivot quickly based on evolving business priorities, which enables CNA to accelerate momentum, increase capacity, and deliver value faster. Lastly, joint accountability towards outcomes as well as working with a company to define what success looks like up front and track

progress over time are equally important.

CNA has a very successful connection with SLK to provide high-quality automation solutions that support technology and business objectives. Carol adds, “SLK’s Avo Discover tool accelerates how we can document workflow processes, measure impacts on enhancements, and identifies future automation opportunities.” This allows CNA resources more time to focus on creative problem-solving for future designs.

Accenture is a long-standing relationship with a multi-functional, deep understanding insurtechdigital.com

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CNA INSURANCE

“ We start small and adjust based on insights from people, and supporting metrics, doing work in a new way. Then, we scale fast to achieve a broad impact” MICHAEL COSTONIS

CHIEF OPERATIONS OFFICER, CNA INSURANCE

CNA INSURANCE

of CNA’s business and technology environment. They provide thought leadership to support the company’s strategic needs and drive execution for specific priorities. Accenture has a proven track record for helping CNA address complex problems with innovative solutions that drive change across the organization.

Carol keeps a close pulse on market news and trends as a seasoned leader and shares her thoughts on the insurance industry’s approach to transformation, saying “The insurance industry is undergoing remarkable demands to enhance digital capabilities required to support the changing nature of risk, new product lines, and different distribution channels. It’s a critical time for insurers to focus on foundational priorities and build a dynamic path that can flex to address emerging needs.” When asked if she has any words of advice for her peers, she said “Transformation does not need to be over-engineered and feel overwhelming.

It can start with rapid experimentation and scale over time with incremental learning.

When you run into challenges, embrace them as learning moments and continually get better over time. Harness the power of change management and communication strategies to navigate organizational impacts along the way.”

As a closing note, CNA's Chief Operations Officer Michael Costonis shares Carol’s enthusiasm, “At CNA we are not afraid to take transformation to the heart of our business processes. We do not believe in innovation on the fringes, but the best way to achieve our outcomes is to go right to the core and make a difference.”

insurtechdigital.com

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Is automation the key to profitability in Insurtech?

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WRITTEN BY: JOANNA ENGLAND

TECHNOLOGY

The insurtech industry has embraced automation solutions to improve customer satisfaction. We take a look at the drivers behind the new technologies

I

n the good old days, insurance was all about long-winded processes, paperwork, and bated breath.

Customers often had to wait weeks while a claim was ‘processed’ to find out if a payout would be made. This was true, even if their lives were put on hold because of it. Manual due diligence and the underwriting process were not a job for the impatient.

But fast-forward a decade and the landscape has transformed. Along with smartphones and a swiftly growing IoT, insurance companies have swapped paper, pens, and calculators for AI-driven solutions, Robotic Process Automation, and cutting-edge platforms.

Many firms cite customer centricity as the primary driver of automation, because it speeds up claims, on-boarding, handles data with 100% accuracy, and delivers services – sometimes in seconds.

However, it also cuts costs significantly and is one of the reasons why innovative insurtechs have been able to succeed and grow with alacrity over the past decade. Less manual processing equals fewer staff and swifter processes equal significantly greater capital to create and market products.

Legacy systems vs insurtech innovation “It’s a case of seeing the grass is greener, technologically speaking,” says Paul Morgenthaler, Partner at CommerzVentures. He explains although insurance companies were initially sluggish to let go of their legacy business models, the success of technological advances in other sectors has driven the change. “Compared with most other industries, insurance was until recently under-automated.” insurtechdigital.com

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TECHNOLOGY

Morgenthaler says that as other sectors began to demonstrate clear savings from using automation, insurance firms quickly recognised that they needed to play catchup. “In addition automation uptake has been driven by ever-increasing customer expectations regarding transparency and response times, making it vital for firms who want to stay competitive,” he points out.

But it’s not just about ‘keeping up with the Jones’s’. The COVID-19 pandemic has also been a massive driver in terms of transformational technology in the insurance sector. And this has been driven by necessity, says Christian Nentwich, CEO of Duco, a global provider of cloud based data reconciliation and automation.

“There’s been a much stronger push for automation since recent changes with IFRS 17 and the Solvency 2 EU directive,” he says, referring to the latest IFRS standard for insurance contracts that will replace IFRS 4 on 1 January 2022.

“Add to that pressure from insurtechs and the difficulty of running manual processes with Covid lockdowns, and urgency has been increasing,” Nentwich explains.

But policy and EU regulations aside, the insurance business is a complicated one – and that means the technology to automate its processes effectively, have only recently become a reality, says Mark Colonnese,

“ Automation uptake has been driven by ever increasing customer expectations” PAUL MORGENTHALER, COMMERZVENTURES

Paul Morgenthaler Director of Aquarium Software, a technology platform provider for the pet and travel insurance industry.

“Historically, a lot of insurance technology used to be bespoke to each insurance company, created, in some cases, decades ago when technology was very different.

With the availability of on-demand computing and storage, the flexibility to do more automation in insurance has grown,” Colonnese remarks.

He explains that as more automation has been possible, technology vendors have invested heavily in the insurance sector, so the solutions now available are at sufficient maturity and adaptability to have a wide range of applications.

“In the early days, AI/ML-based automation platforms required deep knowledge and results were mixed. Now, technology insurtechdigital.com

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is lowering the skills barrier and driving more reliable and tangible outcomes for insurers,” he says.

Insurtech automation vs the customer But does automation make insurance companies more profitable – and is profitability the driving factor in transformation? If so, where does this leave the customer? According to Morgenthaler, the technology has improved customer satisfaction – creating a double win for the industry.

“Properly implemented, automation initiatives often show a strong ROI and time to value,” he says. “This is both in terms of lowering operational costs, as well as strengthening customer loyalty and reducing churn.”

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Automation helps in two key areas, namely profitability and risk, agrees Nentwich. “When automated processes are put in place, resources can be deployed elsewhere on higher value tasks,” he says. “In addition, the increase in automation reduces the chance of human error, thus reducing reputation risk or loss of revenue through fines or additional resources needed to rectify the error.”

But it’s not just about risk and accuracy.

According to Colonnese, efficiency is key in cutting costs – but also in improving the customer experience. Happy customers return and are loyal. They also recommend services to friends and family if they are very satisfied.

“Yes. It [automation] absolutely makes their operations more efficient, removing

TECHNOLOGY

“ Good customer service leads to trust, which leads to customer retention” MARTYN MATHEWS,

LEXISNEXIS RISK SOLUTIONS

many routine admin tasks from the policy and claims journeys,” says Colonnese.

“Automation allows staff to focus on complex value-added activities where they can have the biggest impact, for example in handling higher value or more complicated claims. Improving the customer experience of claims is also a hugely important factor in transformation; a speedier and easier experience for customers drives longer-term customer loyalty that ultimately contributes to business success.”

Insurtech automation challenges Because automation brings with it so many benefits, most experts agree it makes sense to implement the changes – even if they are radical and initially, expensive. But it’s a difficult band aid to rip off, says Morgenthaler, who points out that such radical shifts are alien to the insurance environment culture.

“Insurers face a major challenge around managing the organisational and cultural change that is required for automation to fulfil its potential. For an environment that has valued stability as part of a risk-averse culture, this presents a greater challenge than in other industries, where change management has become part of the organisational "muscle memory.”

The task can also be a logistical nightmare for those companies heavily reliant on legacy systems to manage data and information.

Automation case study: Martyn Mathews, Senior Director, Personal Lines, Insurance, UK and Ireland, LexisNexis Risk Solutions, describes why automation has become the essential model of choice for insurance companies – especially in recent months.

“We often talk about this frictionless process of buying insurance, which leads to profitability because if ‘friction’ exists, it’s bad for customer retention. For example, in 2020, we saw a particular broker challenged with a manual process where a customer would have to validate their no claims. But during COVID, all the new claims were sent to a physical office. This caused a lot of friction because after COVID hit, people had to leave the offices, they couldn't work in those premises and the claims were delayed.

LexisNexis went to that organisation to digitise and automate their process of validating someone's no claims. The customer experience was then greatly improved which ultimately led to profitability for the company as they didn't lose business.”

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TECHNOLOGY

“ Insurers need to prioritise investment in user centric design because people are used to doing everything on a mobile phone” MARK COLONNESE,

DIRECTOR OF AQUARIUM SOFTWARE

Nentwich explains, “Insurance companies have massive troves of data managed by many legacy systems: between actuarial, underwriting, claims, payments, investments, etc. which in the end has to be packaged nicely to report back to customers, investors and regulators.

“As companies look to adopt these new technologies, they will need to look at options for overcoming data silos, and holistically at their whole operation to gain the most automation.

Colonnese argues that the insurance industry has been sluggish to adopt new technologies, mainly because the complexity of the industry has made switching from legacy models to cutting edge technologies more complicated than it would be in other industries. In many cases, the ‘right’ technology to carry out an effective transformation has only recently been possible.

“This [delay in switching] mainly comes from the complexity of insurance, where the rules governing automation can be extremely bespoke with large numbers of variables and exceptions,” he says.

“Getting the systems and models trained up and tailored to business needs has therefore been a challenge. For example, a key challenge is to support more self-service-style claims applications from claimants. To do this, insurers need to prioritise investment in user-centric design because people are used to doing 66

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everything on a mobile phone app now. Part of this is ensuring accurate and real-time data management, made possible using the latest artificial intelligence and machine learning.”

Trending automation technology Machine Learning (ML) and Artificial Intelligence (AI) are the leading technologies transforming the insurance industry. Experts agree that claims processing is the area most likely to be handled by automation solutions because recent advances in mobile technology has enabled a seamless experience.

Mark Colonnese

Colonnese explains, “The biggest win in the immediate-term is the use of automation technologies in handling the claims process from start to settlement. With everyone having a smartphone in their pocket, it becomes easier for people to make claims because the raw materials – images, GPS data, forms etc can all be accessed from one device.”

Nentwich agrees, but says the reduction in risk is a driving factor because companies want to tackle the low hanging fruit first. “What are the riskiest and costliest processes that are in place today that affect our data integrity?

7 reasons to automate at a glance: • Greater stability of service in the event of a crisis • Streamlined processes • Reduced margins of error • Faster onboarding and services • Better allocation of resources • Increased customer satisfaction • Increased profitability insurtechdigital.com

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How do we get humans completely out of the equation in high-risk processes?” he asks.

“This has translated to focusing on areas where people are involved in manipulating data, such as a process to transform it for a consumption by another system or downstream process, or to investigate exceptions.”

He says that, while strides have been made in presenting data integrity issues to users, the next step and where insurers are seeing significant interest is for machine learning technology to reduce repetitive tasks by suggesting or carrying out next steps automatically based on past actions by a user.

Martyn Mathews, Senior Director, Personal Lines, Insurance, UK and Ireland, LexisNexis Risk Solutions says the greatest strides have been made in the car insurance sector, where it's not wholly unlikely to expect the duration between opening a claim and receiving a payment to be as little as 30 minutes.

“My customers talk to me about how we can pay a total loss claim in 30 minutes which seems quite fanciful and seems like a long way away. But actually the insurance market is on its way to doing that by using technology from the vehicle as well,” he says.

“And by 2030 all vehicles that leave the production line will have sufficient technology to be connected vehicles. The richness of data that's now available to insurance companies means they can automate and make faster decisions for the benefit of the customer.

Automation and profitability But whether the changeover has been challenging and or expensive, is a moot point when it comes to progress. The wave of automation within the insurance industry is unstoppable – and this is mainly because it makes companies more profitable in the foreseeable future. But Mathews says that 68

July 2021

ultimately, the desire to offer the customer the kind of service they are coming to expect is the driving force behind automation – and not profitability.

“I think it's all intrinsically linked, but I don't think that profitability is the first thing thought of as a measure from an insurance company when they consider automation. Rather, from my experience, profitability is one of the outcomes, but this is mainly because automation leads to a better customer experience.

“Good customer service leads to trust, which leads them to customer retention, which ultimately then can result in increased levels of profitability.”

“Ultimately,” says Mathews, “legacy systems are cumbersome and can let the customer

“ Insurance companies have massive troves of data managed by many legacy systems” CHRISTIAN NENTWICH, CEO, DUCO

TECHNOLOGY

down when extraordinary circumstances arise, which leads to dissatisfaction and then a loss of customers.”

“Automation of systems also aids profitability because it reduces risk,” says Nentwich. “When automated processes are put in place, resources can be deployed elsewhere on higher value tasks. In addition, the increase in automation reduces the chance of human error, thus reducing reputation risk or loss of revenue through fines or additional resources needed to rectify the error.”

Future-proofing the insurance industry At the end of the day, automation is a natural progression for the industry, and not a trend. Innovation happens for many reasons and is always rooted in providing better

services and products. It also increases competition – which is better for the customer and the marketplace.

Colonnese confirms, “Automation can help substantially reduce the costs incurred in the manual administration of policies, from sales and renewals to claims. This means greater operational efficiency for insurers, resulting in lower policy premiums for the customer, and thus having an edge in a fiercely competitive marketplace.”

Nentwich adds, “It is vital that the fulfilment engine in insurance companies is as lean as possible so that higher spend areas can be reserved for product differentiation, business agility, and so on. There is no real way to do this other than to push automation much further than it is today.”

Christian Nentwich

insurtechdigital.com

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EMERGENT HOLDINGS

AGILITY,

INNOVATION AND DIVERSITY WRITTEN BY: LEILA HAWKINS 70

July 2021

PRODUCED BY: JAKE MEGEARY

EMERGENT HOLDINGS

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EMERGENT HOLDINGS

Michael Hicks, CIO of Emergent Holdings, tells us about the importance of customer centricity, culture and innovation in delivering the best products and services to their customers.

E “ We embrace diversity, business agility, and collaboration to deliver the best products and services to the marketplace” MICHAEL HICKS

SENIOR VICE PRESIDENT AND CHIEF INFORMATION OFFICER, EMERGENT HOLDINGS

mergent Holdings is a remarkably diverse business, operating in multiple industry verticals, including property casualty and healthcare insurance, as well as software and services through its Advantasure arm.

Its healthcare vertical is focused on Medicare Advantage, aimed at the senior market and individuals who are moving into retirement and seeking supplemental healthcare benefits. Emergent Holdings manages one of the premier Medicare Advantage plans in the US. Despite the variety and size of Emergent Holdings, Senior Vice President and CIO Michael Hicks says they essentially have a startup culture, focused on profitable growth and diversification. "We're constantly looking at new product offerings and new business ventures" he says. "Our vision is to be the leading national provider of innovative solutions that improve health and safety outcomes. Everything we do is centered around improving the well-being of our members and insureds."

"We want to be the best at what we do through leveraging our collective strength, industry expertise and focused strategies.

Innovation, business agility, and customer centricity are differentiators that enable us to be very quick in adjusting to opportunities in the market" he adds. insurtechdigital.com

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Title of the video

Data is at the core of all their operations, which is crucial to delivering personalized services and experiences for their customers.

"There's a big shift happening in healthcare with the transition to value-based care" Hicks says. "We're delivering care to individuals with chronic conditions in their homes and at their convenience, leveraging communities to deliver a comprehensive set of services such as transportation and providing wellness education to improve health outcomes. Our technology powered by data is crucial to delivering these services while providing the best member experience possible."

As a customer-centric organization, Hicks explains that their employees must have a customer-first mindset. "We embrace diversity, business agility, and collaboration to deliver the best products and services to the marketplace. That's at the core of what a great digital company is all about – embracing the voice of the customer and empowering your workforce to create innovative solutions with the least amount of friction possible."

Over the last few years Emergent Holdings has invested in modernizing their core operating platforms to increase speed and

“Technology is one of the tools in my toolbelt, but I really pride myself on having the ability to influence change and solve problems” MICHAEL HICKS

SENIOR VICE PRESIDENT AND CHIEF INFORMATION OFFICER, EMERGENT HOLDINGS

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EMERGENT HOLDINGS

MICHAEL HICKS TITLE: SENIOR VICE PRESIDENT AND CHIEF INFORMATION OFFICER INDUSTRY: INFORMATION TECHNOLOGY & SERVICES LOCATION: UNITED STATES

EXECUTIVE BIO

agility. This includes a major focus in their property casualty business of completing a multi-year migration to the Guidewire platform. "Legacy technologies are a major challenge in insurance, but we have continued to invest in our core processing systems, reduce technical debt and transition our application hosting from on-premise data centers to the cloud. We're excited about the possibilities because as we emerge from COVID-19, our core platforms will enable us to deliver differentiating digital customer experiences and be much more responsive to the market."

Having a very strong partner ecosystem has been key to Emergent Holdings’ success.

"Our primary strategic sourcing partner, HCL, has played a major role in enabling us to scale our IT operations and helping us create the headroom for our employees to innovate." Emergent Holdings also has a close relationship with Microsoft, and in 2020 attained Microsoft Gold Partner status in Data Analytics.

Equally important is partnering with startups, and Emergent Holdings has acquired several startup ventures to expand their product offering. In 2019 they acquired Symphony, a Silicon Valley-developed cloudnative health management solution designed by physicians and care management experts to solve the complex issue of value-based care and plan/provider coordination. Following this, Emergent Holdings opened a small office in San Francisco. "It provides us with a presence in one of the epicenters of innovation in the United States" Hicks says.

More recently they acquired DecisionUR, a cloud-based solution that supports their workers' compensation vertical by accelerating the workers’ compensation claim review process which enables highly responsive care planning for those injured on the job.

Michael Hicks joined Emergent Holdings, Inc. in 2018 as Senior Vice President and Chief Information Officer with responsibility for leading an innovative, robust, and secure information technology function in support of Emergent Holdings’ portfolio of businesses.

With 25 years of active leadership in the insurance industry, Mr. Hicks’ previous roles include Chief Information Officer for Retirement Solutions and Corporate Technology at Guardian Life, and seven years with MassMutual Financial Group as Vice President of Shared Delivery Services where he was responsible for leading enterprise IT shared services and solutions delivery for MassMutual’s corporate business units. Mr. Hicks has a bachelor’s degree from Boston University and an MBA from Northeastern University’s D'AmoreMcKim School of Business.

EMERGENT HOLDINGS

Cloud-enabled digital healthcare transformation A Leader in the Forrester Wave™: Specialized Insights Service Providers, Q2 2020 A Leader in the Forrester Wave™: Application Modernization & Migration Services, Q3 2019

A Leader in Gartner Magic Quadrant for Data Center Outsourcing and Hybrid Infrastructure Managed Services, North America (June 2020)#

A Leader in IDC MarketScape: Worldwide Managed Cloud Services 2019 Vendor Assessment*

A Leader in Everest Group’s Talent Readiness for NextGen IT Services PEAK Matrix® Assessment 2020 A Leader in the Everest Group PEAK Matrix™ Assessment for Cloud Service Providers 2020

*Jul 2019 | Doc #US43251618

Know more

www.hcltech.com

#Disclaimer: GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

EMERGENT HOLDINGS

Another forthcoming new product is an AI and machine learning-based platform leveraging behavioral science to influence customer actions. "It allows us to create influencing campaigns, leveraging digital channels such as social media to gently nudge a prospect into making better Medicare coverage choices. The opportunities for expanding the application of this data-driven platform to various parts of the healthcare continuum are endless.”

“This is our version of Amazon or Googlelevel personalization based on deep learning and behavioral science.” They're aiming to take the new product to market in 2021.

As well as developing new solutions, Emergent Holdings has been digitally transforming many of their existing services.

One example is the digital expansion of Advantasure’s provider engagement solution which has been enhanced to seamlessly integrate with electronic medical record (EMR) systems, using automation and actionable insights that are unique to each patient at the point of care. The outcome is better

“ I'm a major proponent of democratizing innovation as the best innovation happens closest to the customer” MICHAEL HICKS

SENIOR VICE PRESIDENT AND CHIEF INFORMATION OFFICER, EMERGENT HOLDINGS

management of risk through enhancing the quality of care for members and improving the quality of claims data. "We've created a comprehensive digital solution that leverages EMR data and has integrated our processes into the EMR desktop, which provides an improved and more efficient experience for the providers we work with.”

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“ Diversity and inclusion is such an important part of who we are as an organization. I am the executive sponsor of our LGBTQ+ Employee Resource Network” MICHAEL HICKS

Working remotely as a result of the pandemic has helped Emergent Holdings better understand their customers, Hicks says. "Working remotely during COVID19 has really given us a strong sense of empathy for our customers and how it feels to navigate complex systems and processes. That empathy powered by design thinking will allow us to develop better products and services in the future."

Their plans for the future are to continue to focus on profitable growth, diversification, and innovation through empowering employees and leveraging their partner ecosystem. "I'm a major proponent of democratizing innovation as the best innovation happens closest to the customer. We will continue to embrace customer centricity and not lose sight of our vision of improving health and safety outcomes."

Another major factor of Emergent Holdings’ success is incorporating diversity into their workforce. "Diversity and inclusion is such an important part of who we are as an organization. I am the executive sponsor of our LGBTQ+ Employee Resource Network and am a proponent of allowing all of our employees to bring their authentic selves to work every day.” Additionally, they have implemented a comprehensive early career development program and are investing in developing a strong pipeline of STEM talent through partnering with organizations such as Girls Who Code and Black Girls Code. “We are continually focused on building a stronger and more diverse team, as diversity is what drives innovation."

SENIOR VICE PRESIDENT AND CHIEF INFORMATION OFFICER, EMERGENT HOLDINGS insurtechdigital.com

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THE FUTURE OF TELEMATICS IN AN AUTOMATED WORLD As connectivity increases, the role of telematics has expanded exponentially.

But will it become a mainstream option?

WRITTEN BY: JOANNA ENGLAND

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he telematics sector is on a massive growth trajectory, and reports show that it will have a global value of $3.56bn by 2026.

Indeed, rising consumer demand for high connectivity and intelligence within their vehicles, along with increasing government initiatives to encourage telematics services in their respective countries, are all contributing to the growth of the telematics market size.

The sector is also being driven forward by the advent of 5G, advances in electrical engineering, vehicle technology and AI as the automobile industry becomes further integrated with the IoT. This cutting-edge technology is a combination of informatics and telecommunications and mainly operates in the fleet management sector.

Commonly known as black box technology, telematics works by sending information directly from the vehicle to the cloud, where it is aggregated, and insights are created for companies that use the data to track the efficiency, safety and activities of their fleet.

These valuable insights result in streamlined processes as well as lower-cost insurance premiums and faster claims settlements.

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“ The data belongs to the driver, and they will need to provide consent for that data to be shared” MIKE BROCKMAN CEO, THINGCO

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Telematics from commercial to consumer Telematics currently occupies the commercial sphere, and although pay-permile insurtechs are now expanding into the consumer car insurance market, its position as a mainstream technology is debatable.

Mike Brockman, CEO of ThingCo, a company that develops next-generation telematics devices, believes the sector still has a long way to go before it corners the consumer marketplace.

He explains, “The insurance industry has found it difficult to make telematics work economically across all sectors since essentially the technology has been given away free and the risk-benefit to outweigh the cost has been difficult to achieve. Therefore, telematics-based insurance policies

represent about 2-3% of all motor insurance policies. It is far from mainstream right now.”

Brockman says that progress is being made in the industry as innovation and technology develops. “Some of the barriers that have stalled wider adoption are now being broken down as technology has both advanced and fallen in cost.”

A main driver, he believes, is the demand from customers for more personalised products. “We are seeing increased interest in telematics from drivers who want a more personalised policy based on their mileage and like the benefits telematics can offer in helping them enjoy safer journeys with the assurance that if they are in an accident, the device will expedite support and smooth the insurance claim.”

Top 10 telematic countries

Leading the way in telematics by order of regional adoption

#1 USA #2 Canada #3 Germany #4 France #5 UK #6 Italy #7 Russia #8 The Nordics #9 Asia-Pacific #10 China *Insights from Valuate Reports insurtechdigital.com

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“ Telematic technologies could improve driving behaviour, but it is subjective” CALLUM RIMMER

CO-FOUNDER, BY BITS

Mainstream telematics for fleets However, some experts believe telematics is already mainstream because the use in commercial fleets has expanded. Lloyd Morris-Fletcher, Head of Digital for iCompario, the UK-based business comparison site startup, says, “Our experience is that a huge number of industries reliant on transportation are using the technology to improve the quality of their service and help their drivers.

Morris-fletcher says that industries as disparate as emergency services and agriculture use telematics in their vehicles, and it’s become one of the standard technologies in fleet management, which managers rely on to run their businesses.

He explains, “Businesses use telematics’ black box technology to help reduce their 84

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insurance premiums, GPS satellite tech to aid them in stolen vehicle recovery and data collection to help introduce safer driving behaviours. These are mainstream concerns.”

Morris-fletcher says another strong indication that telematics is going mainstream is that according to a report by AIG, six out of 10 drivers are willing to install a telematics device in their car, so they can reduce their insurance premiums.

“Right now, telematics is very much a mainstream technology, but in the future, it could become even more popular, particularly as autonomous vehicles develop, and companies seek to monitor them,” he says.

The cost-effective solution provided by telematics products has boosted its popularity

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mainstream, but we will be there in the next few years."

in the commercial sector, and is also driving its growth among consumers, says Callum Rimmer, co-founder of By Bits. He explains, "The cost of existing telematics solutions (Hardtop, OBD II, and Mobile) has been going down year on year for a while.

This has driven adoption in a number of different sectors and applications.”

Rimmer says the data telematics provides can transform processes and product offers which is creating opportunities for innovation. The data, and its use, will become mainstream; the acquisition of the data is secondary, he asserts.

“Existing telematics solutions will be replaced by data sourced directly from the vehicles. The ubiquity of data and its cost of acquisition aren't quite there yet for it to be

5G, connectivity and telematics innovation The introduction of 5G services will be a boost to the telematics industry as it is strongly reliant on connectivity. Unlike other developments in the insurtech space, electrical engineering, rather than AI, is the driving technology.

Morris-Fletcher says, “5G is up to 100 times faster than 4G, and its introduction to telematics means information can travel between the various tech touchpoints much faster. This means businesses can meet the needs of their customers much more effectively.”

But device development and GPS technology also play a crucial role. ThingCo’s flagship device, Theo, combines solar power, high-grade GPS, a sensitive accelerometer, AI automated crash detection and voice controls. The company has also created a serverless solution using AWS IoT to process thousands of data points in real-time.

Morris-Fletcher says the system enables complete transparency for insurers and improves the safety of drivers. “In an accident, a voice command activates using the device’s inbuilt microphone and speakers so that the customer can immediately confirm or deny the accident, reducing false alerts and putting insurers in much greater control. We identify exactly what has happened, establish if anyone is injured and need emergency services or other services such as a hire car to get them home,” he says.

Bridging the gap between cutting-edge devices, analytics and connectivity is the aim of the game, and robust solutions that provide these services will result in greater uptake among consumers, says Rimmer, who points out that hardtop, OBD II, and

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mobile telematics solutions are currently the predominant data collectors.

“Connected car options via big car manufacturers have started to become available. By Miles collects data directly from Telsa and Mercedes vehicles to run our pay-by-mile motor insurance proposition.

In all cases, data is transmitted via cellular networks to cloud server solutions that store it and then provide the platforms to transform it into something useful.”

Data collection and protection in telematics With so much data already being streamed and sold across all industries, the question of privacy looms large for many drivers in the consumer space. There is a natural suspicion about anything that might lead to tracking activity and storing information surplus to direct requirement.

The regulation of this data and who would be responsible for handling it fairly has not yet been fully addressed, says MorrisFletcher. And this could potentially put consumers off switching to telematics driven services in the insurtech space.

“Privacy is a huge issue for technologies that require data collection. People are acutely

5G and telematics The advent of 5G could be the most important development in connectivity for telematics. 5G has enabled companies to innovate and create Vehicle-to-Vehicle (V2V) and Vehicle-to-Infrastructure (V2I) communications capabilities. This will be critical in the development of safely automated vehicles. Experts believe the cost of accidents will fall dramatically as automated cars overcome human error.

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aware of the significance of their personal data and are rightly protective of it,” he says.

Ultimately, telematics records the activities of drivers, and this can be classified as personal data. This means technology like telematics must assure people that their data is looked after.

Morris-Fletcher says people can be reassured this is the case because of existing legislation. “Legislation, such as the Data Protection Act, places strict requirements on companies that handle telematics — those making the devices and those using them.”

He continues, “While data privacy is a sensitive issue that could potentially make telematics unpopular, the reality is the technology is gaining in mainstream popularity.

So, I agree that the potential is there for telematics to prove unpopular, but only if people believe businesses aren’t meeting their legal obligations regarding data protection.”

Rimmer believes it's all about consumer choice and that telematics will take off in the consumer sphere because it offers flexibility through its data-driven approach. But one element that goes against it in the consumer

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sphere is the way it is used, which often results in punishing drivers, resulting in a poor relationship between insurer and customer.

He says, "In the UK, personal motor insurance has predominantly used telematics to penalise drivers. This has created friction to adoption from customers. They see it as a tool that is only used to manage young drivers or higher risk. At By Miles, we just use the telematics data to track the miles driven.”

Rimmer says it is this approach that will improve the public perception of telematics.

“I believe customers will allow their data to be collected if they receive both a better experience and also clearer and more transparent premium charging.

“I also believe the existing negative associations with telematics will be eliminated with a collection of data directly from a connected car vehicle where the relationship feels more like an existing app experience."

Perception of value The suspicion surrounding telematics from the consumer sphere could also have been caused by the perception customers have of value and how it is measured. Brockman believes that by giving away black boxes, insurers have sent a clear signal to the customer that the technology is serving the company’s needs. This means consumers are yet to see the value that can be derived from telematics.

“You need to make the device a desirable piece of technology that consumers would value in their own right... By exploiting advances in technology, insurers can get asset value from telematics, i.e. extract greater economic value from the technology than its cost. That means using the data to mitigate risk, manage claims effectively and lower costs and ultimately give customers a better insurance experience,” he says.

Telematics and driver behaviour One of the strongest arguments for the use of telematics is that it can improve driver behaviour and contribute to road safety. But how true is that - and to what extent would driver actions be modified through the use of such technology?

Rimmer doesn’t believe so and says the technology should be about customer choice and flexibility. "There is an element of positive selection that comes with telematics. Better risk will pick telematic policies. Telematic technologies could improve driving behaviour, but it is subjective.”

Rather, he says, telematics should be seen as a driver enhancement system because it can “lower premiums (through UBI), warn of toll charges, give engine health and diagnosis, find the vehicle for you, and help alert your insurer if a likely crash has happened.”

However, Morris-Fletcher believes one of the technology’s greatest advantages is its ability to improve poor driving.

“Telematics can certainly improve driver behaviour,” he says, explaining that it records data relating to a number of driving behaviours, such as speed, braking severity and corner taking harshness — all of which do lead to unsafe driving in a variety of ways.

“The technology can quickly show if a driver is behaving dangerously when they’re

“ Autonomous vehicles are not yet as safe as cars with real drivers” LLOYD MORRIS-FLETCHER

HEAD OF DIGITAL, ICOMPARIO

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“ Connected cars will almost certainly have telematics embedded” MIKE BROCKMAN CEO, THINGCO

behind the wheel. This provides the owners of this data with the evidence they need to enforce changes in driving behaviour, such as reducing speed.”

Morris-Fletcher points to government studies (such as the ‘Provision of telematics research’ report) that have looked at the capacity of telematics to lead to safer driving behaviour.

“While such studies have determined that telematics can influence driver behaviour in a desirable manner, the assessment is it’s difficult to say conclusively that the technology makes people safer drivers.”

However, he says the ultimate reason for this is that telematics simply shows people the behaviours they need to change to be safer drivers. It doesn’t force them to drive more safely.

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“The data you get from telematics needs to be combined with driver training to lead to safer driving,” he says.

Brockman is also a big proponent of telematics, encouraging and making drivers more safety aware. He says, “Thousands of young lives have been saved from the trauma of a road accident thanks to telematics insurance. If you track road casualty data in young people over the last nine years, the number of casualties in this age group has fallen as telematics adoption increased. That’s no coincidence.”

Automated vehicles and the future of telematics Currently, telematics is focused on the health of the car, the driving conditions and the skills of a human driver to analyse risk and produce real-time insights. But what will happen when

CLOUD & CYBER

The Future of Telematics – AI and Beyond

autonomous vehicles become mainstream, and there is no longer a human driver to monitor?

Morris-Fletcher believes the technology will be in greater demand for several reasons and says telematics will play an essential role in the autonomous car market. “It can be argued that telematics is more important to automated vehicles than for those with human drivers,” he says because autonomous vehicles are not yet as safe as cars with real drivers.

“Telematics can track the behaviour of driverless vehicles,” he explains, “and tell their owners if they’re moving safely, pinpointing any areas that require attention. In the short term, the expected change automated vehicles will bring to the telematics space is that the devices will become more popular.”

However, the long term story is more difficult to forecast, he acknowledges. “As driverless vehicles become more advanced, it’s difficult to say what changes will come.

However, the expectation is that telematics will remain an important way of reviewing the performance of these vehicles.”

Brockman agrees. He says connected cars will almost certainly have telematics embedded, and this will reduce the need for a device to be fitted to the vehicle. The question will then be how insurance providers gain access to the data from the car for the purposes of insurance.

“The data belongs to the driver, and they will need to provide consent for that data to be shared in return for a personalised premium.

This is a key time for the insurance market to prepare for this future and learn how they can leverage driving data to provide real value to their customers.”

Rimmer concurs. He says, "Data will come directly from the vehicle. Telematics hardware will disappear, but telematics data will remain.

The data will also be richer than what we can currently access. This richer data will become essential because the risk moves from the driver to the vehicle in an autonomous future, and this will mean that the data becomes necessary rather than optional when underwriting that risk."

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AI

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AI

IS AI REDEFINING

WRITTEN BY: JOANNA ENGLAND

THE

INSURANCE INDUSTRY? As the insurance industry becomes increasingly digitised, we speak to technology experts about the transforming space

T

he role of artificial intelligence (AI) in the insurtech sector is becoming increasingly active. From automating the underwriting process to facilitating telematics and even predicting the likelihood of hurricanes, AI’s everwidening takeover of legacy systems looks set to continue.

AI has the potential to impact the insurtech and insurance industry in several ways. It is currently being utilised in claims processing, underwriting, fraud detection and customer service. To enhance the customer experience, many insurers are also investing in virtual assistants like chatbots.

We discuss the new developments, cutting-edge trends and how AI will impact the human insurance workforce with some of the industry’s leading experts. insurtechdigital.com

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How Citizens Bank Digitally Transformed Credit Card Fraud and Claims Processes In an era where customer experience can make or break your financial institution, banks have to optimize and automate or risk getting left behind.

REGISTER NOW WATCH NOW

Featuring Guest Speakers From:

AI

PAUL DONNELLY COMPANY: MUNICH RE AUTOMATION SOLUTIONS Currently based at St James Hospital in Dublin, Donnelly is an experienced international senior executive responsible for the EMEA business growth and operations.

GUY KIRKWOOD COMPANY: UIPATH As the Chief Evangelist, Guy Kirkwood is part of the team leading a market that reshapes how people work.

UiPath is a Forbes AI 50, a CNBC Disruptor 50, number three on the Forbes Cloud 100, number two in the FT rankings, and number one in the Deloitte Fast 500.

“ We are seeing a thirst among our clients to move to the next step beyond rules-based automation” EXECUTIVE VICE PRESIDENT, EMEA, MUNICH RE AUTOMATION SOLUTIONS

How embedded is AI in the current insurance market?

Paul Donnelly: While we’re beginning to see technology such as AI play a key role in the industry’s progression, we’d ideally like to see it embedded further in the market. The insurance industry is continually digitising after too long being burdened with outdated processes which impair the customer’s experience throughout the underwriting process. Currently, this is drawn-out and filled with repeated, intrusive questions.

COMPANY: MIND FOUNDRY

MEET THE COMMENTATORS

PAUL DONNELLY

BRIAN MULLINS Mind Foundry was formed as a spinoff from Oxford University’s AI department. Using the latest expertise and technology, the company concentrates on implementing AI in the insurance industry.

A key investor in the enterprise is the international insurance company ANDI.

WAYNE BUTTERFIELD COMPANY: ISG As Global Lead for Automation Solutions, Wayne Butterfield is an automation expert responsible for helping organisations leverage technologies, such as RPA, NLP, OCR and Virtual Agents to create efficiency and improve the customer/employee experience.

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Insurtech 2030 - what to expect Four trends that are changing the face of insurance forever, according to McKinsey Data explosion from the IoT There will be a massive increase in the amount of data available to insurance companies by 2030 as devices in all walks of life gather, connect and send data.

These will include cars, fitness trackers, home assistance, smart wearables, home monitoring smart devices and mobile phones. Experts estimate there will be up to one trillion connected devices by 2025.

Robots will become commonplace The field of robotics is expanding at an exponential rate. Experts estimate that by 2025, additive manufacturing (3D printing) will radically reshape manufacturing and commercial insurance products. By 2030, a large proportion of vehicles on the road will be self-driving.

Open source and data ecosystems Open source data will be shared across industries, and public and private entities will work together to create ecosystems to share data for multiple use cases.

Cognitive technology Convolutional neural networks and deep learning technology will evolve and be applied to a much wider sphere. These cognitive innovations are loosely based on the human brain’s ability to learn.

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Brian Mullins: AI is very embedded in the insurance market, especially compared to other sectors within financial services.

Several breakthroughs have been made largely by disruptors, who have used AI to change insurance methodologies and that investment continues to optimise their business practices, widen their competitive edge and offer customercentric products.

However, we will look back ten years from now and see that we were only beginning to scratch the surface of what is really possible.

The desire to change and implement all of the benefits of AI is tampered with by the reality that many insurers are large organisations with workforces and work practices that will take years to adjust. This is why much of the innovation to date has been the preservation of insurtech disruptors.

AI

Wayne Butterfield: AI comes in many forms, but the most prevalent in the insurance market at present are conversational AI (used for frontend customer service), machine vision (used for damage appraisal and claims) and machine learning (used in underwriting and premiums).

AI isn’t universally used in the insurance industry, but most insurers are using some form of it.

What trends in technology are we seeing emerge?

Paul Donnelly: Across the globe and among my user community (EMEA), a variety of technology trends are emerging within the industry, all with the common goal of significantly bettering the end-customer’s experiences. Despite the destination being the same for each region, they’re certainly at different stages on the journey.

Some markets are currently experiencing the important shift from paper forms to digital on a like-for-like basis. Others are implementing digital onboarding capabilities and automated underwriting to streamline the interview process. Elsewhere, markets are using non-interview data to reduce the number of questions asked of the applicant and the duration of the interview, while others are using Machine Learning and AI techniques to route applicants through the most efficient path for them to provide the best user experience.

The crucial component that ties them together is the use of data to support and optimise the journey and their understanding of the business. We don’t expect this to change anytime soon.”

Brian Mullins: Usage-based insurance has been a central part of insurance portfolios insurtechdigital.com

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for a while now, especially in car insurance, and at the heart of this is the accurate assessment of individual risk.

This has paved the way for a rise in drivingbehaviour classification models, driven by telematics data, that capture the capabilities of connected vehicles and edge computing.

Access to real-time data is enabling insurers to reimagine their insurance products and deliver hyper-personalised insurance offerings.

Another emerging trend – which we have seen in other industries, too – is the use of AI to speed up data processing.

This reduces the human time needed to process claims or investigate fraud, which allows insurers to concentrate their human resources on validation, correction and non-trivial investigation.

However, it is worth noting that some of the AI trends that were starting to emerge – like computer vision – could get stifled by much-needed regulation, such as the recently published proposal for a regulation laying down harmonised rules on AI by the EU. Examples of this include Lemonade’s ML model, which uses facial recognition to assess if a claimant is trustworthy, or applications that include the use of computer imagery to instantly assess damage to a car or help advise a customer on the medical services to seek based on their symptoms.

Hyper-automation is emerging as the new technological system of choice. What makes it so unique?

Wayne Butterfield: Hyper-automation is just the combination of lots of useful technologies, ranging from those that assist in the discovery of opportunity, a separate set that helps to automate processes and additional capabilities that prove value 96

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has been created. It’s this end-to-end that differentiates it from standalone machine learning, RPA and AI, and it’s why it has become so useful to organisations.

Guy Kirkwood: Hyper-automation can reach more workflows than RPA can alone.

Take processing documents as an example.

RPA can scan and extract structured data that you have taught it to look for. However, when you apply Document Understanding and Computer Vision, the software robots can also read and understand unstructured data such as handwritten notes, scans or images.

As a result, automation’s potential grows.

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“ We will look back ten years from now and see that we were only beginning to scratch the surface of what is really possible” BRIAN MULLINS CEO, MIND FOUNDRY

It is garnering significant interest around the world, with Gartner naming it a top strategic technology trend of 2021. It is no surprise that hyper-automation has become so popular when you consider the vast opportunities it has to offer.

All jobs have some repetitive element, and thus every job can benefit from hyper-automation. It can be applied in any company, industry and within any technology environment. Relative to previous digital transformation efforts, hyper-automation is easy to use and simple to deploy across the enterprise. Therefore, development cycles remain short, providing a short time to value and high ROI. Paul Donnelly: We are seeing a thirst among our clients to move to the next step beyond rules-based automation.

Namely, the combination of rules-based automation with AI and ML techniques.

In other fields, this is often referred to as “hyper-automation” in the life insurance underwriting process, this is described as the move from “Automated Underwriting” to “Augmented Automated Underwriting” (AAU).

AAU combines traditional automated underwriting systems and layers in the benefit of AI and predictive models. The first place where such systems are proving themselves is in the early part of the customer journey.

Why has AI become so central to the underwriting/customer services process?

Brian Mullins: Particularly in life insurance, current online customer journeys are often no more advanced than their off-line predecessors. Too often, excessive manual processes and back-office procedural steps determine the steps involved in the application process, leading to substandard insurtechdigital.com

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customer experiences. And as purchasing life insurance isn't something we naturally look forward to anyway, complexities within the process will only discourage today’s digital-savvy customers even further.

This is where AI is crucial in optimising the end customer’s journey. Implementing AI techniques enables insurers to sidestep the need to ask customers repeated, personal questions and instead route them through the questions which are relevant to them.

Because in an age where companies like Amazon allow us to easily buy what we want with a few clicks, we naturally start to expect the same slick user journey elsewhere.

Therefore, we urge the industry to take the next step as underwriting technology evolves and implement AI and machine learning techniques. These identify patterns and use data points beyond human capabilities. As 98

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“ Rather than replacing entire jobs, hyperautomation relieves the burden of the menial, administrative business tasks that litter an employee’s day” BRIAN MULLINS CEO, MIND FOUNDRY

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Machine Learning algorithms can be trained to discover policyholders’ behaviour, preference, the inclination for risk, and even fraud, learning from past examples and adapting to new ones without the need for human intervention.

a result, insurers have assessed customer risk profiles and can reduce the number of questions asked to the applicant, significantly removing friction.

Brian Mullins: Current data volumes mean that processing quotes, renewals, claims, customer requests, etc., is at the limits of what can be handled by human operators assisted by traditional information systems.

In the past decade, companies have turned to robotic process automation to speed up manual processes and amplify the work of their handlers. Yet today, this is still not sufficient, and to survive in these oceans of data, let alone to innovate and stay ahead of the curve, insurers like many other businesses have turned to AI to discover more subtle patterns in data, automatically adjusting to new trends, threats and opportunities.

There is a natural suspicion of AI that it will result in fewer jobs for actual humans as manual roles become less available.

How does this play out in the insurance sector, and do you think it's true?

Wayne Butterfield: To date, and very likely, even in the future, automation hasn’t actually caused any significant job losses.

Instead, we’ve seen and will likely continue to see it focus on task automation - many other activities still need to be completed by a person. I’d estimate around 90% of efficiencies gained so far have been used to negate the backfilling of open positions or dealing with extra volumes in other parts of the business, which is why there has been very little in the news ever about major job losses to date.

Paul Donnelly: We are not seeing a reduction in demand for skilled underwriters. In fact, in many markets, the opposite is true. Take the example I gave of our UK client that deployed our SPECTRA system as a pre-sales tool for advisers to get an indicative underwriting decision.

This function was previously performed by members of the underwriting team.

By making this change, the insurer was able to improve the service to advisers, not only by providing them with immediate dayor-night access to the likely underwriting decision for their client, but also by diverting the resources previously assigned to this task they were able to commit to making underwriting decisions within one working day, with decisions available Monday insurtechdigital.com

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“ Hyper-automation is just the combination of lots of useful technologies” PAUL DONNELLY

EXECUTIVE VICE PRESIDENT, EMEA, MUNICH RE AUTOMATION SOLUTIONS

to Friday from 8am to 6pm, and further commit to making their underwriters more available to advisers to discuss feedback on individual cases.

Guy Kirkwood: When it comes to hyperautomation, the technology actually offers the insurance sector the chance to become more human-centric. As automation works behind the scenes on repetitive and data-intensive processes, tasks that are best suited to human skills will remain in human hands.

In the insurance industry, tasks that may land in the hands of automation include extracting information from customer correspondence and filling out claims forms.

It is the work that once required a human to read, copy and paste data. However, tasks such as negotiation and building long-lasting client relationships will remain in human hands, as they require human ingenuity and judgement.

Therefore rather than replacing entire jobs, hyper-automation relieves the burden of the menial, administrative business tasks that litter an employee’s day. This leaves employees with more time to do the work that requires them to think, collaborate and solve problems. In other words, the more rewarding work that humans, by nature, are best at. insurtechdigital.com

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2021

INSURTECH

LEADERS TO WATCH WRITTEN BY: JOANNA ENGLAND

As the insurtech sector comes into its own we take a look at the top 10 faces behind this disruptive industry’s extraordinary success

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raditionally, the insurance industry has been unwilling to adopt the latest technologies. But the sector is now evolving swiftly, with a new breed of young and dynamic figures creating companies that are shaking up the marketplace.

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Jennifer Fitzgerald CEO and co-founder of Policygenius

Jennifer Fitzgerald founded Policygenius following a stint in the Peace Corps in Honduras, followed by a career in consultancy at McKinsey & Company. Fitzgerald, who was named Ernst and Young Entrepreneur of the Year New York 2019, worked with top financial services companies, national insurers and wealth managers on marketing and strategy. She recognised the gap between insurance providers and online customers. From there, Policygenius was born.

“We discovered there was a big disconnect between traditional insurance and digital consumers .”

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Oliver and Alexander Kent Braham Founders of Marshmallow

The identical twin brothers, along with fellow founder, David Goate, set up the insurtech that provides comprehensive services and products to expats and immigrants newly arrived in the UK. Marshmallow grew by an astonishing 3000% in 2019.

Alexander Kent Braham says, “This sort of growth isn’t just rare in insurance –but across the whole tech space, where getting to US$10mn in two years is classified as very good –something we did in seven months.”

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Phil Ziedler

Founder of DeadHappy Turning the business of life insurance and death on its head is all in a day’s work for Phil Ziedler.

His vision of creating a frank and quirky platform where life insurance policies can be arranged digitally in under five minutes is a first for the industry.

Ziedler says, “Life insurance isn’t meeting customers’ needs. The majority of customers cancel it within nine years because it’s inflexible and fails to meet their changing requirements.”

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Alex Dalyac

Co founder and CEO of Tractable Alex Dalyac holds a Masters in computer science from Imperial College London, where he led the Computing department’s first industrial application of deep learning. He founded Tractable in 2014 on the back of his research. The leading AI company specialises in visual tasks for the insurance and automotive market.

“I was compelled by the idea that software was the one thing you could build in your bedroom, and use to serve millions of people,” he says. insurtechdigital.com

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TOP 10

06

Tim Hardcastle

CEO and co-founder of Instanda A keen advocate of technology, Tim Hardcastle founded the cloudbased insurance ecosystem, Instanda in 2016. He was CIO at Hiscox and COO of Agilisys, is a qualified chartered accountant and has a range senior and C suite experience spanning the dotcom boom through to large scale system implementations of SAP and Oracle.

Describing Instanda’s rise to success, he says, “Much like other startup founder stories, it was much harder and took a lot longer than we thought.”

05

Adrian Rands

CEO and co-founder of Quantemplate A dedicated kite surfer and university drop out, Adrian Rands, co-founded Quantemplate with his friend Marek Nelken in 2012. The move followed several years as a Lloyd's reinsurance broker where he established a reinsurance treaty desk specialising in emerging markets.

Rand says, “We built this company from day one with a foundation of deep expertise in the insurance industry and a vision to help clients gain the insights which bring competitive advantage.”

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04

Callum Rimmer

CEO and founder of By Bits After developing apps at Orange, Deutsche Bank, Connected World and Goldman Sachs, Rimmer is now disrupting insurance in the insurtech market with his startup, By Bits. The software as a service (SaaS) model can be integrated into existing technology systems or used as a stand-alone, white label solution.

Rimmer tells us, “Insurers are staring at a window of opportunity to differentiate in the market by offering great experiences and fairer, transparent pricing and our future is to enable this vision to be realised.”

03

Sten Saar

CEO and co-founder of Zego Sten Saar and co-founder Harry Franks launched Zego in 2016, just six weeks after they conceptualised it. The aim is “absolutely” to become a global giant as big as Allianz or Axa are now, says Saar, a 33-year-old Estonian native who started his first business at 17. To date Zego has provided more than 17 million insurance policies and covered more than 200,000 vehicles in five countries.

He said, “We’ll also continue investing in technology and will double down on our thriving fleet offering.”

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Scott Walchek

Founder and CEO of Trov

Technology advocate and expert investor, Scott Walchek has raised over $130mn from every kind of capital source. He's started four successful tech startups and is now transforming the global insurance industry with Trōv, the technology-enabled brokerage that combines software with tailored insurance products to solve the complex risk management issues facing companies in emerging mobility and gig work. Trov was initially launched as a consumer app introducing on-demand insurance for over 30,000 individual items, available in the US, Australia, and the UK. Walchek told InsurTech Digital, “Soon, it will be hard to conceive of a time when automation wasn’t being used to inform and safeguard insurance providers and policyholders. As a sector built upon number crunching and risk analysis, insurers need to embrace and accept that automation is their holy grail.”

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Julian Teicke

Investor, CEO, and founder of wefox Julian Teicke aims to make Berlin the insurtech hub of Europe. The 33-yearold entrepreneur launched his first e-commerce venture, DeinDeal in 2011.

By 2014, he’d launched a second startup –a consultancy partner of Salesforce called EMPAUA. In November 2014, he created wefox, which is now the largest insurtech in Europe.

“ The success of wefox is due to our ability to focus on achieving our purpose –to keep people safe –at scale and pace”

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Describing wefox’s future plans, Teicke told us, “We’ll focus on technology, AI and innovation to better understand our customers and help them identify risk before it happens, changing the very model and definition of insurance and getting the right protection in place as a customer needs it, not in case a customer needs it.”

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Reinventing Insurance at scale: Julian Teicke

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