InsurTech Magazine - January 2022 by insurtechdigital

January 2022 | insurtechdigital.com

Generali Vitality: A little healthier every day Technology: Claim settlements and the customer experience

TRANSFORMING THE LIFE INSURANCE SPACE

Top10: Digital insurer leaders CURE Insurance: Equality in the auto insurance

Mark Holweger, President & CEO discusses it's transformation in the wake of COVID-19 and the innovative technologies

Never miss an issue!

+ Discover the latest news and insights about Global InsurTech...

JOIN THE COMMUNITY

The InsurTech Team EDITOR-IN-CHIEF

JOANNA ENGLAND EDITOR

DERIN CAG EDITORIAL DIRECTOR

SCOTT BIRCH

PRODUCTION DIRECTORS

GEORGIA ALLEN DANIELA KIANICKOVÁ PRODUCTION MANAGERS

PHILLINE VICENTE JACK THOMPSON JANE ARNETA ELLA CHADNEY

PRODUCTION EDITOR

JANET BRICE CREATIVE TEAM

OSCAR HATHAWAY SOPHIE-ANN PINNELL HECTOR PENROSE SAM HUBBARD MIMI GUNN JUSTIN SMITH REBEKAH BIRLESON JORDAN WOOD VIDEO PRODUCTION MANAGER

KIERAN WAITE SAM KEMP

MOTION DESIGNER

TYLER LIVINGSTONE DIGITAL VIDEO PRODUCERS

EVELYN HUANG JACK NICHOLLS MARTA EUGENIO ERNEST DE NEVE THOMAS EASTERFORD DREW HARDMAN MARKETING DIRECTOR

ROSS GARRIGAN

MARKETING MANAGER

EVELYN HOWAT

PROJECT DIRECTORS

JAKE MEGEARY MICHAEL BANYARD JOE PALLISER

MEDIA SALES DIRECTOR

RICHARD TURNER

SALES AND MARKETING DIRECTOR

JOE MARRITT

MANAGING DIRECTOR

LEWIS VAUGHAN

CHIEF OPERATIONS OFFICER

STACY NORMAN CEO

GLEN WHITE

FOREWORD

THE DATA DILEMMA Recently I interviewed the CTO of one of the world’s leading technology companies.

“I keep telling my daughter to use a VPN to keep her data private. But like most young people, she thinks she knows it all”

INSURTECH MAGAZINE IS PUBLISHED BY

We chatted about the value of data, and then the conversation inevitably turned to cyber security and privacy concerns. But unlike many CTOs, this one took a bold approach to the question. Instead of telling me that companies (and his specifically) are keeping all data super-secure and that there was nothing to worry about, he said, “I keep telling my daughter to use a VPN to keep her data private. But like most young people, she thinks she knows it all.” Why? Because the amount of data that online portals store on their visitors, which then get passed on to third parties, is endemic. Corporations are making billions from every wearable worn or keystroke made. And, with the growth of the IoT and 5G, the potential for data gathering is exploding. But what about the benefits? Customers are getting better, lower-cost products because of sharper KYC insights. And we all want faster, cheaper, easier to use services. The less effort we make to get the product we want, the more attractive it becomes. That's human nature. The insurance business thrives on data. It is, and always has been, the lifeblood of the industry. Now it has a vast ocean to glean from. But at what point should we be concerned? While robust regtech and regulation protect the rights of the consumer, insurance companies are in the clear. And, isn’t it our responsibility as individuals to step up and protect our personal data on a daily basis? As a huge technology fan and advocate of insurtechs, I have to say, this quandary is ongoing for me – and will continue to be so as 2022 unfolds. Thoughts anyone?

JOANNA ENGLAND joanna.england@bizclikmedia.com

insurtechdigital.com

CONTENTS

Our Regular Upfront Section: 08 Big Picture 10 The Brief 12 Timeline: The conman and the canoe 14 Trailblazer: Patrick Ryan 18 Five Minutes With: Adrian Rands

Strategy

Acceptable risk: technology innovation in underwriting

Transforming the life insurance space

Incentivising health and wellness

Legal & General America

Generali Vitality

Digital Transformation

The Future of Insurance: examples of blockchain use cases

MGA:TPA

Partner networks and the future of insurtech

Technology

Claim settlements and the customer experience

CURE Insurance Ethical car insurance for the community

104 Top 10

Digital insurer leaders

Seismic or small, change is all around us With technology and human ingenuity, we can make change work for you and your business.

Let there be change

Accenture and GSC: Building a prosperous relationship Paulo Salomao of Accenture tells us how they are helping Green Shield Canada to digitally transform their business. Paulo Salomao is a Managing Director for Financial Services at Accenture Canada, where he has overall responsibility for the company’s insurance business in the country. He is also responsible for the day-to-day partnership with Green Shield Canada (GSC), one of the country’s largest health and dental benefits providers. Salomao explains that the partnership formed when GSC was looking for a lead partner to help drive their ambitious digital transformation program. “They wanted to both introduce a new digital health business, as well as drive a step change in the performance of the legacy group benefits business” he says. Accenture is a global professional services company with leading capabilities in digital, cloud and security across 40 industries. The firm offers Strategy and Consulting, Interactive, Technology and Operations services—all powered by the world’s largest network of Advanced Technology and Intelligent Operations centers. “We have around 10,000 strategists globally, which is on a par with the largest strategy firms around the world. We also have

around 50,000 professionals who help our clients bring transformation to life through people, technology, and change efforts” Salomao explains. The company is also the largest digital marketing agency in the world, with more than 60,000 data and analytics professionals. Salomao says that partnerships such as the one with GSC are at the heart of Accenture’s business. “It’s very difficult to unlock substantial value for our clients through one-off efforts, so the primary focus of our organisation is to develop partnerships with clients like GSC. We go out of our way to ensure these are win-win, and they create value for all of those involved.” The partnership is still in its early days, and Salomao says their key objective is to become the partner that will help them achieve their broader digital transformation aspiration in a way that is both cost efficient and market-relevant. This will involve three main things: taking GSC’s existing capabilities and complementing them with new cloud, CRM, data and analytics technologies; futureproofing the legacy business so GSC can quickly react to changes in the operating environment; and bringing together the legacy business and the new digital health business, so GSC can continue to be a market leader. “When we successfully do that, then I think we’re going to have a very prosperous partnership with GSC for many years to come” he says.

Learn more

BIG PICTURE

January 2022

Uninsurable

California wildfires, 2021

According to a new report by Bain & Company, the global cost of insurance premiums will hit $10trn by 2030, and serious climatic events will become uninsurable by that date too. Data suggests risk factors are shifting away from traditional areas and focusing on new challenges such as climate change, which looks set to increase economic losses up to ten-fold over the next 30 years, to a different risk outcome for customers in the future. The outcome means areas that suffer from climatic disaster, like the California Hills (pictured) will no longer be insurable.

insurtechdigital.com

THE BRIEF “ THE MAIN BENEFITS OF BLOCKCHAIN USE IN INSURTECH ARE TO IMPROVE TRANSPARENCY, PREVENT FRAUD, AND SAVE TIME” Paul Sherman

Chief Marketing Officer, Olive.com 

BY THE NUMBERS We asked you: Which insurtech emerging market will lead the pack in 2022?

15% Other

23% Africa

“ WHEN IT COMES TO RECORDING EACH PARTNERSHIP IN WRITING, THE DEVIL REALLY IS IN THE DETAILS” RACHEL HILLIER

Regulatory Lawyer and Financial Services Team Leader, Capital Law  READ MORE

“ TECHNOLOGY SIGNIFICANTLY CHANGES EVERY SIX TO TWELVE MONTHS, SO A KEY STRATEGIC FUNCTION OF BUSINESSES MUST BE REALISING HOW THOSE CHANGES WILL IMPACT WORK PROCESSES AND SOCIETY AT LARGE”

31% Indonesia

31% Latin America

SLUSH FUND Funding for insurtech startups is skyrocketing after a recent report showed the global investments hit US$5.3bn in Q3 2021

China Times THE CHINESE INSURANCE INDUSTRY IS ON TRACK TO BE WORTH $313BN BY 2025 AND HAS A CAGR OF 9.5%

Jean-Marc Boxus Associate Director, BCG Platinion  READ MORE

January 2022

TECHNOLOGY TRENDS According to a report by Capgemini, 67% of UAE-based insurers are keen to collaborate with insurtechs, while 85% want to partner with technology providers

The insurtech industry is developing at warp speed, thanks to new technologies and generous investment in space. The next 12 months will be defined in terms of which processes become adopted as industry standards, following the pandemic year of 2020, and the recovery year of 2021. DISTRIBUTED LEDGER TECHNOLOGY (DLT) Blockchain technology, for example, is responsible for decentralising transactions, increasing security and doing away with intermediaries. This level of innovation has allowed insurtechs to access new markets they wouldn't have been able to otherwise. AI AND ML Yet, the leading example of broader disruption in the insurance sector comes from the rise of artificial intelligence (AI) and machine learning (ML). Combining these developments provides an opportunity to automate not just rote tasks but also cognitive ones such as identifying risk exposures or claims fraud. REMOTE VIDEO CONFERENCING AND DOCUMENT PROCESSING The popularity of remote video conferencing is also a significant change in the insurance business. In fact, such apps have already become mainstream, with far-reaching consequences for customers and employees across sectors. For employees, this has meant a significant reduction in travel time and costs since they can now hold meetings from the comfort of their homes or offices.

 NIMBLA The digital business insurance startup, has collected $6.7mn in its latest funding round

GOOD TIMES BAD TIMES

DISRUPTIVE TRENDS FOR 2022

 BRANCH INSURANCE The US-based insurtech raised $50mn in its recent Series B round from leading participants including Anthemis Group

JAN22  ROOT Root's share price is now down 85% from its IPO. Its market capitalisation is just $1bn, compared to net cash of $764mn

 HIPPO Hippo had 83% of the capital raised by its SPAC being withdrawn prior to its IPO and disappointing reports leading to a dramatic drop in its stock price

insurtechdigital.com

TIMELINE

2003 - 2006 MARCH 22, 2002

APRIL 2003

Gone for a dip

Cash in

The criminal, the secret and the wardrobe

A battered, second hand canoe is washed up along the UK coastline close to Seaton Carew, the location where a man has been reported missing the previous day. A huge search and rescue mission is launched by the coastguard, but the man, identified as John Darwin, a local teacher, is not found.

More than a year later, and there is still no sign of John Darwin’s body. A court reviewing the case declares an open verdict at his inquest, but he is later declared dead, allowing his ‘bereaved’ wife Anne, to claim £250,000 in life insurance money. She later collects a further payment, taking the total to £679,000.

However, unbeknown to even his children, Darwin was far from dead. He was, in fact, safely back in Seaton, living in a bedsit next door to his house, with an adjoining door. For three years, he entered the family home from the bedsit through a secret hole in the wall that was hidden behind a wardrobe with a false back.

January 2022

THE AND THE

CONMAN

CANOE In early 2002, a British man in his early 50s named John Darwin, went canoeing off a beach in Seaton Carew, UK. He mysteriously disappeared and his canoe was washed up the next day. But there was no sign of a body

JULY 2006 Say cheese! Bored of living in hiding and keen to spend his insurance windfall, John and Anne fly from Newcastle to Panama where they are inadvertently photographed by a property agent who is showing them an apartment they’re considering buying. But the picture blows open the scam after it is printed in a national newspaper following Darwin’s secret return to the UK.

DECEMBER 2007 TO MARCH 2008 Gotcha! On December 1, 2007, John Darwin walks into a central London police station claiming to have amnesia and telling police, “I think I’m a missing person”. His two sons are shocked at his return, believing he is dead. By March 2008, Darwin pleaded guilty to seven charges of obtaining cash by deception and a passport offence. Anne Darwin denies nine charges of using criminal property and six charges of deception.

2011 - 2022 Crime doesn’t pay John is jailed for six years for fraud. Anne Darwin is imprisoned for 6.5 years after being found guilty of deception and money laundering. The pair are ordered to pay back a total of £679.073. However, today, much of the money remains unpaid, and the couple are divorced. John Darwin now lives in the Philippines with his second wife, where he runs a t-shirt market stall and claims his UK pension.

insurtechdigital.com

TRAILBLAZER

PATRICK RYAN: Transforming the insurance industry JOB TITLE: CEO COMPANY: AON CORPORATION

merican insurance billionaire, Jack Ryan, currently serves as CEO of the Chicago-based wholesale brokerage and specialty insurer, Ryan Specialty Group. Despite being a leading figure in the US insurance scene for several decades, Ryan’s early life reveals a story of hard work and determination, as well as a good amount of initiative, which helped him reach his goal. The son of an Irish-American father who ran a Ford dealership in suburban Milwaukee, Ryan was no stranger to hard graft. Reports suggest that as soon as he could, he worked to pay his way, spending his high school and college summers shoveling concrete to help build Milwaukee's central freeway system. Later on, his entrepreneurial spirit carried him through the final years of education as anecdotes state that during his senior year, he earned $8,000 (a massive sum at that time) selling personalised scrapbooks to dorm residents. Ryan graduated in 1959 from Northwestern University with a bachelor's degree in finance and literature and immediately found work in the insurance business. He joined Penn Mutual's Chicago office as a life insurance agent, and by 1962, he had founded the first Finance and Insurance (F&I) department at Dick Fencl Chevrolet in suburban Chicago. 16

January 2022

andymiah

insurtechdigital.com

TRAILBLAZER

The department sold insurance products on behalf of Continental Casualty Company – and is now the primary subsidiary of CNA Financial. It was a groundbreaking event for the industry – and Ryan’s actions changed the way auto dealerships operated in terms of insurance products. By 1964, Ryan had branched out on his own and founded Pat Ryan & Associates, a brokerage and underwriting agency. The company ran a training programme that was created to teach licensed agents and place them in auto dealerships. The entity enjoyed huge success – and by 1968, was selling US$15mn premiums annually. Sensing the time was right to expand, Ryan took out a loan to finance the sale of a dormant insurance company. This enabled 18

January 2022

him to underwrite the products his company was selling. Once again, the move proved to be a genius one – and transformed Pat Ryan & Associates into a nationwide business that began operating across the USA. By 1971, with $25mn in annual sales, Ryan made the firm a public entity. The stock offering helped raise capital to meet Ryan's long term goal, which was "diversification from a single line of insurance to multiple insurance products.” A rebranding in 1976 followed the IPO, changing the Number firm's name to Ryan Insurance of years Group. The following year, working he acquired retail brokerage units from Esmark Inc, and in the industry expanded the firm into “risk

management services for commercial and industrial clients". Two years later, James S Kemper agencies were acquired too, further expanding the firm’s purchasing power. More mergers to success By 1982, with Ryan at the helm, it became clear his leadership was a driving force within the industry. Ryan Insurance Group merged with another heavyweight firm, Aon, and the entire entity became known as Aon Corporation. Philanthropy and humanitarian work A keen philanthropist, to date, Ryan has given away more than $600mn to various charities and organisations through a charity that he runs with his wife, Shirley,

£1m

called the Shirley W. Ryan Amount Foundation. In September 2021, donated he donated $480mn to to charity Northwestern University – its largest donation to date. Ryan was the chairman and CEO of the Chicago 2016 Olympic bid committee and is currently chairman of World Sport Chicago, an organisation that was created from Chicago's Olympic bid. A keen supporter of the arts and education, Ryan is also a benefactor of the Art Institute of Chicago Building's modern wing addition and former chairman of the board of trustees at Northwestern University. He and Shirley met in 1961, and have three children. insurtechdigital.com

FIVE MINUTES WITH...

Adrian Rands

Adrian Rands is co-founder and chairman of the data analytics insurtech, Quantemplate. An avid kite surfer with an appetite for the natural world, he tells us what inspires him in insurtech today

Q. WHO WAS YOUR CHILDHOOD HERO AND WHY?

insurance company of all time. Well worth a read.

always more focused on my own hobbies and sports rather than following celebrities or the media. From a professional perspective I must admit my hero is Maurice “Hank” Greenberg, long time CEO of AIG and still the CEO of Starr Insurance at the spritely age of 96! Hank Greenberg, in my opinion, is rather unique in our industry in his ability to build a business like AIG into the leader in both distribution, through establishing a global network of local offices, and simultaneously constructing a fortress-like balance sheet with the lowest cost of capital. Clearly it was a herculean task to build the world's largest insurer and it’s telling that the delicate capital balancing act unraveled so dramatically in 2008, just 3 years after his departure. I suspect Hank's assertive leadership, if he had remained at AIG, would have kept the Financial Products team in check, but who knows. Much has been written about AIG, all with strong opinions. However, my favourite piece was the book “The AIG Story” co-authored by Greenburg. It’s a fascinating account of the 80 year journey of two men (Cornelius Vander Starr and Greenburg) building the greatest

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

» As a child I didn’t really have heroes as I was

January 2022

» The best advice I ever received was

from Steve Garnett, EMEA Chairman at Salesforce at the time and formally a senior sales executive at Oracle who helped grow the business into the 2nd largest software company globally (as it was in 1996 when he left). Steve said “Enterprise sales move at the speed of trust” which is a quote he accredited to Marc Benioff. This is clearly sage advice for any industry, but I believe particularly pertinent to insurers. Most Insurance companies have a policy to minimise and mitigate risk from all areas of operation, except underwriting where it is tightly managed. This is clear from the highly conservative investment strategies adopted by most insurers, so it would be quite unreasonable to expect insurers to carry technology execution risk even if it results in slow adoption to innovative solutions. At Quantemplate we have a rather unique approach to seeking trust, and this is by publicly publishing full details of every

FIVE MINUTES WITH...

aspect of our product, including videos and granular feature demos through our Knowledge Base at Quantemplate. This level of transparency is extremely rare amongst technology vendors to the insurance sector. For us, as our product features and functionality are constantly evolving and improving, the downside of IP leakage is far outweighed by the upside in enhanced customer trust.

Q. WHAT WAS THE LAST BOOK YOU READ - AND HOW LONG AGO DID YOU READ IT?

» 80% of the books I read are biographies

so the last one bucks the trend a little. The book is “Entangled Life” by Merlin Sheldrake which I finished in July this year. Sheldrake is a biologist who beautifully explains how the living world is composed of interrelated organisms living in symbiosis and connected through a vast mycelial network. In many ways I think the 335 year old insurance market mimics this ecosystem where assured's, brokers, agents, carriers, reinsurers and consultants all need to collaborate to deliver effective risk transfer and customer security. The Quantemplate data platform has been designed to operate like a mycelial network for this insurance ecosystem, where data is cleansed, enriched, filtered and communicated between underwriters, actuaries and brokers to assist the market achieve its purpose as efficiently as possible.

Q. N AME ONE PIECE OF TECHNOLOGY YOU COULDN’T LIVE WITHOUT AND TELL US WHY (EXCLUDING YOUR MOBILE PHONE)

» There are numerous dull technologies that are necessities for my day-to-day existence, however my favorite technology, the 10m 22

January 2022

Ltd Edition EPIC Screamer Kitesurfing Kite is arguably not needed to sustain life. I was extremely fortunate to be in the Grenadines in 2013 when the EPIC Kiteboarding CEO and Founder Dimitri Maramenides was on a photoshoot for their 4th generation kit. He let me take the kite for a spin and I could not believe the power, speed and hangtime it delivered. Dimitri is a professional kitesurfer, not an engineer, but his determination to build a kite that had more boost than anything on the market resulted in a piece of exquisite technology that has produced happy times for many, and no doubt a life changing moment for the lucky few.

Q. W HO DO YOU LOOK UP TO IN TERMS OF LEADERSHIP AND MENTORSHIP?

» Shortly after I launched Quantemplate I

was introduced to Ron Carlier (the longtime CEO of RK Carvill & Co) and delighted when he joined my board. As one of the most successful Reinsurance Brokers of his generation, Ron’s guidance and wisdom gave me the confidence to launch in the U.S. early on, and the territory has grown to be the largest market for Quantemplate. We now operate Quantemplate as a collaborative ecosystem with leadership

guidance now coming from our key partnerships and customers. This allows our central role to be exclusively focused on delivering the highest grade of technology and digital support tools to enable this ecosystem to flourish.

systems represents a significant milestone. These connectors enable the seamless flow of real-time data between tightly coupled business processes, resulting in a huge leap in the confidence carriers have in the accuracy of their risk reporting.

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

Q. WHAT INSPIRES YOU IN INSURTECH TODAY?

» Travelling to the tropics. There is

something magical about the flora and fauna in tropical regions where enormous and colourful plants burst out of every forgotten corner and crevice. With a spot of luck I’ll be spending my 40th birthday next year in Mauritius with my family, as there appears to be some light at the end of the Covid tunnel

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

» We are very pleased with our customers'

feedback from the launch of our Connectivity suite in Q1 this year. The path to automation has many steps but the simple integrations for data enrichment and model processing

» The trend I am most excited about in

insurtech is the increased adoption of IoT and enabled devices. It is clear that the benefits to customers of having insurance seamlessly integrated with physical products and for carriers to price risk based on personalised data is a win/win on both sides of the equation. At Quantemplate we see our role as the integration and communication network through which this big data can flow from devices to the finance, actuarial and modelling teams within insurers. Our platform was architected to handle data at this scale and although we expect it to be a few years before IoT becomes ubiquitous we are already seeing data volumes on our network picking up substantially, with billions of rows of exposure data flowing through our pipes every month. insurtechdigital.com

In Association With:

SHAPING THE FUTURE OF SUSTAINABLE BUSINESS

2022

February 23rd-24th STREAMED & IN PERSON TOBACCO DOCK LONDON

BUY TICKETS

SPONSOR OPPORTUNITIES

Confirmed Speakers Include:

Ben Clifford

Sarah Chapman

Global Health, Safety & Sustainability Associate Director

Global Chief Sustainability Officer

Fidelity International

Manulife Financial Corporation

Roy Cheung

Mary-Jane Morifi

Global Head, Sustainability Solutions, Engineering Plastics

Chief Corporate and Sustainability Officer

Covestro

Tiger Brands Limited

Øistein Jensen

Sandeep Chandna

Chief Sustainability Officer

Chief Sustainability Officer Tech Mahindra

Odfjell SE

TRANSFORMING THE LIFE INSURANCE SPACE

WRITTEN BY: JOANNA ENGLAND PRODUCED BY: JAKE MEGEARY 26

January 2022

insurtechdigital.com

LEGAL & GENERAL AMERICA

Mark Holweger, President & CEO of Legal & General America, tells us how the sector is transforming in the wake of COVID-19 and innovative technologies

s one of the largest life insurance companies in the US, Legal & General America has been providing protection for families and businesses for more than 70 years. But the past decade has seen a sea of change taking place that has been driven by increased connectivity and digital transformation. Four years ago, Mark Holweger moved to the US from Legal & General UK to become the President & CEO of Legal & General America. He has been at the forefront of the company’s digital transformation – a move that saw Legal & General America well prepared in terms of both services and operations when the pandemic hit in March 2020. Changes in the life insurance space It is hoped that increased digitisation and regulation changes in the US life insurance sector since the pandemic will make life insurance protection far more readily and easily available to customers. It’s an area that Holweger, who spent many years in the UK life insurance sector, is passionate about. “I think my background gave me an understanding of international businesses. My career started on the P&C side working for various international companies, running really broad spectrum and distribution channels,” he explains. 28

January 2022

Example of an image caption insurtechdigital.com

IF YOUR POST-IT HABIT IS MORE THAN A PACK A DAY YOU MAY HAVE FOMA. We know what it’s like to feel FOMA, or Fear Of Missing Anything. That’s why we’ve created insurance risk assessment tools that provide the most comprehensive picture of your applicants, making it easier than ever to identify risks and opportunities.

Milliman IntelliScript® See more. Fear less.

Video Placeholder 728.504 px * 416.288 px

WELCOMING DISRUPTION WITH A FEARLESS “YES/AND” MINDSET

By contrast, leaders who flourish through disruption have a “yes/and” mindset. They manage to preserve venerable cultures and brands even as

Digital underwriting got a boost from the pan-

they adopt groundbreaking new tech—not for its

demic, but insurtech—the real industry disruptor

own sake but because it generates real ROI.

—made its debut long before COVID-19 forced widespread change. Forward-thinking insurers

Insurers who’ve partnered with IntelliScript over the last 20 years can attest to that ROI.

began implementing Milliman IntelliScript’s data- IntelliScript offers ingenious but pragmatic data driven innovations years ago, but insurtech’s

aggregation and interpretation solutions that

early adopters didn’t just act because they were

modernize workflows, speed up decisions, and cut

afraid of missing out. They were afraid of missing

costs. It’s harnessed AI with its Risk Score predic-

anything—whether it was information that would

tive models and instantly illuminated hidden risks

refine decisions or the opportunity to write more

like tobacco and cancer with Medical Data.

business, trim a loss ratio, and meet changing customer expectations.

Christensen recognized changing business models and expanding markets as two hallmarks

Harvard’s Clayton Christensen popularized the of disruption. We can see those two things term “disruption” in his bestseller, The Innovator’s

happening today, as insurtech powers direct-

Dilemma. He noted that disruptive technologies

to-consumer distribution and makes it possible

rarely took legacy companies by surprise. Rather,

for carriers to profitably extend coverage to the

CEOs underestimated new tech or adopted a wait-

middle market.

and-see attitude—an unduly cautious either/or

As the original industry disruptor, IntelliScript is

mentality that impeded progress. By the time they

ready to help carriers meet whatever comes next.

were ready to move, customer expectations (and

With a “yes/and” mindset—and the right partner—

brand preferences) had moved on.

disruption can be welcomed, not feared.

LEGAL & GENERAL AMERICA

Legal & General America: Transforming the Life Insurance space

“ There is no one size fits all ‘plug and play’ business model solution. Just a couple of variables in a business model means it won't work in another country” MARK HOLWEGER

PRESIDENT & CEO, LEGAL & GENERAL AMERICA

Holweger then moved into running emerging markets – which he says, encompasses basically every country bar the UK and the United States. He learned about international markets. He also set up and co-founded a new international digital direct to consumer broker, which, based in Gibraltar, distributes P&C products in Europe and the UK. 32

January 2022

“These experiences made me realise that there is no one size fits all ‘plug and play’ business model solution. And just a couple of variables in a business model means it won't work in another country either,” he says. Business models in new markets Holweger cites cultural and behavioural differences as the main drivers that prevent certain business models from working in other markets and says that the US life insurance market is fundamentally different to that of the UK as buying policies and getting coverage can be a long and arduous task. Holweger is dedicated to tackling these issues and transforming the space in his position as President & CEO of Legal & General America. “Insurance is about getting people back on track when things go terribly wrong. It’s about enabling them to carry on with their life,” he says, “and that’s what attracted me to it. I think we can make a real difference to society and help families.”

LEGAL & GENERAL AMERICA

Because obtaining life insurance cover in the US is generally a drawn out process, it can also be expensive. As a result, only certain demographics prioritise having cover – and generally, these customers are within high income brackets. This is an aspect that needs to change, Holweger says, because those that fall hardest when tragedy strikes are the vulnerable, low to middle earning families who simply either can’t afford cover, or have chosen not to take it out because it’s difficult to apply for - and it's expensive. “Protection for this section of society needs to be more flexible,” says Holweger. “For me, life insurance is the life jacket, and how much life insurance you want depends if you just want a basic life jacket or you maybe need a safety boat. It's up to you, but it has to offer affordability as well.”

MARK HOLWEGER TITLE: PRESIDENT AND CEO INDUSTRY: INSURANCE LOCATION: MARYLAND, UNITED STATES Mark Holweger is President and CEO of Legal & General America’s insurance division, which includes operating companies Banner Life Insurance Company and William Penn Life Insurance Company of New York. He is responsible for the dayto-day operations of the business, ensuring service excellence, continued distribution expansion and achievement of the digital transformation strategy. In 2011, he joined Legal & General Group in the UK where he held a number of senior level positions including Managing Director, Partnerships for Legal & General Insurance and Director of Broker and Intermediary

Digital transformation Holweger is adamant that digital transformation has provided the tools life insurance providers in the US need to offer better, faster, easier and lower cost cover.

for Legal & General’s General Insurance business. In 2018, Mark relocated to the US as Executive Vice President of Distribution and Marketing for Legal & General America. Prior to joining Legal & General, Mark was a co-founder of Coverwise.com, an International digital insurance broker,

1981

and held various

Year founded

senior roles at other

630+

Insurance Group

According to a

2020

LIMRA Insurance Barometer Study, just

54%

of all Americans have life insurance coverage

EXECUTIVE BIO

Number of employees

insurers including RSA UK where he was Distribution Director for Emerging markets and AXA Insurance UK where he was Director of Corporate Partnerships.

LEGAL & GENERAL AMERICA

“ The reality as well is sometimes missed in all this. As life insurers, we're there to pay claims. And 99% plus of claims are paid whether it's in the UK or the US” MARK HOLWEGER

PRESIDENT & CEO, LEGAL & GENERAL AMERICA

And for his team at Legal & General America, the task of reducing the protection gap can’t happen soon enough. According to a 2020 LIMRA Insurance Barometer Study, just 54% of all Americans have life insurance coverage. The number has declined over the past decade, as in 2010 63% of US citizens had some form of insurance protection. The study also shows there are 60 million uninsured and underinsured households in the US. Holweger says, “Our whole strategy actually, even pre-COVID, was all around digital transformation and making life insurance more accessible. We've already been pioneering and driving the use of data, leveraging new technology and digital platforms to make the purchase of life insurance easier. 34

January 2022

“We've taken a lot of our learnings from the UK. But one of the big differences in the US is the requirement of a medical or the need to often have a medical where you're taking fluids, which happens far less in the UK.” The procedures are triggered by contestability, explains Holweger, who points out that in the UK, a life insurer can check the information was correct at the time of claim. However, in the US, after two years, even if the information you collect about the customer was incorrect at the time - or maybe the customer made a mistake and didn't tell you about a medical condition they had, insurers must still pay a claim. “This is why in the US, the process has been so complex and it takes so long,” he says. “It takes months historically to get offered life insurance cover, and that's

because of all the medical records, asking customers to go to the doctors to have fluids taken to check that the life insurers have all the data.” While life insurers in the US inevitably dislike the two-year rule, Holweger takes a practical approach. “The reality as well is sometimes missed in all this. As life insurers, we're there to pay claims. And 99% plus of claims are paid whether it's in the UK or the US. But like I say, there's that significant difference between the two markets which historically has made life insurance in the US more complex and more expensive to buy.” Changing the culture But it’s not only processes that need to be streamlined. Marketing, distribution and creating products that suit the needs and

budgets of the uninsured, also must be prioritised. Holweger says that over the four years he’s been working in the US market, he has encountered several critical barriers that need to be addressed. “One of the key drivers of the protection gap is the cost of distribution. The need to have medicals, the fact it was taking months to get on cover, the fact that it's expensive; these are all preventing the industry from reaching new markets. Very often, brokers say, ‘I can't afford to talk to middle America and down because I don't make enough money because it takes so long to get on cover.’ There's such a complex process involved. “So, they just talk to the wealthy and sell life insurance to this audience. That is why the gap has developed. Nobody is talking to people in middle America and below about insurtechdigital.com

YOUR DIGITAL PRESENCE, INSURED. Sophisticated web solutions are no longer value-added, they are expected. We can help.

Serving and protecting your customers is your number one priority. Your digital presence is ours. Legal & General America partnered with Progress Siteﬁnity® and Americaneagle.com to advance their digital presence, and transform their customer’s online experience. Learn why they are being recognized as a leader in the ﬁeld. Digital transformation journey Starting in 2017, Legal & General America (LGA) embarked on an enterprise-wide digital transformation journey. Very early in this journey, it was clear that the leading component for the company’s digital

implementation provided by Americaneagle.com and Progress Siteﬁnity®, the website will continue to empower a ﬂourishing digital transformation for LGA. The redeveloped website and digital marketing strategies have shown great results.

transformation success would be the online brand experience of customers and advisors. Beginning with the LGA website, the brand had to consistently deliver

34%

27%

Increase in Search Engine Keyword Success

Increase YOY in Sales Conversion Rates

an online experience that engaged, converted, supported, and retained customers. The customers needed to feel protected that their security was paramount. At the same time, the website had to serve advisors, equipping them with the right assets to promote day-to-day success.

. Visitor-ﬁrst experience while growing reach Progress Siteﬁnity® and Americaneagle.com, a global digital agency, were selected to add their extensive digital solutions experience and capabilities to execute LGA’s digital transformation plan. The combined

Every day we ﬁnd a new tool, or we have a new set of data we

efforts of the IT team, marketing team, and these two

want to integrate. Every time we

partners led to the implementation of a new Siteﬁnity

want to do a new integration, it’s

website. The Siteﬁnity platform has provided the

so easy to do it. Siteﬁnity takes

scalability, integration, agility, and operability that LGA

all the headaches away that we

desired.

used to have.

Within the website are two rebranded experiences one for customers and the other for advisors, now tailoring content to the appropriate audience. Both customers and advisors have expressed conﬁdence

Megan Morris, Brand & Experience Manager, Legal & General America

and satisfaction in using the new website. This sophistication is just one small sample of the customized strategies now in place to drive increased reach, conversions, and revenue. As a result of the

Read the Full Story

“ Nobody is talking to people in middle America and below about the benefits of life insurance. That's what we have to change” MARK HOLWEGER

PRESIDENT & CEO, LEGAL & GENERAL AMERICA

January 2022

LEGAL & GENERAL AMERICA

the benefits of life insurance. That's what we have to change. We have to make it easy and accessible for all families in America.” Another barrier to market entry is the fact that life insurance isn’t something that protects the obvious, as other types of cover do. And getting the message across that having life insurance can be – well, lifesaving in the event of a crisis – isn’t an easy task. “People don't wake up in the morning and think, ‘You know what, I'm going to go and buy some life insurance.’ They might think about a house and a car because it's a tangible asset, but not with life insurance,” says Holweger, who believes that getting the message across to that market segment is all about good communication and better accessibility. Digitisation is also an essential ingredient. “When you explain to somebody what life insurance does and actually how affordable it is, because basic term insurance is not expensive, they say, ‘Well, why wouldn't anybody buy that?’ But somebody has to explain to them, and that's not happening in the United States because the cost of distribution was just too high. “That's why digitising and making it easier and simpler is going to transform the market, '' he says. “It will make life insurance more accessible for more people, but most importantly it'll mean that they can become educated. And you have to explain to the customer exactly what life insurance does.” A rapidly changing market Despite the fact that the pandemic has placed many global industries under unprecedented strain, the US life insurance sector has actually been driven forward over the past two years. Holweger says that not only has it placed mortality at the forefront of people’s minds, but it's resulted in insurance companies becoming more agile, insurtechdigital.com

Add Speed, Ease and Clarity Achieve a clear, robust picture of an applicant’s health history with ExamOne’s powerful, unique data solutions LabPiQture™ and ScriptCheck®. Learn More > TWITTER

January 2022

FACEBOOK

YOUTUBE

åINSTAGRAM

LEGAL & GENERAL AMERICA

“ By putting low code into our business we can have our people able to adapt the journeys and build the journeys as well” MARK HOLWEGER

PRESIDENT & CEO, LEGAL & GENERAL AMERICA

innovative and embracing new technologies. Legal & General America has also started to offer cover that suits the marketplace better, in that it is easier to apply for – and more cost effective. “We've absolutely seen more interest in our products since the beginning of the pandemic – and that’s mainly because COVID has made American families think about the ‘what ifs’. However, the increased interest has also been a result of the product which we offer. It’s fairly straightforward. It isn’t complex. The policy is backed by an upstanding, financially stable company.” Holweger says that change was forced to happen during the pandemic because

providers could not expect their customers to go to clinics to have medical examinations that would enable policies. The event essentially acted as a catalyst for the insurance industry in the US to leap forward and innovate via the use of data, thus transforming the space for providers and customers alike. “It's really made life insurers realise we have to change how we operate. Legal & General America were already going down that route. But it accelerated the process. We’re using data analytics and AI, to reduce the number of questions we have to ask and we can use data to get instant decisions. Currently in the US we're over 25% in terms insurtechdigital.com

LEGAL & GENERAL AMERICA

of instant decision, and we're on our way to targeting 50%. This is transformational for the US market because it enables customers to achieve instant cover.” Holweger says Legal & General America is focusing heavily on its digital platform, which works on agile principles, carrying out sprint releases every two weeks as part of the company’s strategy to allow for great flexibility and constant development. This ensures the platform stays up to date with the changing market trends. The underwriting process has also been reinvigorated through robotic process automation (RPA) to create better efficiency. This has enabled Legal & General America to keep their pricing competitive and therefore 42

January 2022

more accessible to customers. Low code is another aspect that has been transformational. “We don't have to have complex programmers doing all the work. By putting low code into our business we can have our people able to adapt the journeys and build the journeys as well. So we're leveraging lots of things at Legal & General America,” he says. Future-proof strategies Clearly, Legal & General America is leading the way as life insurance in the US transforms, and Holweger says the journey is an exciting one, which will be dominated by new distribution channels, data driven processes, clearer and more customer friendly products and services as well as better cost value products.

“New companies will realise that because everything is digital, it can all be done via mobile on apps, customers can go instantly on cover. It means that we'll get new distribution channels coming into the market to talk to families about the importance of life insurance.” More industry mergers But alongside this shift, companies and the ecosystem will see dramatic changes. Holweger says that traditional providers will have to change if they want to survive, and this will result in two outcomes. Some will embrace the new technologies. Others will decide that the new market requirements are not for them.

“There will almost certainly be a rise in M&A as company owners sell up to other businesses. Equally, we will see a rise in partnerships as traditional companies collaborate with insurtechs to diversify their offerings and find more technology appropriate solutions to legacy processes,” he says. The future, it seems, is a positive place to be, because reinvention is revitalising the industry. He adds, “One thing about brokers, they adapt because they are smart people, and these changes we’re seeing are really exciting.”

insurtechdigital.com

INSURANCE

ACCEPTABLE RISK: TECHNOLOGY INNOVATION IN UNDERWRITING We asked experts how risk management and new technologies are transforming insurance underwriting and risk assessment for customers WRITTEN BY: JOANNA ENGLAND

January 2022

ack in the good old days of incumbent monopoly, insurance underwriters were a revered breed. Their knowledge of specific industries like marine, agriculture and health, meant their calculations regarding potential risk, were the difference between claims being paid or not. Today, technology is transforming the space. Artificial intelligence (AI) robotic innovations and satellite observation recording imagery and mapping potential risk in real time as a situation unfolds. And finally, it is the customer who is reaping the benefits.

Earth observation and climate risk When the Ever Given tanker banked itself in the Suez Canal in 2021, it wasn't the images sent by those on the ground that resulted in accurate disaster forecasting. Satellite images beamed from a specially designed platform in real time, were the most valuable assets insurers had on creating crisis and claims predictions. The same technology was used in the tragic harbour explosion in Beirut - and more recently, for the volcanic event on the Island of Palma. insurtechdigital.com

Experience composable banking with Mambu's SaaS cloud banking platform.

Learn more

INSURANCE

“ I WOULD DEFINITELY PREDICT THE GROWTH OF THIS PREVENTIVE OR PREDICTIVE COVERAGE BEING INTRODUCED AS A SERVICE BY INSURERS” GUY ATTAR GEOX

Guy Attar, Chief Business Officer and Co-Founder at GeoX says Earth Observation is being used in a variety of ways to calculate risk in terms of crisis insurance and agricultural insurance. He explains, “The value earth observation can add to an insurer’s offering really cannot be overstated

in today’s turbulent world of evolving risks. Think about this year so far alone: in the US, there have already been 18 weather or climate-related disaster events with losses exceeding $1bn each. Attar says these catastrophes result in countless claims, in what was traditionally a slow and frustrating process. Assessing extreme damage in person is difficult and often dangerous, and that was before the COVID-19 pandemic stunted physical assessments in a new way. “Technology enabling earth observation, such as modern sensors (cameras) and AI analytics of images, is truly the way forward in calculating risk: not only during moments of crisis but also before they occur.” Attar says that suddenly triggered disasters are now too unpredictable and frequent for traditional, retroactive action insurtechdigital.com

INSURANCE

Precisely – Trust in Data

“ AS THE CLIMATE CRISIS WORSENS, MAJOR WEATHER RELATED EVENTS ACCOUNT FOR BILLIONS OF DOLLARS’ WORTH OF CLAIMS EVERY YEAR” PATRICK MOTTRAM PRECISELY

taken by companies, and customers would greatly benefit from knowledge of potential risks ahead of time. He uses the example of up-to-date, 3D imaging of a property where insurers could warn customers of possible risks in advance. 48

January 2022

This, he points out, would allow the customer to avoid the risk, or at least prepare for and mitigate the damage the risk could cause. “I would definitely predict the growth of this preventive or predictive coverage being introduced as a service by insurers. Although it would require high investment by the insurer to avoid damages, such investment pays out in the long term as insurers eventually avoid paying out large amounts of money for losses when risks are realised.” Robots and drone technology Aside from satellites, insurance companies are also investing in the latest robotics and drone technology to provide data that was previously unavailable. Use cases for drones particularly, expand almost daily. They are used to collect data on agriculture, buildings, property boundary inspections and reactor buildings in nuclear power stations.

Equally, recently, Farmers Insurance partnered with Boston Dynamics to use the company’s robot dog to venture into areas considered unsafe for human beings. The device is armed with 350 degree cameras that capture imagery and vital data. Attar believes that so far, the industry has only explored the tip of the iceberg in terms of just how much technology can enhance the underwriting process. “Drone footage is an important way to gather information about properties, and these technologies are growing more agile and intelligent all the time. After a disaster has happened, assessors from public bodies or private firms shouldn't have to risk their safety to assess a property’s damage when technology is available to remotely (and more accurately) evaluate the property for claims purposes.” However, ironing out practical issues will further extend the use cases. Attar says drone technology will have to improve in its ability to capture imagery of large areas, adding longer battery life and improved flight safety, especially over populated cities, so flight regulation in the future will allow long flight plans without eyesight from pilots. “Currently the main aerial capturing method for covering complete metropolitans and cities is by using manned aircrafts or satellites, while drones are used for small and on-demand aerial coverage due to their limitations. This is why the majority of imagery used by GeoX is aerial imagery captured by fixed-wing aircrafts, which fly in low altitudes and provide high resolution images with wide geographical coverage.” Risk assessment in emerging markets In areas where technology is not fully embedded, the difficulty in assessing insurance risk is amplified. Companies face

CASE STUDY FROM GeoX The COVID-19 pandemic brought to light a severe need for remote technology in the risk assessment space. For example, after the 2020 Mississippi Easter Sunday earthquake, disaster management teams could not safely access sites to assess the damage while adhering to the critical social distancing measures in place at the time. GeoX worked with FEMA in this period, using AI analytics to facilitate fast damage detection from aerial imagery. This enabled the quick allocation of resources for disaster management teams, re-building projects, and claims organisations. Putting this into the context of COVID-19, aerial imagery collection and a remotely operated AI product was really the only safe way to go about this kind of management, something FEMA recognised.

insurtechdigital.com

INSURANCE

numerous challenges in accessing vital data - but new innovations look set to change all that too. Patrick Mottram, senior director of risk, analytics and insurance at Precisely, explains, “As the climate crisis worsens, major weather related events account for billions of dollars’ worth of claims every year. By assessing historical weather patterns and their subsequent damage, insurance companies can predict the likelihood of impending weather events with a high level of accuracy.” This enriched data, he says, can in turn help insurers understand the relative damage caused by weather-related events such as tornadoes, floods, hailstorms and other severe events in specific areas. “For example, in 2017 California had one of the worst years on record for wildfires and the damaging effects were extensive. Following the event, we sampled 100 properties, which resulted in over $100mn worth of claims. Based on our analysis, merely 3% of those properties had previously been identified as being at high risk from wildfires. In reality, between half and threequarters of those properties would have been identified as high risk if the insurer had used accurate location data.” The future of risk assessment In such a fast-paced environment, change occurs almost daily. The insurance industry hasn’t always been open to change though, and is often considered a slow mover when it comes to adopting new systems and technologies. Attar says times are swiftly changing and only those open to innovation will succeed. “The insurance industry, particularly the property and casualty sector, has been slow to innovate when it comes to new technology.” 50

January 2022

He continues, “Companies still rely on paper-based methods, slow-moving systems and inefficient assessment methods, and this holds up what could be a much smoother process for both the insurer and their client. But if insurers think outside the box, embracing opportunities to use AI and earth observation tech, they save themselves time and money.”

“ BY IMPROVING DATA INTEGRITY, COMPANIES CAN INCREASE PROFITABILITY” PATRICK MOTTRAM PRECISELY

INSURANCE

Ultimately, it's about embracing the opportunities that seem to present themselves daily. Insurers who are cornering new sections of the market today are those who effectively use data technologies for risk management, says Attar. A technological future Mottram agrees. He says data is the lifeblood of the insurance industry, as as better ways of gathering it present themselves, companies must keep up. “By improving data

integrity, companies can increase profitability by, not only improving the accuracy and consistency of data, but also adding context to the data used by the business for strategic decision making.” He adds, “By focusing on the four pillars of data integrity – data integration, data quality, location intelligence, and data enrichment, insurance companies can optimise the capabilities of data in their risk assessments.”

insurtechdigital.com

GENERALI VITALITY

January 2022

GENERALI VITALITY

Incentivising Health and Wellness WRITTEN BY: JOANNA ENGLAND PRODUCED BY: JAKE MEGEARY

insurtechdigital.com

GENERALI VITALITY

January 2022

GENERALI VITALITY

Peter Stockhammer, MD of Generali Vitality, talks us through the company’s new wellness initiative that uses data and digital technology to improve customer health

G G

enerali Vitality GmbH launched six years ago as a new digital arm of the European insurance company giant, Generali Group. Its purpose has been to develop and roll out a new wellness programme throughout continental Europe. Peter Stockhammer, Managing Director of Generali Vitality, has enjoyed a long career in the Life insurance space and is a passionate advocate of advancement and innovation within the sector. He says that to truly drive forward new strategies, operatives need to understand how to liaise with each other and provide suitable support. Originally, Stockhammer ended up in the life segment by chance following a new career opportunity. But the shift in perspective is one he’s embraced. He explains, “What attracts me now about the sector is the challenges it presents. We're living in a fast-moving world, and despite that, life and health insurance contracts have very long durations. So, it means you have to make a decision based on risk factors over long, long periods. For example, say someone is buying a retirement plan in his early 30s. His contract runs for 35 to 40 years, and the health proposition runs alongside the main customers for the rest of their life.” insurtechdigital.com

GENERALI VITALITY

Generali Vitality and digital transformation The life and health insurance industry is undergoing seismic changes as digitisation transforms the global business market. The new technologies that have emerged over the past decade have made it possible for established, traditional companies with core legacy systems, to consider new modes of operation. Generali Vitality is a transformative subsidiary of a 190-year-old industry heavyweight, which made the decision to revamp its core services and offerings to fit in with the changing industry, back in 2015. Today, it is positioning itself as one of the most progressive operatives in the 56

January 2022

“ The priority for Generali Vitality is that customers must have full control over their data. Privacy and security is critical” PETER STOCKHAMMER MANAGING DIRECTOR, GENERALI VITALITY

GENERALI VITALITY

PETER STOCKHAMMER TITLE: MANAGING DIRECTOR LOCATION: BAVARIA, GERMANY

marketplace. Considering Generali Group’s reputation and global customer base, it has become a force to be reckoned with. The concept of incentivising wellness via the Vitality initiative, was first established in 1997 by the Discovery Group in South Africa. It is the world’s largest, scientifically proven wellness programme and has expanded its global operations to countries all over the world with over 10 million members. Generali Vitality combines actuarial, behavioural and clinical tools in a stepby-step programme that helps members improve their health through wellness activities and healthy lifestyle choices. Members receive rewards for getting

EXECUTIVE BIO

Peter has been managing director of Generali Vitality GmbH since 2015 and is based in Munich. He has held executive positions in many international insurance companies throughout his career and has worked in the insurance industry for 30 years. Prior to that, he had been CEO Life of Zurich VersicherungsAktiengesellschaft in Austria since 2007. Prior to 2007, Peter held several management functions at the UNIQA Group and its predecessor companies.

GENERALI VITALITY

Generali Vitality: Incentivising health and wellness

“ What attracts me now about the sector is the challenges it presents. We're living in a fastmoving world, and despite that, life and health insurance contracts have very long durations” PETER STOCKHAMMER MANAGING DIRECTOR, GENERALI VITALITY

January 2022

healthier, and this has a positive impact on the mortality and morbidity experience in the insurance business and in society. Stockhammer explains how the relationship between a wellness app and one of the world’s oldest insurance companies was forged. He says, “It started with a journey six years ago. Generali was founded in Trieste, Italy, and is celebrating this year its 190th birthday so we are nearly 200 years old.” “In terms of digitalisation and innovation, you have to bear in mind when the company was set up. It was in a time when cars didn’t even exist. So our challenge was rooted in trying to move a 184-year old insurer into the digital era.” Stockhammer and his team were tasked with creating a legal entity and startup within the global group to bring a digital, app-driven

GENERALI VITALITY

product to its customers. They then decided to add prevention as an additional service to the protection cover they were offering. Digital differentiators Today, as well as offering comprehensive and intelligent life insurance solutions, Generali Vitality provides holistic, preventative incentives that are centered on customer wellness. As part of this drive, the company can access data directly from mobile fitness apps and trackers to assess customer health and offer incentives and rewards based on their proactive responses. Stockhammer says the team drew on their experiences in the insurance space, as well as bringing in new talents from the technology industry to work on aspects like customer experience and journeys. The combination of a global customer base

alongside an innovative entity, is, he says, an exciting and dynamic opportunity. “We have this startup mentality in an international environment. When we launched the team six years ago, there were around 25 of us from 14 different nations. That meant we had a very international outlook and it helped us in terms of trialing products for different cultures as well as collaborating with new partners. It’s also helped us engage with our internal and external stakeholders.” Wearables for wellness Generali Vitality, says Stockhammer, is specialising in wellness motivation. The focus of the company is to create products that encourage customers to live healthier lifestyles. If they embrace the concept, they are rewarded with points that can be redeemed in a number of different ways. insurtechdigital.com

Local software engineering capabilities for agile delivery make the difference Accenture’s local software engineering capabilities in combination with global development-teams create unique value for clients like Generali Vitality seeking to accelerate their digital agenda – and bring their new digital capabilities to market with unprecedented speed.

Accenture: Transforming services through technology Nils Müller-Sheffer is a managing director for Accenture. He tells us why Accenture’s German software engineering business is at the heart of change for customer needs As digital services explode globally, customers are demanding more streamlined and flexible services from providers. Accenture, one of the world’s leading professional services companies, has a reputation for stand-out innovations, responding to client needs and adapting and transforming to market requirements. Müller-Sheffer points out, “that as society consumes more services digitally, and mobile adoption increases, companies are increasingly turning to partnerships to help them expand on their digital offerings. We’re positioned uniquely covering from strategy consulting and technology implementation work, down to operations of solutions, later on. We’re covering the whole value spectrum. And I think that’s differentiating for Accenture in the marketplace.” Marketplace changes for Accenture “The greatest challenge is finding the right talent to help on our engineering projects.” Says Müller-Sheffer. “Accenture is often seen as the consultancy, as though only

people with suits go and work there, but there is a whole different side to Accenture. We have a very sizable cloud and software engineering practice. I’m responsible for a team of roughly 1500 people in Germany, Austria and Switzerland that work across the whole value chain of software engineering. And we are looking for many more talented and driven software engineers.” Müller-Sheffer says, “Our mission is to help our clients change their business and adapt to their customers’ need. This comes down to a digital transformation story, oftentimes also involving cloud-based technologies.” He adds, “Speaking of cloud, traditionally you needed sizable operations teams to take care of the solution once in production. But, the challenge is often not only to create an application initially, but also to then operate and maintain it later on.” Müller-Sheffer concludes: “With cloud, you get a lot of that essentially for free or at least baked into the overall cloud offering. And that’s a huge differentiator for Generali Vitality and many of our clients.”

Learn more

GENERALI VITALITY

January 2022

GENERALI VITALITY

The app provides hints, tips, and notifications that alert customers about better living and work on changing negative behaviors. “We want to give them a nudge in a healthy direction,” says Stockhammer, “and this is obviously quite a different offering provided by traditional life insurance policies.” Every Generali Vitality customer downloads the app and is permanently using it to upload data on their health status. This can be done using wearables, and when uploads of workouts are carried out, rewards are offered. The company also has a strict data consent policy so that no information is recorded without the express permission of its users. The app is adaptable to a range of IoT devices and can be plugged into the vast majority of existing hardware. Stockhammer says popular options with customers are Apple watches, Garmin, Polar, and Fitbit. Generali Vitality’s team is also keeping a close eye on the market so that the company can innovate its products to keep up with the latest health monitoring options. Currently, they are working on ways to measure customer blood pressure, oxygen and glucose levels as well as heart rate for an indicator of wellness. When customers first log into the app, they receive an initial health assessment and then are provided with a ‘Vitality age’ which, says Stockhammer, is usually quite a bit higher than their actual age. With the wellness incentives, they can reduce their Vitality age and bring it further in line with biology, as well as lowering their premiums, he explains.

“ When we launched the team six years ago, there were around 25 of us from 14 different nations. That meant we had a very international outlook” PETER STOCKHAMMER MANAGING DIRECTOR, GENERALI VITALITY

Managing the data Naturally, with so much data being used to assess customer wellness, management and privacy is a key area of focus. insurtechdigital.com

GENERALI VITALITY

Stockhammer says the insurance industry has always dealt with vast amounts of data, even from its inception. “When you are a health insurer, you're getting a lot of data, meaning by someone signing up. Customers have to fill out a medical questionnaire sometimes based on their insurance, while others carry out a medical check. “Today, it’s even more pronounced. Think about yourself, what you're really doing on your smartphone through social media - and how much data you're offering up. The priority for Generali Vitality is that customers must have full control over their data. Privacy and security is critical.” Technology partners Managing the technology for such an operation has, says Stockhammer, resulted in Generali Vitality working with a large ecosystem of partners, all of which bring value to the operation in different ways. From data analytics and insights to the gamification of wellness - and the incentives offered, the digital insurer has teamed up with several big industry names, from Apple Watch and adidas to Expedia and Amazon. Accenture has also played a vital, supporting role through its range of products and services. The Generali Vitality brand has scaled quickly as a result of its innovative products and services. Stockhammer explains that entering new markets as well as adding new services to the proposition is a top priority. While there is already an established presence in Germany, Austria, and France, the company also rolled out its services in Spain and Italy in October. In 2022, Eastern Europe will be targeted, with services first launching in the Czech Republic, and then Poland. 64

January 2022

GENERALI VITALITY

insurtechdigital.com

GENERALI VITALITY

“ Our challenge was rooted in trying to move a 184-yearold insurer into the digital era” PETER STOCKHAMMER MANAGING DIRECTOR, GENERALI VITALITY

The future of Life insurance In terms of the future, Stockhammer believes that more and more traditional insurers will adopt mobile technologies to stay relevant within the space. The Life insurance industry will also undergo radical changes, not only because of new technologies but because of changing health demographics. Generali Vitality is aiming to develop lifelong relationships with its customers, 66

January 2022

and although long-term contracts will, in the main, remain, the nature of cover will change to reflect the needs of the customer. “People are living longer,” he says simply. “Each person on this planet (especially those born this year in Western Europe), will, in all likelihood, live until they are over 100. But our main objective has to be; "If you're getting 100 years old, how many of those 100 years will you live healthily? While people are living

GENERALI VITALITY

longer in the West, we are also seeing trending health problems like obesity, poor nutrition, and the general negative impact this has. If we can reduce this by incentivizing our products to help people, it’s a great motivator.” And mobile technology is the critical vessel, through which, people can be encouraged, and helped, he says. “Smartphones have changed the world, and I, for one, am curious to see what will be the next.”

He adds, “Already, stats show us that there are more mobile phones on this planet than there are people. That’s an incredible reality if you can help by reaching out to people and helping them to achieve a better lifestyle.”

insurtechdigital.com

THE FUTURE OF INSURANCE: EXAMPLES OF BLOCKCHAIN USE CASES

January 2022

DIGITAL TRANSFORMATION

The insurance industry has traditionally been slow to adopt new technologies, but it's finally happening with distributed ledger technology WRITTEN BY: DERIN CAG

nsurtech companies are disrupting the traditional model to provide innovative services and offer customers better protection for less money. One of these disruptive technologies is blockchain, which companies like Etherisc and B3i are using to bring transparency, efficiency, and trust to the insurance sector. As one of the newest trends in the field of insurance, blockchain offers many benefits to both consumers and insurers. While some startups are using blockchain to protect against real-world risks, others such as Lloyd's of London are using it to protect crypto assets. Overall, blockchain insurance companies have the same aim; to decrease costs for claims processing, improve customer experience by making information more accessible, and increase transparency between all parties involved. In this feature, we look at a handful of ways in which blockchain is being used and trialled in the insurance industry. Transparency and fraud prevention An advantage of using blockchain is its ability to provide financial records without having access directly from them. In this way, law enforcement agencies could see critical information relating back many years, all the way to the first purchase of policies. Hence, insurtechdigital.com

COMING SOON FO LLOW NOW

ED U CAT E • M OTIVATE • E L E VATE

DIGITAL TRANSFORMATION

“ THE MAIN BENEFITS OF BLOCKCHAIN USE IN INSURTECH ARE TO IMPROVE TRANSPARENCY, PREVENT FRAUD, AND SAVE TIME” PAUL SHERMAN

CHIEF MARKETING OFFICER AT OLIVE.COM

blockchain leaves no room for corruption. It also provides customers with a great deal of fairness because insurance companies will be unable to conceal their earnings. On this topic, Paul Sherman, Chief Marketing Officer at Olive.com, said, "The main benefits of blockchain use in insurtech are to improve transparency, prevent fraud, and save time. Blockchain technology makes claims processes three times faster and five times cheaper, thus decreasing the likelihood of fraud. This results in huge societal benefits given that the FBI reports that the cost of insurance fraud in the US is over $40bn per year." Blockchain could also help with compliance audits by making sure everyone involved complies with insurtechdigital.com

DIGITAL TRANSFORMATION

government regulators. In turn, it reduces costs, decreases turnaround time and requires less human intervention. Tiago Henriques, Director of Engineering for Security, Coalition, said, "As a technology, blockchain is relatively new, and what we’ve observed is that the infosec community is still gaining knowledge with this technology and building both tooling for defence and attack techniques." When companies can keep better track of financial records, it is harder to commit fraud since any changes made after initial processing cannot go unnoticed. In addition, some companies see value in sharing specific data with their customers as a way to increase trust between both parties. The biggest challenge is around regulating such data. Automatic claims and data processing The insurance industry could save billions of dollars by cutting out administrative costs through automation. Furthermore, the user experience would be more convenient for customers since they would not need to file claims or deal with long calls waiting on hold with bad quality background music. According to Anthony Martin, CEO and Founder of Choice Mutual, "Blockchain tech can automate filing for the insured’s death claim. Smart contracts enable life insurance companies to automatically receive information and verify the insured’s death when a hospital uses blockchainbased systems. Therefore, beneficiaries can grieve without extra worry." He also thinks blockchain can provide a quicker option in situations where weeks or months are a long time for beneficiaries without emergency money to wait for payouts. 72

January 2022

“ THE VALUE A BLOCKCHAIN PLATFORM COULD BRING AND THE INTRODUCTION OF CRYPTO-FUNDED INSURANCE POLICIES WOULD BE QUITE THE GAME-CHANGER” SAMANTHA CHOW AT EIS GROUP

Some experts, such as Christoph Mussenbrock, the Co-Founder at Etherisc, believe insurance will eventually become fully automated by connecting to the internet of things (IoT) and artificial intelligence (AI) to handle all aspects of insurance alone. He said, "People will not even need to remember they filed an application with an insurance company." As a starting point, Sidharth Sogani, CEO of Crebaco, suggests it could be used for the "tracking of luggage via IoT tags to ensure end to end accountability of luggage and prevent claims due to lost luggage."

DIGITAL TRANSFORMATION

The future is yet to come Insurtech companies are disrupting traditional insurance models by taking advantage of modern technology, and one of these is blockchain. Not only can blockchain help decrease costs for insurers when issuing policies, but it can also increase transparency between all parties involved. Mussenbrock's vision, for example, is to have "no humans involved in processing or proving a claim, so they are super fast and proven in real-time." In fact, his company Etherisc is already using machines to directly

monitor flights and payout any necessary claims based on cancellations and delays without human intervention. Juan Mazzini, Senior Analyst at Celent, thinks differently, stating, “Distributed Ledger Technology’s (DLT’s) initial hype has led to a clearer understanding of its real potential and shortcomings. For now, its promise to revolutionise insurance has fallen short. While insurance processes have many features that could benefit from a shared ledger approach, most of its value is realised when multiple parties are involved and need insurtechdigital.com

simultaneous access to a single dataset with reliability and traceability.” Other experts think there’s still some time before blockchain can be fully relied upon. Briana Marbury, Executive Director at the Interledger Foundation, said, “Blockchain is not a well-established technology that has been around long enough to have accompanying frameworks to address a multitude of use cases and has recently been heavily scrutinised by the government as they explore ways to regulate even the most well-known uses 74

January 2022

of the technology. This means the current reporting requirements imposed on blockchains don't necessarily align with the privacy and protection requirements of the insurance industry and will therefore have to be created. We all know the rate at which this happens can sometimes be described as sluggish at best, especially in a heavily regulated industry such as insurance.” Integrating such a sophisticated technology will not happen anytime soon, nor without cloud-native, API-based solutions or third-party providers. There are

DIGITAL TRANSFORMATION

“THE CURRENT REPORTING REQUIREMENTS IMPOSED ON BLOCKCHAINS DON'T NECESSARILY ALIGN WITH THE PRIVACY AND PROTECTION REQUIREMENTS OF THE INSURANCE INDUSTRY” BRIANA MARBURY

EXECUTIVE DIRECTOR AT THE INTERLEDGER FOUNDATION

many years before widespread usage occurs in this particular sector. Samantha Chow at EIS Group thinks, “The future of blockchain in insurance is inevitable, but still way out of reach. The use of blockchain would require a complete greenfield approach for an insurance provider and a willingness to take a bit of risk, something many insurers are not keen on. It would take a strong frontrunner to take the lead. However, the value

a blockchain platform could bring and the introduction of crypto-funded insurance policies would be quite the game-changer.” Still, innovators are paving the path forward by developing solutions to automate traditional processes and increase transparency. And maybe someday in the future, people will not need to file claims because smart contracts will automatically do everything. insurtechdigital.com

Ethical

CAR INSURANCE for the

community

WRITTEN BY: JOHN O'HANLON PRODUCED BY: JAKE MEGEARY

January 2022

CURE AUTO INSURANCE

insurtechdigital.com

CURE AUTO INSURANCE

CURE CIO, Douglas Benalan, discusses the commitment to providing affordable car insurance using cutting edge technologies to serve its customers

eadquartered in Princeton, New Jersey, CURE auto insurance is a not-for-profit insurer founded in 1990 by former New Jersey Insurance Commissioner James J. Sheeran and awardwinning insurance expert Lena Chang, Ph.D. Originally heralded as the “cure” for the auto insurance crisis in New Jersey, the CURE business model is different in many ways. The insurer prioritises how a person drives versus their socio-economic status. This unique approach is shaped by the philosophies of its founders and current leadership. The risk assessment model of most car insurers takes into consideration a host of different factors. Among the typical factors include driving history and driving record, but there can be others, such as education, occupation, credit score, and home ownership. Sadly, and unknown to to most drivers, is that most car insurance companies often charge more to drivers who are more likely to have lower incomes than those that are wealthier, regardless of their driving record. Is this fair? Even those who may know very little about car insurance would say no. CURE agrees, and with the help of its 200+ employees, has insured hundreds of thousands of drivers in New Jersey, Pennsylvania, and now Michigan as of 2021, without taking these socio-economic factors into account.

January 2022

Example of an image caption insurtechdigital.com

CURE AUTO INSURANCE

CURE Insurance on its ethical auto insurance policy

“ Under my leadership, our IT team successfully achieved 70% of the planned projects within a few months, with the remaining 30% scheduled for completion before year end” DOUGLAS BENALAN

CIO, CURE AUTO INSURANCE

Solutions for an unprecedented challenge In direct response to New Jersey’s comprehensive PIP reform, CURE has become an unrelenting proponent of offering fair rates, based on driving record, and not socio-economic factors. “CURE has a responsibility to the community and, since 1990, we have continued to offer affordable car insurance to responsible drivers,” affirms 80

January 2022

Doug Benalan, who joined the company as CIO in 2020. “We base our rates on how well a customer drives, not their education, job or credit history.” With more than 20 years of experience in IT leadership and digital transformation and having worked for major insurance and financial service businesses, such as Insurance Service Office (ISO), UBS

DOUGLAS BENALAN TITLE: CIO INDUSTRY: INSURANCE LOCATION: USA

Financials, Chubb and NJM Insurance, Benalan’s goal is to put his expertise to work at CURE. Yet despite his initial plans of upgrading IT and driving the transformation, when he first joined CURE there were more immediate challenges to face: “As a traditional work environment, almost all our employees worked in the office before the pandemic. The Covid crisis required our IT

EXECUTIVE BIO

Doug Benalan is the Chief Information Officer of Cure Auto Insurance responsible for building efficiency for business operations through automation and innovation. As a technology executive and visionary thought leader, he is recognised for bringing cost-effective solutions and speedto-market tools for enterprise-wide technology solutions. Doug has 20+ years in the Information Technology, during which time he has architected and managed complex, multimilliondollar transformation projects to drive competitive advantage and return on investments for various insurance and financial organisations.

January 2022

CURE AUTO INSURANCE

“ In my eyes, being transparent, building trust, appreciating good work and making employees key players is what will transform a good organisation into a great one” DOUGLAS BENALAN

CIO, CURE AUTO INSURANCE

team to develop a cost-effective and secure remote solution so that all employees could work from home without any business disruption. Timing was critical.” Despite the life-changing nature of Covid, the pandemic provided opportunities, it catalysed cloud-based solutions and stimulated the IT team into resilient and flexible working patterns. “IT has taken centre stage for some time and the pandemic only catapulted it further. Almost every aspect of the organisation – from sales to operations – now relies on digital processes. As CIO, I had to make quick decisions, balancing strategic and tactical growth opportunities. But it wasn’t me alone. I have to applaud the way my IT team handled the pandemic with a creative approach, always supporting both internal and external customers.” As in many businesses, it made people acutely aware of the value of a trusted and dependable technical team!

The Guidewire implementation CURE and CIO, Doug Benalan, have a clear goal for its digital transformation – one that delivers customer-centric, omnichannel, cost savings with easy-to-use tools which provide measurable business value and ultimately customer satisfaction as a test of its success. The first and most important driver for this transformation was the imminent expansion of CURE into Michigan. “We considered expansion based on the growth potential as a result of the state’s personal injury protection (PIP) /no-fault reform, some of which took effect in July 2021. The state’s prior mandatory unlimited PIP medical benefits proved too expensive for many Michigan families and some drivers just couldn't afford costly unlimited coverage,” Benalan explained. “We strongly believe CURE will make a difference in Michigan and provide affordable car Insurance there as we have done for 30 years in New Jersey and Pennsylvania.” Immediately after the launch, CURE saw a tremendous response from the public. The very first policies were for a mother and son in Pontiac, Michigan who had been paying a combined $3,600 annually. With CURE, their rate dropped to insurtechdigital.com

CURE AUTO INSURANCE

$1,820, a pattern repeated across the state and reflecting an average savings of more than 50% for many drivers.” This positive response was made possible largely by the recent and successful Phase 1 implementation of a new suite of Guidewire products. This includes adopting InsuranceNow to accelerate speed-to-market and business growth. “Speed-to-market was an important driver when considering a new system to help facilitate our goal of further expansion into new markets. Specifically, Guidewire InsuranceNow met our criteria – scalability, configurable, user-friendly and affordable,” said Benalan. “Also, its cloud and all-in-one aspects were both attractive and critical to help our IT staff increase efficiency by shifting maintenance and support to Guidewire so they are now able to focus on mission-critical business objectives that will accelerate our growth.” “The system architecture runs in a highly scalable AWS cloud with all the DevOps for deployment and monitoring.” Benalan adds. “Based on open API technology, integration is efficient with opportunities to share data between systems and came with Business Intelligence and a Looker tool for data reporting and dashboards. This program was delivered on time and within budget, while never losing sight of enhancing customer values. With the automation and scalable Guidewire system, management and internal users are now confident we can continue to explore expansion opportunities.” Benalan has great hopes for the Guidewire InsuranceNow product, which allows insurers like CURE to launch innovative enhancements in weeks – meeting rapidly changing customer needs and quickly scaling up with a single core system. “It's a multi-million-dollar initiative, where our entire policy, claims, and billing system are moving from legacy 84

January 2022

“ As a technology leader, I enjoy being part of business growth and finding creative ways to further satisfy both our internal and external customers” DOUGLAS BENALAN

CIO, CURE AUTO INSURANCE

platforms to a modern system.” The transition required thorough planning and coordination across business units with user testing and acceptance. “My vision for this modern system is long term ROI, increased automation, scalability and the flexibility to be used across different platforms and browsers. I also seek to deliver better data reporting to help make quick yet well-informed decisions.” Expansion and growth would be far more difficult using the previous, less scalable system. Root and branch transformation Change is not always easy, or welcome. However, by showcasing detailed projected

Eric S. Poe CEO, CURE Auto Insurance and Cade Cunningham, Detroit Pistons

ROI over a five-year period, Benalan illustrated the value of his proposed changes and convinced CURE’s various business units and key stakeholders. “The application design is a microservice architecture pattern, also comprised of small reusable services running in AWS cloud. It has a disaster recovery zone and a highly scalable database for faster performance. The application connects to complex third-party integration services with REST API. The design also has database replication for live reporting, where tools like Looker are used to slice and dice the data for the customised dashboard. One example is our use of the DocOrigin tool for

designing complex insurance forms, which has increased accuracy and efficiency.” At the same time, Benalan is establishing best practices for quality agile development. Since some of the integrating modules are out-of-the-box solutions with little flexibility for customisation, Benalan and his team architected expandable interfaces that were quickly implemented and accepted throughout the business. The CURE CIO keenly recognises any technical transformation has to be accompanied by a culture change. “The most important factors to this project’s success were user awareness and corresponding training insurtechdigital.com

programs. We used a tailored awareness, desire, knowledge, ability and reinforcement (ADKAR) model, in which all our business users were involved in each step in the systems development life cycle (SDLC), and their feedback was integrated throughout the process.” IT delivering value today and tomorrow Changing and modernising the IT infrastructure was another key task, such as leveraging CISCO technologies like Meraki and Umbrella to improve the health and security of the CURE ecosystem. Upgrades 86

January 2022

to the communication systems were also required to handle the expected growth in business and technological needs. To ensure the call centre had the tools needed on the digital journey, the IT team implemented a modern Genesys Cloud solution through which the number of dropped calls decreased while efficiency increased by 10%. Benalan emphasises that every change he and the IT team introduced were designed to serve the organisation's mission: to provide affordable car insurance based primarily on one’s driving record. To achieve this end and ensure constant improvement

CURE AUTO INSURANCE

Thanksgiving food drive donatons

to the applications, the team implemented a monthly feedback process involving review by all business stakeholders in order to improve IT strategy. Customer input was also part of the ongoing development and enhancements. “We have a number of measurable goals. One is a system where customers can buy policies online, reducing the need for manual operations and call centre costs. Under Benalan leadership, IT team successfully achieved 70% of the planned features for the online sales portal within a few months, with the remaining 30% scheduled for completion before year end.”

Although maintaining the old system was costly, the Guidewire implementation has already delivered measurable efficiencies, Benalan says. Because CURE refused to use certain socio-economic factors for rating, the need to consider credit history, occupation, college degree, and related factors is eliminated. The IT solution brings automation and easy customisation to policy generation, billing and affordable payment plans, delivering lowering premiums for customers with a good driving history. With these new systems in place, Benalan has now turned his attention to the customer experience, investing in interactive voice response (IVR), chatbots, secure claims submission and other advanced solutions so customers can access information 24/7. In the very near future, he will introduce predictive analytics for customer retention, and OCR technology to scan and upload policyholder information for complete automation. This will be complemented by seamless processing and integration with third-party partners for claims assistance such as Enterprise car rental and Safelite® AutoGlass. Since its start 30 years ago, CURE has remained wedded to the principle of ending unfair practices and discrimination in the insurance industry. The IT team, under the leadership of Doug Benalan, has furthered that principle while simplifying every interaction with its ever expanding customer base. Since CURE does not consider credit score, occupation, or education level as factors when determining rates, it's no wonder that it has been able to steadily grow its footprint nationwide.

insurtechdigital.com

STRATEGY

PARTNER NETWORKS AND THE FUTURE OF INSURTECH As the digital ecosystem continues to grow, we ask experts how insurtech partnerships are changing the space WRITTEN BY: JOANNA ENGLAND

ong gone are the days when monolithic mothership-style insurance giants dominated the industry unchallenged. While incumbents still make up the controlling majority of the space, an awakening of collaboration and partnerships has been slowly unfolding over the past decade. As technology has advanced and mobile penetration has taken service delivery to customer fingertips, companies have had to adapt. Outsourcing processes to third party operatives has become a way of life. And as digital transformation develops, it shows no sign of slowing down. We asked five industry experts how they thought the sector was changing - and what the future holds. 88

January 2022

Partnership networks and the legal perspective Rachel Hillier of Capital Law is an experienced regulatory lawyer and leads the Financial Services team Investor directors can be a huge asset bringing experience and contacts to the Insurtech board of directors, but I have also seen such partnerships fetter ambitions of Insurtechs and push the business into directions that were not intended by founders. Usually, the root of the problem is that these matters were not discussed in any detail at the beginning of the relationship. Many Insurtechs are Managing General Agents (MGAs), relying on insurance capacity from incumbent insurers, acting as the insurer’s agent with delegated authority to bind insurance on behalf of the insurer. This is a key relationship and finding the right capacity partner is vital to success. If an investor plans to exit within a certain number of years, it is important to talk about this at the beginning of the relationship. Insurers will have in mind a limit on the size of the book they are willing

LEFT TO RIGHT: Rachel Hillier, Leads the Financial Services team at Capital Law René Schoenauer, Director, Product Marketing EMEA at Guidewire Software Christina Di Nolfo, Head of Solutions at Delta Capital Jean-Marc Boxus, Associate Director at BCG Platinion Meeri Rebane, Co-founder and CEO of INZMO

insurtechdigital.com

Get the most of your ServiceNow investment GuideVision’s { NOW Doctor { service examines the state of your ServiceNow solution and determines remedies to optimise your investment.

As a ServiceNow Elite partner, GuideVision provides consultations, assessment and design, and customised ServiceNow implementations, trainings and ongoing support to organizations of all sizes from a variety of industries. We use the experience we’ve gained on 500+ projects worldwide to help our customers to reimagine, transform and enliven their ServiceNow platform.

Learn more

TWITTER FACEBOOK LINKEDIN YOUTUBE

STRATEGY

“ It is vital for the traditional insurer to decide why they want to innovate” RENÉ SCHOENAUER

DIRECTOR, PRODUCT MARKETING EMEA, GUIDEWIRE SOFTWARE

to cover and whether the authority is to be exclusive to them. Equally, Insurtechs may or may not have ambitious plans for an IPO within so many years or may have an eye on creating their own capacity (setting up their own insurer) at some point in the future. Mechanisms for agreeing changes to the type of insurance book and the limits of authority should be negotiated into the agreement. Honest and frank conversations about these matters at an early stage are vital. When it comes to recording each partnership in writing, the devil really is in the details. Will an investor be entitled to have

a director on the board? How often does that director expect to attend meetings? What decisions of the company will require investor consent? For delegated authority, there will be similar details in the delegated authority agreement (DA). The parameters of that authority must be carefully negotiated and drafted into the agreement. Whilst the extent of that authority is important, exit and reporting provisions must be considered. Intellectual property and confidentiality clauses could all also be points of friction if not discussed and written into the DA at the beginning of the partnership. insurtechdigital.com

STRATEGY

On ecosystem investment and development René Schoenauer, Director, is the Product Marketing, EMEA at Guidewire Software Investment in insurtechs is booming. According to Willis Tower Watson’s latest insurtech report investment in insurtechs has passed $10bn for the first time. Insurers can benefit from how this investment surge is funding insurtechs who can deliver key solutions along the whole value chain. Whether it is in streamlining business processes, increasing customer communication and satisfaction and being able to evaluate and manage risks more precisely and effectively. It is vital for the traditional insurer to decide why they want to innovate; only then will they be able to evaluate if an insurtech can deliver the value which they seek. Focus must be 92

January 2022

“ There has been a shift in mindset among consumers who are becoming increasingly disillusioned with traditional insurance offerings” JEAN-MARC BOXUS

ASSOCIATE DIRECTOR, BCG PLATINION

STRATEGY

placed on the business goals and strategy of an insurer and how technology can be used to help reach those goals. Fixating on the technology aspect of an insurtech may mean that business goals are not considered and the insurtech investment or engagement might not lead to the desired success. This could mean a mismatched partnership, leading to disappointment for both the insurer and insurtech. The position of incumbents Christina Di Nolfo is Head of Solutions at Delta Capital Many [incumbents] are scouting for Insurtech talent and have accelerator and technology incubator programmes trying to pick the best Insurtechs to augment their existing portfolios.

Embracing change as opposed to blocking it is imperative to understanding where an incumbent technology stack starts and ends, and how with the addition of Insurtechs into the technology portfolio, one can provide more innovative solutions. In addition, partnering with other incumbent technologies - or making integration capabilities more flexible - is further changing and enhancing the adoption of Insurtechs. There will be a greater ecosystem with a more collaborative approach. Companies coming together to solve the end-to-end customer problems and providing more complex solutions. However this complexity will lie in the meshing together of the partnerships and the technologies in the ecosystem. As a result, all of the complexity will be stripped out for the end client. insurtechdigital.com

STRATEGY

The pitfalls to partnerships Jean-Marc Boxus, Associate Director at BCG Platinion Before a business partners with technology providers to invest in any emerging digital trends, they must become what’s known as ‘bionic’. Bionic thinking requires taking a human-centric design approach to both services and products. Technology significantly changes every six to twelve months, so a key strategic function of businesses must be realising how those changes will impact work processes and society at large. This can only come from clear strategy and purpose; one that outlines a roadmap from start to finish forming connections between people. Ultimately, it’s the mix of human expertise and technology capabilities that leads to successful implementation and adoption. The bionic approach is fundamental. It’s what paves the way to future success and allows organisations to quickly respond to change and uncertainty, making growth a likelier prospect. Once insurers have in place the correct technology strategy, technology partners can be considered as a lever to accelerate digital. Part of this process must include exploring cultural alignment. Large established companies may not embrace innovation and entrepreneurship like smaller counterparts – something to really consider when looking at collaboration with an InsurTech. Finally, there’s size. Often companies are reluctant to team up with a start-up with no proven track record nor financial backing. Assuming there’s willingness to go ahead, insurers must consider the ways in which to collaborate. The final call to action is about defining the fundamentals of how insurers collaborate with partners, so who 94

January 2022

they collaborate with and the strategy that underpins this all. It’s about looking at what collaboration model works best for the business, whether it’s teaming up, taking a stake or acquiring. The future of partnership networks Meeri Rebane, co-founder and CEO of INZMO Speaking from a B2B2C perspective - because of the nature of these collaborations, the sheer number of stakeholders from numerous business divisions involved, combined with the level

STRATEGY

“Bionic thinking requires taking a human-centric design approach to both services and products” MEERI REBANE

CO-FOUNDER AND CEO, INZMO

of compliance and due diligence required, particularly within our sector - these collaborations are time intensive and each partner needs to be in it for the long term. The end result as we have experienced from a number of our own successful partnerships can be significant. There has been a shift in mindset among consumers who are becoming increasingly disillusioned with traditional insurance offerings and seeking out digital and more personalised and cost-effective alternatives embedded into products and services at the point of purchase. Such

embedded and ‘invisible embedded’ insurance experiences are gradually becoming the norm. As such we see a huge opportunity for B2B2C partnerships and expect to see more of these collaborations in the future. One area we anticipate an explosion of B2B2C partner networks is within P&C. With the rise in urbanisation and smart homes and the transition to connected vehicles, there is a lot of headroom for growth with new opportunities in terms of product lines, and the B2B2C approach offers an effective means of customer acquisition. insurtechdigital.com

CLAIM SETTLEMENTS AND THE CUSTOMER EXPERIENCE Competition is hotting up in terms of settling with customers with swift efficiency. We take a look at the latest advances in the space WRITTEN BY: JOANNA ENGLAND

January 2021

t's difficult to imagine any thriving industry operating without a digital, streamlined approach these days. But some insurance companies, relying on legacy systems, are still doing just that. Their customer experience is one that necessitates long, complicated and tedious application forms being filled in. Weeks are spent underwriting, holding up claims that could be paid. The whole process is antiquated and frustrating for the customer, who is becoming increasingly aware of better services elsewhere. The pandemic has hit these dinosaurs of industry hard. Because their core processes are still reliant on manual labour and paper pushing, lockdowns have impacted performance over the past two years, with skeleton crews creating unrequited claims bottlenecks.

TECHNOLOGY

insurtechdigital.com

WHAT’S NEXT FOR UNDERWRITING By utilizing AURA NEXT’s digital decision management tool, you can generate faster underwriting decisions – powered by the life insurance experts at RGA.

INVEST IN TOMORROW WITH THE MOST ADVANCED SYSTEM IN THE MARKET TODAY.

www.rgax.com

LEARN MORE

TECHNOLOGY

It’s one of the reasons why insurtech has reached a global funding round total of more than US$15bn over the past 12 months – and why the sector’s investment rate has grown six-fold since 2017. Today, customers expect instant results and streamlined sign-ups. Even life insurance companies (well known for their long and arduous pre-premium assessments) are cutting out the bureaucracy and slimming down their applications to ninja-fast proportions. DeadHappy, one of the UK’s fastest-growing life insurance providers, for example, can provide a customer with cover after just three mobile app questions. The future of claims settlements Insurers are aware they have to change their claims management, as customer expectations demand they be served 24/7. Furthermore, companies must provide communication channels that offer chatbot services that are intelligent enough to know when a human service provider is required. Technology and the use of AI are performing this process – particularly within insurtech startups. The net effect of AI and data analytics on the claims settlement process has been startling.

“ Underwriting or claims decisions, which previously took weeks, will be made within hours and, in some cases, immediately” PAUL DONNELLY MUNICH RE

Certain sectors have embraced the technology more than others. As Marcos Malzone, VP Product Management at Solera EMEA, succinctly puts it, AI has allowed the motor claims and broader insurance industry to modernise a process that has been traditionally paper-driven, slow and inefficient. ”For example, it is now possible to settle a claim within minutes just by processing images of damaged vehicles insurtechdigital.com

TECHNOLOGY

through computer vision algorithms and automatically generating an accurate repair cost estimate.” Paul Donnelly, Executive Vice President, EMEA at Munich Re, agrees. He says, “With each acceleration to the settlement process, the carrier is able to improve the insured’s experience of their service and their experience of insurance as a whole.” Donnelly believes the success of these ‘pay and finalise’ systems to date means that he expects to see a role for AI and data analytics in claims settlement of everincreasing complexity. Embracing the technology The new technologies have made great strides in some areas and have had less impact in others. Often, this is because some sectors are naturally more technology-open than others. Alan O’Loughlin, Director, Data Science International at LexisNexis Risk Solutions, believes commercial property insurance has been significantly driven forward by the technologies. He says, “I think the use of AI and data analytics in claims management and settlement has advanced in some lines of business more than others. In the commercial property insurance arena, data analytics and data visualisation are enabling providers to understand the precise impact of a severe weather event on policyholders in a defined location.” O’Loughlin points out that companies can use motor insurance, telematics or usage-based insurance and its driving behaviour data to get on the front foot at first notification of loss (FNOL), helping to deliver a better consumer experience post-accident. He says, “Changed customer expectations, new technologies, and 100

January 2022

“ Changed customer expectations, new technologies, and new market entrants require insurers to rethink the claims journey” ALAN O’LOUGHLIN

LEXISNEXIS RISK SOLUTIONS

new market entrants require insurers to rethink the claims journey. The insuranceclaims journey—from prevention, to loss notification, to assessment, to handling and settlement—has historically been opaque and confusing to customers.” “They have paid in advance for an abstract product, a policy to defend against risk, and at the “moment of truth” when they want to recoup a loss, they are faced with a complex, cumbersome, often very time consuming and iterative process.” From the insurer’s perspective, claims management is often seen as a cost centre only, as claims expenses and indemnity

TECHNOLOGY

spend constitute a significant factor for the company’s overall financial success as a whole. “In the European insurance markets, for example, the annualised growth of total benefits-and-claims spend is more than 4%, translating to more than €350bn per year, a number that is sure to rise,” O’Loughlin concludes. Automation implementation and resistance to change As the past two years have demonstrated, those that fail to embrace the new digital experience look set to be left

behind. Traditional insurers are under pressure to improve loss ratios and increase customer satisfaction as insurtechs utilise emerging technologies to deliver better overall service. “The pandemic has increased the need for process digitalisation, task automation and remote working because of social distancing restrictions,” says Malzone. Customer expectation is also an essential component. Consumers want their insurance experience from quote to claim to be straightforward and efficient. However, automation must not replace human expertise in claims; companies should use it to insurtechdigital.com

101

TECHNOLOGY

“ It is now possible to settle a claim within minutes just by processing images of damaged vehicles through computer vision algorithms and automatically generating an accurate repair cost estimate” MARCOS MALZONE SOLERA EMEA

102

January 2022

streamline processes and allow human skills to benefit the customer in more valuable ways. “We must also consider the rise of IoT (internet of things) and how quickly the best user experience becomes standardised due to customer expectation,” O’Loughlin says. And as insurtechs scale at speed, incumbents will struggle to maintain their established marketplace position, says Donnelly. “While every life insurer recognises the role of automation for scaling business volumes, the value of consistent decisioning, accelerated processes for brokers and customers should not be underestimated. Insurers who rely on outdated modes of doing business will be quickly left behind.” A technology-driven future Right now, insurtechs are still in the

TECHNOLOGY

minority. Though they are making considerable headway in the marketplace, incumbents still have a majority hold on customers. But how long can this continue for when insurtech growth is exploding? Customers will vote with their feet and find better services if incumbents don’t ditch their traditional product delivery processes. Today, a customer with UBI with a reputable insurtech can experience a road traffic accident that is automatically logged with the insurer, which provides a roadside recovery service within minutes. The customer can upload images of their accident to their insurer while at the scene of the accident. Insurtechs can process this information in minutes – and a claim can be paid directly into a customer’s account before the recovery truck even arrives.

These experiences are a long way from the realities that antiquated incumbents are offering. Donnelly says, “I foresee increasing penetration of automation into both underwriting and the claims process. The pandemic, and the changes to society it has brought, mean that face-to-face interactions in the insurance onboarding process or even the claims process are becoming less and less frequent.” He adds, “Underwriting or claims decisions, which previously took weeks, will be made within hours and, in some cases, immediately. This is only possible through automation and by removing the dependence on skilled claims assessors and underwriters to review routine cases.”

insurtechdigital.com

103

TOP 10

104

January 2022

As insurance becomes increasingly digitised, we take a look at the companies leading in pack WRITTEN BY: JOANNA ENGLAND Insurance is no longer the domain of boring form filling and long waits to receive claims. Instead, companies are dynamic, customer centric, use real-time data to assess claims, and can even action payouts in minutes. We’ve listed the top 10 digital insurers to watch in 2022'.

insurtechdigital.com

105

TOP 10

Marshmallow Founded: 2 015

10 Zego

Founded: 2 016 Launched in 2016 and taking cover flexibility to a new dimension, Zego is the UK’s leading digital insurer in the delivery driver space. Zego’s flexible pay-as-you-go delivery insurance is designed to help part-time delivery drivers save on the cost of their insurance. Couriers working with leading delivery companies are charged by the minute with a minimum charge of one hour’s cover. Customer cover continues as long as users are still on deliveries and ends when they stop work.

106

January 2022

Describing themselves as the car insurer with a conscience, Marshmallow is redefining the European motor insurance space. With its cutting edge platform and swift underwriting solutions, users have the advantage of fast claim response and policy flexibility. The company also incentivises customers by ensuring 500 miles of driving every year free, thanks to its new carbon offsetting programme. It also provides plans to motorists unable to get insurance from traditional providers.

08 DeadHappy Founded: 2 013

Another insurtech that appeals to Millennials and Gen Z, DeadHappy is proving that life insurance isn’t just for the wealthy. In fact the company has gone above and beyond in its offerings to address the protection gap, which sees huge swathes of the population do without vital life cover due to its expense. The company has also managed to inject some fun into the process with its Death Wish platform, which enables customers to tailor their own Death Wish gifts, bequeathed to their loved ones.

07 Vitality

Founded: 2 004

The UK’s NHS has generally meant health insurance has not become a large sector. But recently, as services came under strain from the pandemic, companies like Vitality have reaped the rewards. The insurtech offers customers incentive-drive cover that is disrupting the sector. Using wearables that track heart rate, activities and blood pressure, users can get themselves covered with private medical insurance for as little as £1.25 per day.

insurtechdigital.com

107

Avoid the Top 5 Most Common Open Source Vulnerabilities Within Financial Organizations Learn what open source vulnerabilities are commonly found in financial services organizations.

LEARN MORE

TOP 10

06 Hippo

Founded: 2 015 Hippo is a US-based digital insurer that offers a different sort of homeowner insurance. Based in California, the property insurance company incentivises customers by encouraging smart home devices that improve security risks as well as tracking maintenance. The idea is that the sensors provide valuable data on the state of the property, thereby reducing the risk of accidents, such as burst pipes or leaks – or even break ins. The insurance covers the homes and possessions of the insurance holder as well as liability from accidents happening in the insured property. They use AI and big data to aggregate and analyse property information.

Next Insurance Founded: 2 015

Making life easier and cheaper for the small business owner, Next Insurance is taking the US insurtech scene by storm. Having tapped into a relatively neglected demographic, the company, which is based in Palo Alto, California, offers cost-effective, easy to manage policies to a range of small businesses from general contractors to personal trainers. Next co-founders are Nissim Tapiro, Guy Goldstein, and Alon Huri. The trio had previously founded a company that they named Check, Inc. which was purchased in 2014 by Intuit.

insurtechdigital.com

109

TOP 10

04 Root

Founded: 2 008 Taking telematics into the mainstream marketplace to enable safer drivers to benefit from better premiums, Root is revolutionising the US motor insurance market. Previously, such cover was only available to fleet operatives, but Root’s technology enables drivers to have their road performance assessed and monitored. The company incentivises safer driving through lowered premiums. Drivers simply download the insurtech’s mobile app and perform test driving for several weeks while the app monitors the driving behaviour in the background.

03 Wefox

Founded: 2 015 The fastest growing insurtech in Europe, Wefox was launched in 2015 by Julian Teicke, a dynamic entrepreneur who decided to create the insurtech after conversations with his father, who had spent his entire career in the insurance industry. Wefox is now Europe’s number one digital insurer. It boasts eight offices across the continent, and has more than 2000 employees and advisors. In June, 2021, the company made international headlines following the world’s biggest insurtech investor funding round to date, of $650mn. With a valuation of $3bn, Teicke made the company’s IPO, and then promptly made every employee of Wefox a shareholder with a $5,000 stake in the company.

TOP 10

Founded: 1999

Esurance

Founded in 1999 – and built with digitisation in mind, Esurance Insurance Services, Inc was one of the very first digital insurers to become operational in a time when mobile technology was still grappling with SMS. But its longevity in the marketplace and its founders willingness to adopt innovative technologies as they emerge, has stood it in good stead. Esurance currently sells auto, home, motorcycle, and renters insurance directly to consumers online and by phone. Its primary competitors are other direct personal insurance writers, mainly GEICO and Progressive.

insurtechdigital.com

111

EMPLOYEES ARE WORTH KEEPING Don’t risk losing them to older methods of cannabis testing. WATCH OUR VIDEO

Only the ultra-sensitive

HOUND® MARIJUANA BREATHALYZER

tests for very recent cannabis use, providing results in minutes.

The HOUND® MARIJUANA BREATHALYZER makes it easier to hire and retain trusted employees. CANNABIS DETECTION WINDOWS 2 PEAK IMPAIRMENT3 up to

1m on th

24 ho ur s

Urine Oral Fluid

up t o

rs hou -3

CONCENTRATION

2-3 hours

to 3 months

Breath HOURS

DAYS

WEEKS

MONTHS

More employees are choosing to legally use cannabis. Because tests of oral fluid, urine, and hair can detect cannabis use for days, weeks, or months, there is a greater risk of positive results. The era of cannabis legalization requires new technology to balance SAFETY + FAIRNESS . TM

JOIN THE WAIT LIST 1

2 3

The HOUND® MARIJUANA BREATHALYZER is for law enforcement, employer, and insurance use only. Not for any medical or therapeutic use. https://houndlabs.com/2018/09/06/how-long-can-marijuana-be-detected-in-drug-tests/ https://houndlabs.com/wp-content/uploads/2020/12/drugshumanperformfs.pdf

Hair

TOP 10

Introducing The Lemonade App [See It In Action]

114

January 2022

TOP 10

Lemonade

Founded: 2 015 Founded in April 2015, Lemonade has moved from strength to strength. It has been a massive disruptor in the insurtech space. The company currently holds the record for the most high ranking, independent customer reviews of any insurer in the US – a title that pays testimony to its streamlined process and services. Lemonade has also diversified since its launch and now offers a wide range of products, from pet and P&C, to car insurance and health cover. One aspect that sets the company’s services apart from the pack is its Live Policy. Live Policy, enables Lemonade customers (existing and new) to make changes to their coverages whenever and wherever they are. The company claims, “It’s actually easier to change your Lemonade coverage than it is to pay for your latte.”

“ It’s actually easier to change your Lemonade coverage than it is to pay for your latte” insurtechdigital.com

115

A result-driven, committed software partner for global insurers Streamline core operations, improve underwriting accuracy, reduce administrative costs, and prevent fraud with DataArt, a niche technology advisory and consulting firm. Partner with DataArt to identify key business & technology trends within the insurance industry, develop solutions, and implement them for helping your clients keep ahead of the curve.

Learn More