InsurTech Magazine - July 2022 by insurtechdigital

July 2022 | insurtechdigital.com

INSURANCE

Automation in the insurance industry

AMERICAN INSURTECH PLATFORMS TO WATCH IN 2022

DIGITAL TRANSFORMATION The transformation taking place in insurance

TECHNOLOGY The future of AI and ML in the insurance space

MGA:TPA

Speeding towards a safer future?

S E C A U T D A O D NT T NCE INTR A R H U S C E N I T R SU K N O I O L ATION R T O B U COLLA O N I L E

A B GLO 2 2 0 2

FEATURING:

AXA

WITH

PEKIN INSURANCE

MAPFR

GROUPASSUR

Connected Insurance is helping digital platforms, reduce their risk exposure

Connected Insurance: UBI and the Sharing Economy Connected Insurance’s Tal Cohen and Yaron Zurr reveal how CI is revolutionising UBI solutions in the sharing economy Connected Insurance (CI) created a datadriven risk platform that powers the next generation UBIs, driving the space forward. Tal Cohen, co-founder and CEO of CI explains, “The sharing economy is a relatively new industry with limited exposure history. Traditional insurers are using traditional risk models that they use for similar products. This results in low accuracy pricing, which is based on few risk factors and a black box that customers can’t understand or control. By differentiation, CI breaks the insurance paradigm.” “Our technology employs pricing models with much higher granularity, factoring many more data points currently ignored standard pricing models. We provide our clients transparency on their insurance costs and empower them to control and reduce costs by making educated decisions,” he says.

Strategic partnerships Extending their services into the marketplace has been achieved by a collaboration with some of the world’s leading insurance players. Yaron Zurr, co-founder and CCO of CI, says “We believe that insurance players

should become contributors and enablers to the businesses they serve. We provide a solution that empowers our partners to make a better insurance offering to their client, as well as solution for the digital platforms to manage their self-insurance and enable them to offer even more relevant protections to their end clients.”

Technology-driven innovation and CI CI’s full-stack solution connects and serves all parties: sharing economy platforms, brokers, claim administrators, and reinsurers. Connecting everyone under the same platform, says Cohen, creates transparency, leads to better insurance pricing, and ultimately allows sharing economy companies to reduce their total exposure costs. Cohen adds, “CI provides digital platforms with essential tools such as: Risk & utilization dashboards to help the platforms manage their insurance costs and control their risk; Connected Claims module integrated into the digital; tools to manage the self-insurance part better than most advanced carriers; and tools for rapid creation of embedded insurance.” The result is a seamless delivery of services and a satisfactory customer journey, concludes Zurr, who adds, “CI can optimise the customer’s insurance pricing by focusing on the lower risk usage and avoid the riskier transactions.”

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The InsurTech Team EDITOR-IN-CHIEF

JOANNA ENGLAND EDITOR

ALEX CLERE CHIEF CONTENT OFFICER

SCOTT BIRCH

PRODUCTION DIRECTORS

GEORGIA ALLEN DANIELA KIANICKOVÁ PRODUCTION MANAGERS

PHILLINE VICENTE JANE ARNETA

CREATIVE TEAM

OSCAR HATHAWAY SOPHIE-ANN PINNELL HECTOR PENROSE SAM HUBBARD MIMI GUNN JUSTIN SMITH REBEKAH BIRLESON JORDAN WOOD DANILO CARDOSO CALLUM HOOD CHIEF DESIGN OFFICER

MATT JOHNSON

MARKETING MANAGER

EVELYN HOWAT

PROJECT DIRECTORS

KIERAN WAITE

JAKE MEGEARY MICHAEL BANYARD JOE PALLISER

DIGITAL VIDEO PRODUCERS

MANAGING DIRECTOR

VIDEO PRODUCTION MANAGER

MARTA EUGENIO ERNEST DE NEVE THOMAS EASTERFORD DREW HARDMAN MEDIA SALES DIRECTOR

BEN MALTBY

LEWIS VAUGHAN

CHIEF OPERATIONS OFFICER

STACY NORMAN CEO

GLEN WHITE

FOREWORD

WEATHERING THE STORM THROUGH TECHNOLOGY Insurtechs are tackling the climate change crisis through satellite technology and space-age innovation

“Satellites and drone technologies, robotics, automation and AI are all transforming the space”

The insurtech industry is a highly creative space. From health to P&C, and travel to climate crisis solutions, technology is at the forefront of innovation and change. I’ve been particularly impressed with the recent changes in the parametric insurance offerings in their handling extreme weather events and natural disasters. It is in this space that the cutting-edge, space-age tech is tackling problems head on. The traditional insurers are listening, too, and enlisting the help of the digital ecosystem to bolster their offerings and reach out to a wider customer base. Risk assessment is razor sharp, while real-time data results in a claims’ management process that has become streamlined and frictionless. Satellites and drone technologies, robotics, automation and AI are all transforming the space. Every day there is news of a different solution and product that offers better value to the customer. It might be a difficult time for the world in many respects, but it's heartening to see the efforts being made to ease the burdens of customers. We hope you enjoy this month’s issue!

INSURTECH MAGAZINE IS PUBLISHED BY

JOANNA ENGLAND joanna.england@bizclikmedia.com

insurtechdigital.com

CONTENTS

Our Regular Upfront Section: 10 Big Picture 12 The Brief 14 Timeline: Wearables in insurance 16 Trailblazer: Peter Ma 20 Five Minutes With: Andy Yeoman

Insurance

Automation in the insurance industry

NTT Data Insurance NTT DATA Insurance introduces Insurtech Global Outlook 2022

Pekin insurance

Pekin insurance leading transformation in insurance industry

GroupAssur

Fostering innovation through technology

96 68

MGA / TPA

Digital Transformation

Digital transformation in insurance

104

Speeding towards a safer future?

120

Technology

The future of AI and ML in the insurance space

128 AXA

Gary Ho on Digital Transformation as CTO at AXA HK and Macau

Top 10

US Insurtech Platforms to watch in 2022

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BIG PICTURE

Inflation squeezing household budgets Norway

Allianz expects the cost of insurance premiums globally to rise by 4.8% this year – at a time when consumers can afford it the least. It comes against the backdrop of projected global inflation of 6.2%. Inflation was already high thanks to high commodity prices, supply chain interruptions and high energy costs – but the situation has been compounded by Russia’s invasion of Ukraine, Allianz says in a new report. EU leaders have reached a deal to block most Russian oil imports by the end of 2022 and seek alternative energy supplies.

July 2022

insurtechdigital.com

THE BRIEF “THERE IS ALWAYS A BALANCE TO BE ACHIEVED BETWEEN AUTOMATION AND ENSURING THE HUMAN TOUCH IS NOT LOST” JEFFREY SKELTON

MMD Europe, LexisNexis Risk Solutions  READ MORE

BY THE NUMBERS WE ASKED:

Which of these issues poses the biggest threat to insurers?

37%

Slow digitisation

33%

Evolving consumer demands

24%

“MOST FLEET MANAGEMENT SOFTWARE HAS TECHNICAL DEBT CHALLENGES AND IS OFTEN DIFFICULT TO CHANGE OR INTEGRATE WITH OTHER PLATFORMS”

Blindness to risk

Undersharing data

BISWAJIT KUNDU ROY CEO, Coastr  READ MORE

“COMPANIES SHOULD BE STRIVING TO MOVE AS MUCH HIGH-VOLUME, LOWER-COMPLEXITY BUSINESS TO A DIGITAL SELF-SERVICE MODEL”

PAYPAL ANNOUNCES NEW COLLABORATION WITH AON PayPal has formed a strategic partnership with Aon that will see insurance services provided to customers directly through the fintech payments platform

APOLLO GROUP LAUNCHES EUROPE’S FIRST AUTONOMOUS VEHICLE COVER Apollo Group has launched Europe’s first zero-occupancy, on-road autonomous vehicle journey cover in partnership with Oxbotica, as it anticipates self-driving cars becoming more common

PAUL RICHMOND Product Manager, Novidea  READ MORE

July 2022

MARSH LAUNCHES GREEN ENERGY INITIATIVE FOR US & CANADA Marsh is heading up a new facility that provides dedicated insurance capacity for mid-scale solar and battery energy storage system (BESS) risks in the US and Canada

 COVER WHALE

Cover Whale, a New York-based commercial auto insurtech, has exceeded US$100mn in written premiums. President Kevin Abramson said that, to their knowledge, they were the fastest growing insurtech to reach the milestone in under two years.

 QOALA

JUL22

 COTERIE

Small business insurtech Coterie is laying off staff barely seven months after a US$50mn Series B round. Co-founder Tim Metzner confirmed the news "with a heavy heart". Reports suggest 20% of employees could leave.

 BRIGHT HEALTH GROUP

Bright Health Group says it's exploring ways to raise additional cash amid quarterly losses of US$180mn. The company's valuation has dropped from US$13bn when it went public last year to around US$1.5bn today.

BAD TIMES

Insurance company Aviva is warning of a surge in fraudulent insurance claims, after reporting a 13% rise in claims' fraud for 2021. The company uncovered more than 11,000 instances of claims’ fraud last year, totalling more than £122mn, and is currently investigating a further 16,700 claims for suspected fraud. It is underlined by a sharp increase in the number of bogus home insurance claims, which went up by 45% – the highest rate in seven years. Aviva had already warned that home insurance fraud detection would need to be a priority in 2022, with the rising cost of living set to create additional pressures on consumers. Aviva's Chief Claims Officer Waseem Malik said there would be more claims' fraud to come as household budgets come under growing pressure. The company also warned that new regulations around whiplash could push fraudsters towards slips, trips and falls.

Indonesian insurtech startup Qoala has raised US$65mn in Series B funding, led by European investment firm Eurazeo. Qoala distributes retail insurance products to consumers for car, bike, home and health through its omnichannel platform.

GOOD TIMES

AVIVA WARNS OF RISE IN FRAUDULENT INSURANCE CLAIMS

insurtechdigital.com

TIMELINE

WEARABLES IN

INSURANCE

With the advent of smartwatches and fitness trackers, insurance providers now have novel ways of incentivising positive health behaviours among their customers

1990s The dawn

The foundation for the dawn of wearables is set by a team at MIT, led by Rosalind Picard, which develops a range of ‘smart clothing’. The various garments prototyped – including jewellery and underpants – are capable of continuously monitoring data from the wearer.

July 2022

2009

2021

The prototype Sony Ericsson partners with the London College of Fashion on a competition to design an item of digital clothing. The winner, designed by student Georgie Davies, is a bluetooth cocktail dress that lights up when it receives an incoming phone call.

2015

The pioneer South African insurance company Discovery, widely seen as a wearables pioneer, starts offering customers the newlyreleased Apple Watch for free – if they meet targeted health goals. They will have to pay for the device over a fixed period if they fail to keep active.

The hangover

2017

The early mover UnitedHealthcare, the largest healthcare insurer in the US, teams up with Fitbit to launch a customised device that customers can wear and earn back credits against the cost of their plan – an early example of an insurer factoring wearables directly into the cost of a plan.

Research from Deloitte finds that nearly 40% of US consumers own a smartwatch or fitness tracker; over 25% of those subscribe to a service offering personalised health feedback; and 60% of people who subscribe to such a service are concerned about the privacy of their data.

20??

The future As wearables become more popular, they can be applied to areas of insurance where they have never been used before – like life insurance. Can life insurers take historic data from applicants who already use wearables and provide a tailored life insurance quote, all without adding to anxiety around data? Only the future will tell…

insurtechdigital.com

TRAILBLAZER

PETER MA:

The man behind China’s largest insurer Aged 33, Ma set out to create an insurance company in a rural part of China. Today, that insurer – Ping An – writes over US$100bn in net premiums every year JOB TITLE: CHAIRMAN COMPANY: PING AN INSURANCE

eter Ma Mingzhe is the current chairman and former CEO of China’s insurance giant, Ping An. Since graduating with a doctorate in Money and Banking from Zhongnan University of Economics and Law, Ma has spent virtually an entire career in insurance. He was the deputy manager of a large Chinese real estate company before founding the firm with which he has become synonymous. When Ma was 33, he started Ping An, which translates as “peace and safety”. Today, the city of Shenzhen is a major financial hub, but in 1988 it was an outpost in a largely agricultural area. With founding capital of 42mn yuan (just over US$11mn at the time), Ping An became the first joint-stock insurance company ever in China. Its initial products included property, transport freight and liability insurance products. 16

July 2022

Life insurance would become one of the kingpins of the firm’s growth – but it was slow to get off the ground. China has a longstanding cultural taboo related to talking about death, so it wasn’t until 1996 when Ping An’s first life insurance policy was signed. The company was only able to sell life insurance to Chinese consumers by framing it in the context of saving, and not in the context of dying. Over the next 25 years, Ma led Ping An through rapid growth. Last year, the group revealed that it had over 220 million retail customers and more than 600 million website users. It is one of the world’s largest insurance companies, second only to UnitedHealth in terms of net premiums written. A man with an understated reputation Ma himself is a man with a reputation for operating discreetly and under the radar – reserved, astute and politically shrewd. After all, he built an empire from selling life insurance in a country where talking about death

“ Digitalisation is not only a technological development, but also a revolution in the way we think and behave”

insurtechdigital.com

TRAILBLAZER

is culturally taboo and at a time when private enterprise was still relatively uncommon, just 10 years after China’s economic reform. His understatedness, however, has not prevented him from being ambitious. As CEO of Ping An, “he embarked on an aggressive acquisition strategy into banking, blockchain, wealth management and traffic control systems”, according to the Financial Times. In the mid-1990s, he courted the company’s first foreign investment after meeting executives from Morgan Stanley and Goldman Sachs at a lychee festival in Shenzhen. The investment made Ping An the first Chinese insurer with foreign shareholders, and it was one of the first private equity investments in a Chinese company. Talking about his attitude to securing growth, Ma would later say: “If you want to cross the river, use the bridge. It's quicker and more efficient and you don’t have to get wet.” More recently, he is seen as instrumental in Ping An’s private calls for HSBC to separate its Asian and Western operations, which some observers believe would allow the bank to concentrate on remaining profitable and future-proofing itself against political sanctions. It is an about-turn for Ping An, which, having once been part-owned by HSBC, is now its largest single shareholder. A spokesperson for the company said it “supports a debate about the future of the bank” and “supports all reforms and proposals from investors that can help HSBC’s operations and long-term growth”. For its part, HSBC seems to be taking the calls seriously. Though the bank 18

July 2022

US $11.2mn

Ma started out with 42mn yuan in founding capital for Ping An

US $100bn

Today, Ping An boasts more than in net premiums written per year

220mn

Today, Ping An has over 220 million retail customers and more than 600 million website users

Pingan Financial Center

still appears to see its future as a global bank, it has reportedly called in the help of investment bank Robey Warshaw to advise it on strategy. Stepping down as CEO During the first two decades of the new millennium, Ping An continued to grow with considerable momentum. In 2017, Ma told Institutional Investor that the secret to the company’s success was placing itself at the heart of its clients’ businesses. “Not only must we be the insurance expert for every one of our customers, we must be their expert financial

“ If you want to cross the river, use the bridge. It's quicker and more efficient and you don’t have to get wet” consultant and their assistant in every aspect of their lives,” he said. “The biggest advantage of Ping An’s business model is our wider range of expertise.” Ma stepped down as CEO in 2020 and handed over to three co-CEOs – Jason Yao Bo, Xie Yonglin and Jessica Tan Sin-yin – but remained as Chairman. According to the company, he now plays a core leadership role, in charge of decision-making around strategy, human resources, culture and other major issues. He continues to be actively engaged with the business and remains interested in a number of core topics affecting the insurance industry, such as digitisation. “My view is that digitalisation is a fundamental project for the progress of human society and productivity in the 21st century,” he wrote just last year. “It is a revolution that enables leapfrog improvements in the ability of human cognition. Digitalisation is not only a technological development, but also a revolution in the way we think and behave.” insurtechdigital.com

FIVE MINUTES WITH...

CEO AND CO-FOUNDER OF CONCIRRUS

Andy Yeoman A voracious reader and a golfing fanatic, Concirrus CEO Andy Yeoman tells us how his year is panning out.

Q. WHO WAS YOUR CHILDHOOD HERO AND WHY?

» I was really fortunate when I grew up, in

that my parents lived 200m from the local golf course so, from the age of 11, I became obsessed with the game. On school nights, weekends and holidays I was always out practising and loved watching the game on TV. My hero was a German professional called Bernhard Langer – I admired his cool 20

July 2022

head and systematic approach to improving his game. I once remember an article quoting him saying that ‘winners are created on the practice ground by those that practise to mitigate their weaknesses rather than flatter their strengths’.

Audible…. otherwise I think that Amazon’s Alexa is great. I have connected my whole house, including the AGA, to this – I love it.

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

look up to and consider myself incredibly fortunate in this respect. Our chairman, Richard Little, is fantastic and has been a great counsel for me in the business. In the insurance industry I admire many people: Steve Catlin, for his challenging of the London insurance market; Daniel Schreiber, CEO of Lemonade, for challenging the way that insurers are built; Marcus Baker, chairman of Marsh Marine, for his exquisite networking skills, and so many more.

» I’ve received many pieces of advice

over the years that I’ve cherished and carried around with me. The one that comes to mind was from a former boss of mine who told me that, no matter how talented someone is, detailed preparation can transform their performance. I always encourage our teams to do this across the business, whether creating an agenda, preparing for a sales meeting, or meeting a customer – be clear about your objectives and prepare thoroughly.

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

» I am quite a voracious reader of books,

and I’ve read quite a few in the last month:

• Getting to ‘Yes’ by Roger Fisher • Hyperfocus by Chris Bailey • Endure: Mind, Body and the Curiously • E lastic Limits of Human Performance

by Alex Hutchinson • If this is a Man by Primo Levy • The Power of Strangers by Joe Keohane The one I’m reading right now is Red Notice by Bill Browder.

Q. N AME ONE PIECE OF TECHNOLOGY YOU COULDN’T LIVE WITHOUT AND TELL US WHY

» If I am allowed an app, it would be

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

» I have an amalgam of people who I

Q. W HAT’S THE BIGGEST CHALLENGE/ ADVANTAGE YOU’VE ENCOUNTERED TO DATE IN THE INSURTECH INDUSTRY?

» Wow – this is a big question. Concirrus

started in insurance with a belief that we are

“ I am inspired by the sheer possibility for the industry”

5 FIVE MINUTES WITH...

now living in an age that’s fundamentally different to the 300 years of insurance that came before us. The main difference between then and now being that, previously, we operated in an environment of data paucity. We simply didn’t know what was happening to the assets and risks that were being insured. A simple example is car insurance – we simply didn’t (and couldn’t) know how, when or where the cars were being driven. Because of this, the market developed proxies – age, profession, etc. – that could be used for rating risks. However, we no longer live with a paucity of data, we live in an abundance – or more likely an overload of information. We can’t keep up…. information is now everywhere. The internet of things is growing at an exponential rate, creating new data on the assets insured and this means that what was previously unknown or unknowable can now be known – but what will we do with

“ The biggest potential advantage that insurers have is to leverage this new goldmine of data”

July 2022

that knowledge? We can now know how, when and where the cars are being driven! This applies to almost every market. The biggest potential advantage that insurers have is to leverage this new goldmine of data, develop a view of the ‘behaviour’ of the risks being insured, and use that to rate and manage the risks that they write.

Q. D ESCRIBE YOURSELF IN THREE WORDS

» Innovative,

industrious, and sarcastic!

Q. W HAT'S NEW ON THE HORIZON FOR YOUR COMPANY WHAT CAN WE LOOK FORWARD TO SEEING AS THE YEAR UNFOLDS?

» This is an exciting year for Concirrus –

we’ve reached a milestone recently with our 25th customer and are looking forward to many more to come. Our business continues to grow and learn more about the markets that we serve. What started off as an idea – ‘behavioural analytics’ – has now become a software category. In the year ahead, we see a huge amount of value in driving our analytics further into

the specialty insurers and MGAs, combining operational reporting and risk analytics into one easy-to-use solution.

Q. W HAT INSPIRES YOU IN INSURTECH TODAY?

» I am inspired by the sheer possibility

for the industry. I was recently at an event where the CEO of a large insurer stated that 90% of the world’s risk is uninsured. I found that incredible, as what it really means is that the insurance products for 90% of the world’s risk have yet to be invented and introduced to the market. The growth

potential of this industry is huge and, as data combined with advanced analytics shines a light on the risks that are written, I can see boom times ahead. insurtechdigital.com

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Akamai prioritises the future demands of cyber customers Steve Winterfeld of Akamai discusses the company’s university-based founding and how it merged into a leading multibillion-dollar cybersecurity firm Akamai was founded following a competition at the Massachusetts Institute of Technology (MIT), entered by its co-Founder and CEO Frank Thomson Leighton—Dr Tom Leighton. Since that time, the organisation has expanded massively, and in the words of Steve Winterfeld, Advisory CISO at Akamai, the company “continues to solve hard problems.” The cybersecurity company plays a critical role for corporations as it focuses on the future, to determine whether threat motivation will change and how to best combat ransomware attacks, state-sponsored DDoS attacks, and ransomware that could turn into wiperware. “Those are real concerns, and we’re keeping an eye out for those. And so we have probably 15 security capabilities backed up by services, responding to customers’ needs and rapidly growing on the edge compute and cloud side.” “We started out with a web application, or as it is more commonly called now, web application and API protection, and expanded into protecting the infrastructure against DDoS to include the DNS infrastructure and recently added internal infrastructure protection and visibility through micro-segmentation,” explains Winterfeld.

Responding to the cybersecurity needs of the customer As an established cybersecurity organisation, Akamai can now focus on what customers need. Winterfeld explains that, in response to its clients’ feedback, the company has been acquiring the necessary assets and tools to fulfil those needs with the recent purchase of Guardicore. Guardicore’s leading microsegmentation products will be added to Akamai’s comprehensive portfolio of Zero Trust solutions to protect enterprises from damage caused by breaches like ransomware, while safeguarding the critical assets at the core of the network. “We bought Linode, which is a cloud provider. And so now we have an integrated platform to build and perform on as well as secure.” A prime example of Akamai’s ability to meet customer demands, particularly in high-risk environments, is its partnership with First Bank, which is “very concerned about its real-time visibility into its network. We’re partnering with them on a software-based microsegmentation, where they’re able to see those data flows and create segments.”

NTT DATA

July 2022

Global Trusted Innovator

NTT DATA Insurance introduces Insurtech Global Outlook 2022

AD FEATURE WRITTEN BY: İLKHAN ÖZSEVIM PRODUCED BY: MICHAEL BANYARD

insurtechdigital.com

NTT DATA

The IT Service and Consulting firm has just released a new edition of its annual report, focused on the Four Forces of Acceleration of the Insurance Industry

f Insurance is about a compensatory rebalancing of the scales in the event of a specific loss, data is the fulcrum that sustains it. The more accurate the data, the better insurance provisions there will be. In the Insurance world, this is axiomatic. NTT DATA has apprehended this fact, and provides analyses that broaden the horizons beyond traditional players - those assumed, thus far, to be the only players of any substance in such calculations. It may be said that traditionally, the potential data utilised by insurance companies has been quite reductionist in its scope, with methodologies defining rigid and restricted parameters, or ‘pools’ of interest, and generally focusing solely on the obvious forces of Insurance companies and now, Insurtechs. NTT DATA is challenging such assumptions by expanding these borders with a more holistic approach to data analysis, with an understanding that data pools are inadvertently (and vitally), connected to data streams, with the implication of abounding oceans somewhere in the informational distances. As NTT DATA launches its Insurtech Global Outlook 2022 Report, it focuses on ‘The Four Forces of Acceleration’, which expands the ambit of actuarial cause and effect, to including Insurtechs, Insurers and their Digital Garages, New Entrants and Tech 28

July 2022

Giants, and even Regulations, as part of Insurance Liquid Ecosystems. In its basic essence, NTT DATA’s main mission is to help its customers with their digital and technological transformations. “In other words, we support them in identifying and implementing the right technology as a pillar to transform their businesses,” says Carlos Ordóñez, Head of Strategy & Advisory at NTT DATA Insurance EMEAL (Europe, Middle East, Africa, and Latin America). NTT DATA is the 6th foremost IT Consulting Services provider in the world. Head of Insurtech, Richard Calvo says: “The sixth edition of our annual report,” (from hereon ‘the report’), “is the result of many years of learning and experience. We have evolved our originally, solely insurtechfocused report towards ‘The Four Forces of Acceleration’, because we have perceived that just by focusing on the investments in insurtechs, we could be too biased on the real and actual impact that other actors are also having on the Insurance industry.” The Insurtech Global Outlook 2022 Report’s Methodology The methodology of the report highlights its extent as well as its rigour. In the first phase, NTT DATA collected real-time data from over 4,341 startups, 1,076 Insurtechs, 203 insurers and investment arms, 46 Industry and Platform Giants and 25 Regtechs. This was sourced from both the public and the private sectors, additional to the information

$10,169,146,061

$6,364,150,864

$6,590,389,899

$2,229,743,156

$1,266,972,226

$2,130,986,592

$573,364,823

$279,609,748

$69,179,832

$35,910,614

$23,100,004

Insurtech Market Booming in 2021, but Are They Impacting the Industry? 2021 was certainly a prosperous year for the Insurtech ecosystem. Its global investment reached $10B, which represents a 38% increase from 2020. However, the number

of deals has decreased, which signals a consolidation of the market. Noteworthy is the sustained flourishing NTT DATA observed, both in terms of investment attraction by these startups, but also of the intensity of such investments by insurance companies and other players in the arrival of new models and new technologies into the industry. In fact, NTT DATA has identified a sort of ‘herd effect’ when it comes to investment in new business models, considerably multiplying the valuation of these companies and accelerating growth. Among these new product segments and applications for emerging technologies that seem to be leading the innovation in the sector, they have noticed the acceleration of digitisation, IoT (Internet of Things), freelancer models, Cybersecurity and the combination of Life and Wellness, which

$4,123,931,921

gathered through NTT DATA’s asset ‘inttrend’. Their team of specialists in the insurance sector then proceeded to study the four samples, and complement them with top insights based on market-analysis. The final stage consisted of a series of interviews with top Executives from leading insurance companies worldwide. Their perspectives and experiences allowed NTT DATA to build a more consistent and “in-thefield” vision of today’s market and a reliable foresight of the future, with real examples on how the Four Forces of Acceleration are indeed influencing the industry.

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450

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400

10000 358 322

329

+4B IPO

$10B

350 316

8000

316 Deals 300

250

228

6000

200 169

4000

150

102 2000

100

5 2010

0 2011

2012

2013

2014

2015

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Money Raised (MUSD) Number of Deals

Example of an image caption insurtechdigital.com

NTT DATA

“ WE SUPPORT OUR CLIENTS IN IDENTIFYING AND IMPLEMENTING THE RIGHT TECHNOLOGY AS A PILLAR TO TRANSFORM THEIR BUSINESSES” CARLOS ORDÓÑEZ

HEAD OF STRATEGY & ADVISORY, NTT DATA

appear to have grown more than the average rate within the insurance market. This new framework showed that the Full Stack Insurtech foundation has created space for specialised and complementary businesses that can widen the innovation space. This growth, moreover, is shown to be moving in two directions: an endogenous comparative growth between companies founded 10 years ago with those founded 5 years ago, and an exogenous comparative growth between Fintech and Insurtech companies. In regards to the latter, 2021 was marked by stock market correction movements in B2C neo-insurers, with a share-price plummeting of over 40%, while Fintech companies registered clear growth. This indicates that Insurtechs have grown too fast in recent years, but have kept a poor stock price performance after their IPOs (Initial Public Offerings), demonstrating little real impact and relatively low value creation or value perception in the market. Other companies that NTT DATA considers value chain disruptors, in comparison to neo-insurers, are those that complement the value generation of insurers under a B2B model, creating real innovation and ensuring long-term sustainability of their businesses. Innovation No Longer Comes Just From Silicon Valley: Europe Stands Out, Asia Remains Steady and LATAM Begins to Emerge Another very insightful fact is Europe’s dominance in the entire investment

July 2022

NTT DATA

Insurtechs in Europe concentration in 2021. Yet with fewer operations, the European continent has raised $1.2B in only three deals (such as Alan, Wefox and ManyPets - formerly Bought by Many), among which is the largest investment round in the year. This sets an indubitable turning point, in stark contrast to previous years’ leadership from North America. The growth of Venture Capital activity in Europe has grown more than three times, which has helped drive new models and attract investment from the insurance industry and Technology Giants in this region, hitherto neglected by the United States. The United Kingdom, Germany and France are the countries with the highest representation, although countries such as Israel, Spain, Switzerland, Denmark and Sweden are also gaining prominence. Magazine insurtechdigital.com Weblink in layers

CESVIMAP

ESVIMAP, the R&D Center for Road Safety of MAPFRE, is the engineering center and Mobility Lab within MAPFRE Open Innovation (MOI), its ecosystem for collaborative innovation. It is a technological center with a sound international reputation for its studies on the redesign, insurance, use, maintenance, repair and recycling of vehicles and other transport solutions using all types of vehicles from Personal Mobility Devices to trucks or autonomous vehicles. With a team of over 120 engineers and technicians, it helps the rest of MOI’s stakeholders build business cases where innovative solutions can be tested and later

introduced into the market under new policies and added-value services for customers. This involves testing IT technology to be applied to Usage Based Insurance (UBI), and AI applied to image evaluation and end-toend automatic processes, transforming the influence of Advanced Driver Assistance Systems’ performance and calibration on loss-ratio, into insurance ratings that impact policy pricing, studying auto cyber risks as a new and emerging threat and guiding MAPFRE in the evolution from car insurance to user-centric multimodal mobility insurance. Transforming batteries from wrecked electric vehicles into second-life Energy

José María Cancer, General Manager at CESVIMAP, explains their Value Proposition

July 2022

CESVIMAP

JOSÉ MARÍA CANCER TITLE: GENERAL MANAGER COMPANY: CESVIMAP

Storage Systems (to promote Circular Economy and to reduce carbon footprint) and measuring the accuracy and reactions of autonomous cars in real-life traffic environments are also part of CESVIMAP’s recent projects. Partners in several R&D projects of an international scope, CESVIMAP has also recently registered 2 new patents concerning safety and security around Personal Mobility Devices’ use and design. CESVIMAP's additional mission is to analyse these new mobility trends to reduce the risk they involve, contributing to the reduction of the negative effects of the automotive sector on society, offering innovative solutions to increase vehicle safety and reduce the human and financial consequences of crashes, enhance the efficiency in repairs and promote circular economy in workshops.

EXECUTIVE BIO

INDUSTRY: INSURANCE José María Cancer is the General Manager of CESVIMAP and Mob Lab Director within MAPFRE Open Innovation. He is also a Board Member in CESVIMAP, CESVI France and Audatex Spain. José María is a Professional Certified Engineer and holds a Master’s degree in Mechanical Engineering and Automotive Engineering. He has over 30 years of experience in the Automotive and Technology industries, having worked as Manager for leading companies such as Citröen, Hyundai and Lexus and has been a serial entrepreneur, receiving several awards. José María currently leads initiatives with Second Life applications with Li batteries from wrecked cars and with connected, autonomous, shared and electrified vehicle insurance policies. He has helped CESVIMAP obtain two registered patents, and received two public R&D grants for relevant research in the Auto industry.

Check out our 2022 report

From Insurtech to the Four Forces of Acceleration DOWNLOAD THE REPORTS

July 2022

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NTT DATA

NTT DATA’s vision: The End of the First Wave of Innovation in the Insurance Industry All the previous information NTT DATA gathered, allowed them to identify a resounding change in the Insurtech industry. While used to seeing a vertiginous and continuous creation of new Insurtechs since 2017, they have observed a continued and accelerated decline in the last two years, indicating an innovation exhaustion in the market. In addition to contextual aspects such as the outcomes of a pandemic situation which inevitably reduced interest in more emergent models, NTT DATA has identified two indicators that signal the end of the first wave of innovation. First, an increased competitiveness in models related to distribution, and second, still-incipient technologies that have not yet found enough use cases (e.g. blockchain), or the adoption and adaptation of the first impacts for the Industry to actually believe in these models. This, according to NTT DATA’s analyses, will begin to kickstart a second wave, characterised by the increased maturity of the aforementioned technologies and the collaboration of ecosystems that will bring competitiveness outside the natural area of the organisation, as well as open the path in investment towards these new scenarios.

RICHARD CALVO TITLE: HEAD OF INSURTECH COMPANY: NTT DATA INSURANCE EMEAL INDUSTRY: INSURANCE LOCATION: SPAIN

EXECUTIVE BIO

Richard is a graduate in PR & Communications from the University of Barcelona and with a master’s in management development and Business Administration and Management from ESADE Business School. He worked for 14 years in AXA Assistance, as Operations Manager, Key Account Manager, Business Analyst and Demand Manager and has experience in entrepreneurship and startups acceleration. Richard is currently the Head of Insurtech at NTT DATA Insurance EMEAL and Product Owner of the strategic initiatives Phygital and Smart Shipments with the mission of defining, developing, implementing and scaling the value proposition.

Insurers and their Digital Garages: Insurers Bet on Transformation Through Insurance-Related Startups According to NTT DATA, Insurers’ activity was also incredibly noteworthy. This presented a sustained increase of over 180% in startup investment, putting almost $18B into these companies in 2021. Although only $3B out of the total sum was directed to Insurtechs, they showed intense interest in startups

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that are linked to the Insurance Industry. Out of the $15B Non-Insurtech investment, almost 60% went to companies dedicated to Financial Services, Cybersecurity or Healthcare; three activities intrinsically linked to insurance. In this sense, there is not only a financial bet when investing, but insurers are seeking impact both on their organisations and on their customers. This aforementioned ‘herd effect’ and the drop in interest rates stimulated investment, making the bet less risky. In addition to investing in startups close to the sector – with the aim of improving their own value proposition – we see how insurance companies are also entering other industries in which they can grow in customer base and incorporate new margins, now easier – since these activities are all occurring at a time when other sectors are entering the Insurance industry. Digital, Hybrid and Embedded Distribution: A Mirror to Today’s Insurance Historically, the concentration of investments and the appearance of

2020

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43% Non Insurance Related

new models, entrants and technologies have always taken part in the Insurance distribution. 2021 has not been an exception and once again this part of the value chain has concentrated everyone’s interest. As opposed to the almost complete interest of insurers in Health in 2020, their investment this year went beyond the

“ THIS IS THE SIXTH EDITION OF OUR ANNUAL REPORT, AND THEREFORE IS THE RESULT OF MANY YEARS OF LEARNING AND EXPERIENCE” RICHARD CALVO

HEAD OF INSURTECH NTT DATA insurtechdigital.com

NTT DATA

Global Trusted Innovator

Carlos Ordóñez and Richard Calvo introduce NTT DATA's Insurtech Global Outlook 2022 Report

“ OUR REPORT FOCUSES ON WHAT WE CALL THE ‘FOUR FORCES OF ACCELERATION’, WHICH CONSISTS OF: INSURTECHS, INSURERS AND THEIR DIGITAL GARAGES, NEW ENTRANTS AND TECH GIANTS, AND REGULATIONS” CARLOS ORDÓÑEZ

HEAD OF STRATEGY & ADVISORY, NTT DATA

July 2022

sanitary crisis. Insurers have proven to invest in Insurtechs within the Commercial line of business, and in business models related to distribution, especially those that leverage Embedded Insurance. They want to package their products in other industries where they are seeking to position themselves and have access to a much wider customer base. If there is one thing that NTT DATA wants to highlight, it is that regardless of the great threat of technologies, entrants and models - there is no current replacement model, but rather a model of coexistence and competition. In the distribution market, despite being something to consider at a regional level (and even on the level of country and city), NTT DATA recognises that the role of the agent is still key, and predominant, as is the need to simplify and interact with customers in digital channels.

NTT DATA

NTT DATA’s Vision: Insurers Do Believe in the Power of Insurtechs as Sources of Innovation and Expansion Either by investing or partnering with them, insurers appear to understand the impact of Insurtechs in the industry as enablers of disruption, and they have come to this conclusion without the lead of any other player, such as Tech Giants. Although they show a little bit of resistance when it comes to Insurance-related companies, preferring consolidated businesses, insurers are increasingly putting money into new business models and growingly opting for early-stage startups. However, they do so only to improve their own value chains, therefore investing overwhelmingly in companies linked to their markets.

TITLE: HEAD OF STRATEGY & ADVISORY COMPANY: NTT DATA INSURANCE EMEAL INDUSTRY: INSURANCE LOCATION: SPAIN

EXECUTIVE BIO

New Entrants and Tech Giants: Industry vs. Platform Giants According to NTT DATA, analysing the impact of New Entrants is not only limited to Technology Giants. They have segmented their analysis into two groups in order to achieve a more accurate and real picture of these players. First, they have what they refer to as Industry Giants, which are big Corporations that are leading a specific industry and where they could find names such as Tesla, Toyota and Daimler (in Auto) or GSK and Roche (in Pharma). On the other hand, they have the Platform Giants, which lead digital platforms for activities such as distribution, where they could highlight some such as Amazon or Tencent, sales, with examples such as Salesforce, or pure technological platforms for creating new products and services, such as the cases of Alphabet and Facebook. In 2021 they saw that Industry Giants invested around $27B in startups and Insurtechs, while Platform Giants, also

CARLOS ORDÓÑEZ

Carlos is a graduate in Telecommunications Engineering with a Master's in Business Administration and a Management Development Diploma from IESE Business School – University of Navarra. He's an executive with more than 20 years of experience in insurance and the digital world, having spent 13 years working at AXA Group in technology and processes management in Spain and Latin America. In 2010, he created and ran a global digital innovation center for AXA Group. After this stage, he led the global digital transformation of MAPFRE Group. Currently, Carlos is the Head of Strategy & Advisory and Innovation & Product at NTT DATA Insurance EMEAL, leading the client advisory practice to enhance decision-making, drive process improvements and develop innovative technologydriven solutions tailored to business needs.

NTT DATA

denominated as Tech Giants, funded almost $460B. This latter’s overall investment in Insurtechs registers around $3B between 2020 and 2021, positioning themselves as the third most important group of investors in Insurtechs, increasingly closing the gap with insurance companies.

services, Analytics, SaaS or AI computing platforms. In this regard, Tech Giants are seeking monetisation of their own technologies by investing in or partnering with startups. Furthermore, they are complementing their technologies, products and services ecosystems and enhancing their innovation power by absorbing more startups into their Ecosystems.

Tech Giant’s Logics: Distribution and SMEs as Top Priorities for Investing, but Also Partnering with Insurtechs The impact of Tech Giants in Insurancerelated startups is low when compared to Non Insurance-related startups. However, it is a comparatively large portion of the total investments received by Insurance-related startups. By these latter, NTT DATA includes businesses linked to the Automotive, Healthcare, Financial Services, Home and Cybersecurity markets, given that 18% of Tech Giant’s total investment is allocated in these sectors. Tech Giants also proved to have a potential role as providers of Insurtech's needs in terms of Big Data analytics, Cloud

The Case of Tesla Tesla’s case is significantly highlighted for NTT DATA, as their approach to the Insurance industry strongly resembles that of a traditional insurance company. Tesla has launched an Insurance policy in Europe, along with Insurtech Qover as enabler, and Helvetia as subscriber-insurer, in addition to Van Ameyde as claims and mechanic’s shop provider. According to NTT DATA’s vision and interpretation of their data analyses, Tech Giants are closing the gap with Insurers for the leadership of the industry. However, they stress the fact that Tech Giants do not 18% Insurance Related industry Tech Giants Investments

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July 2022

82% Non-Insurance Related industry Tech Giants Investments

NTT DATA

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want to compete or substitute insurance companies in the Insurance ecosystems, but do want to participate in the ecosystem, in parts of the Insurance value chain where they can get the margins expected and where they can play a relevant role, providing additional value for their own clients. Regulations as the Motor for Innovation in the Insurance Industry The insurance industry is one of the most regulated in the world. Although it can be perceived as an obstacle to progress on many occasions, regulation is a key factor. When Technology, Insurance and Regulation come together, new possibilities and benefits are born for all actors involved, especially at a time of important and accelerated change. Regulation is also trying to adapt to these new times and, above all, to the speed and magnitude at which these changes are reaching different industries. Regulatory Sandboxes, Regtech companies and the like, are here to stay. With regards to the former, more than 60 Sandboxes have

2019

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Planning

been created in the past six years worldwide, which not only represent a possibility for adapting to technological innovations with the corresponding regulatory compliance, but also shows a consolidation of these test spaces in the Insurance Industry. Likewise, Regulatory Sandboxes ease the adaptation of businesses to the constant regulatory framework modifications, complying with new demands and competitiveness. DORA, IDD, IFSR or GDPR are just some of the ever-changing and constantly growing directives and regulations that insurers must take special care of. In a journey that gets closer and closer to the era of Open Insurance, compliance is a must. According to NTT DATA, regulations should no longer be understood as a source of control, as it has traditionally been perceived, but on the contrary, regulatory legislation has become a facilitator and an impulse for huge innovations in the industry.

insurtechdigital.com

INSURANCE

AUTOM INSURA

July 2022

MATION IN THE ANCE INDUSTRY

We take a look at how automation technology has transformed the insurance industry WRITTEN BY: ALEX CLERE

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Business-led and cloud-forward transformation. Meet a new kind of digital transformation that helps drive value for insurance organizations faster. Learn more

© 2022 PwC. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

espite being seen as a slow-mover, the insurance industry has embraced automation in the last few years, with benefits felt on both sides of the transaction process. Gone are the days when insurers could afford to manually onboard new customers, check their documentation, provide them with quotes for new policies and review each claim as it comes in. Automation allows companies to speed up required background checks such as anti-money laundering; improve the accuracy and reduce time taken for claims to be processed; build a clearer, holistic view of the risk associated with any single policy; and deliver a cleaner, more instant experience to the consumer regardless of the touchpoint. Jeffrey Skelton, MD Europe for LexisNexis Risk Solutions, explains: “The insurance

INSURANCE

“ INSURANCE WILL SHIFT FROM ITS CURRENT STATE OF ‘DETECT AND REPAIR’ TO ‘PREDICT AND PREVENT’, TRANSFORMING EVERY ASPECT OF THE INDUSTRY” MCKINSEY

Intelligent automation solution for insurance claims with IBM Cloud Paks

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INSURANCE

sector has made great advances in automation, driven by customer demand for a swifter, more streamlined experience from quote through to claim. The pandemic certainly accelerated this – for example, in lockdown, digitised proof of no claims discounts became essential, as did virtual claims handling. The ease with which insurance providers can ingest data into their quoting, pricing and claims processes is key. You need the right data at your fingertips to make accurate decisions quickly.” There will be no let-up in digital acceleration as we emerge from the pandemic. According to research from Insider Intelligence, the tech spend of property and casualty (P&C) insurers plummeted in recent years, with insurers having to absorb Covidrelated disruption to their revenues. But it will rebound over the next two years as insurers “strive to digitise their businesses and leverage emerging technologies to enhance their customer experience”. Better data, smarter devices At the heart of this surge in automation will be a better use of data all round. That includes more data collected from both the customer and other insurance industry stakeholders, but also a shrewder approach to the data that insurers already hold. As McKinsey puts it, “insurance will shift from its 46

July 2022

current state of ‘detect and repair’ to ‘predict and prevent’, transforming every aspect of the industry in the process”. One exciting way this can be done is through greater utilisation of connected devices. “Connected devices offer huge potential for automation,” Skelton says. “Smart devices can already detect the escape of water to help identify a problem before it becomes a huge loss. Crash notifications from the connected car will become a key element of first notification of loss (FNOL), enabling insurance providers to see granular data on the circumstances

“ AUTOMATION CAN ALLEVIATE THE OPERATIONAL INEFFICIENCIES CURRENTLY PRESENT WITHIN INSURANCE” MIKE CHIARAMONTE

NORTH AMERICA INSURANCE LEAD, PUBLICIS SAPIENT

INSURANCE

of the claim. All this should have the effect of reducing risk and speeding up claim settlements.” Mike Chiaramonte, North America insurance lead for digital consultancy Publicis Sapient, adds another example: “Within claims processing, automation can allow for a seamless transition from FNOL to the pricing of the claim and, finally, to the closeout of the claim. For example, a cargo shipping container may now contain a connected device that can alert the insurer when the temperature of the container has dropped and the goods are at risk of loss. This automation is driven by the interconnectedness of devices and platforms used by customers. “Within underwriting and risk assessment, the use of predictive modelling can identify, validate and prepare critical underwriting variables. The risk assessment process then becomes an iterative, continually refreshed, process as the external and internal datasets used can create a dynamic risk assessment environment.” Will automation lead to fewer jobs? As insurers face the prospect of handling more data, automation – particularly robotic process automation (RPA) – will become crucial. Automation has allowed many claims processes to become more efficient, from the use of images

for validating claims to automated settlements that don’t require a human claims handler. “There is always a balance to be achieved between automation and ensuring the human touch is not lost when it’s most needed by the customer,” says LexisNexis’ Jeffrey Skelton. “The obvious area to consider for greater automation is claims, because this is the shop window for the market and ultimately why we buy insurance. Insurance providers are always looking at ways that processes could be made smoother and less prone to friction without opening up the market to fraud. “We believe there is a very real opportunity for greater automation in claims if insurance providers used data insurtechdigital.com

INSURANCE

enrichment to validate the claimant’s details, understand their claims history and answer some of the questions they may ask at first notification of loss – such as information about the home or the car. That means the claims handler’s time could be focused on obtaining some of the details that could only come direct from the claimant and on ensuring they receive the support they need at a stressful time.” Publicis Sapient’s Mike Chiaramonte continues: “Automation can hopefully drive the alleviation of operational inefficiencies currently present within insurance. In order to alleviate these operational inefficiencies, processes such as AI and RPA will need to be fully integrated into the operations. For example, a claims adjustor can focus their efforts on high-complexity claims as the more simplistic claims will be handled by automation. Another example may be that policies can be dynamically priced so that, instead of being renewed every 6 months, they can be renewed every 6 hours.” Will this mean that process automation inevitably leads to redundancies? Not necessarily. Instead, it will free employees from repetitive manual tasks and allow them to concentrate on parts of the insurance lifecycle that still require a human touch. “Insurance company employees are very good at the job they do today, but they will need to be even better at this job in the future,” says Chiaramonte. “As automation removes the redundancies of repeatable tasks, individuals will need to be able to focus on complex tasks that require their deep expertise as well as empathy and understanding. Automation will augment the role of the individual rather than replace the role of the individual.” 48

July 2022

INSURANCE

“ THERE IS ALWAYS A BALANCE TO BE ACHIEVED BETWEEN AUTOMATION AND ENSURING THE HUMAN TOUCH IS NOT LOST” JEFFREY SKELTON

MD EUROPE, LEXISNEXIS RISK SOLUTIONS

insurtechdigital.com

PEKIN INSURANCE

PEKIN INSURAN TRANSFO INSURANCE I

WRITTEN BY: JOANNA ENGLAND

July 2022

PRODUCED BY: JAKE MEGEARY

NCE LEADING ORMATION IN THE INDUSTRY insurtechdigital.com

PEKIN INSURANCE

Amy Bingham, VP and CIO of Pekin Insurance, tells us about digital transformation and app development in the world of insurance

ne of the longest-established insurance companies in the US, Pekin Insurance was founded in 1921 and has recently celebrated its centennial anniversary. Originally launched as a solution to pre-war automobile insurance, the company has grown and expanded its offerings into the P&C market. More recently, it has been tasked with the challenge of digitally transforming its business processes, as well as introducing lean and agile principles to its IT operations. With a robust culture of progression and innovation, Pekin Insurance has made extraordinary progress in this journey, driving forward new IT initiatives while also launching cutting-edge products and services. Bingham joined the company in late 2021, taking on the role of VP and CIO. Her responsibilities include managing the dayto-day operations of the IT department at Pekin Insurance. She partners closely with the business to deliver on the key outcomes and priorities, in alignment with Pekin Insurance’s strategic goals and objectives. With an impressive career prior to joining Pekin Insurance, Amy spent 21 years with the number one P&C insurer in the United States: “With all this experience in IT throughout my career journey, I've been very intentional in pursuing opportunities that really broaden my experiences, exposing me to new facets of IT and the organisation

July 2022

Example of an image caption insurtechdigital.com

PEKIN INSURANCE

Pekin:Title Leading digital change of the video in the insurance industry

as a whole. As a result, I developed a real breadth of experience across IT.” She led delivery efforts across product lines and has extensive experience in test management. She also led in the IT risk and compliance area, partnering closely with information security. Another area of expertise is leading in the infrastructure space and managing two very large data centres in the United States. Later on, Bingham led technology initiatives in sales and marketing – another aspect that has provided her with specialist knowledge of the customer service environment. She says: “When I think about my background, I've been very intentional to really take my career down the path of exposing me to a wide breadth of experience across IT. And I think that's positioned me very well as I've come to Pekin Insurance to lead in the CIO role. I feel that the IT employees here really appreciate the broad 54

July 2022

“ I really want to increase our focus on digital capabilities, improving customer self-service as well as improving overall user experience and ease of doing business” AMY BINGHAM

VICE PRESIDENT AND CHIEF INFORMATION OFFICER (CIO), PEKIN INSURANCE

spectrum of experience that I bring, and they see me really being able to relate to their roles and their work.”

PEKIN INSURANCE

1921

Year founded

800+ Number of employees

PEKIN INSURANCE LEADERS Michael Walsh, Divisional IT Director, Pekin Insurance on Culture & Employee Engagement: “Pekin Insurance IT has been very fortunate to have a team that has always been able to have an open mind to new ideas and is willing to reinvent themselves in order to provide the very best services to our business and insureds. “Part of the magic of Pekin Insurance IT is the teams’ ability to weather new challenges and give consistent feedback on how to improve team engagement. The ability to stay engaged and keep communication channels open, from employee to leadership level, allows for issues to be tabled and resolved honestly and collaboratively.”

DID YOU KNOW...

Transforming a leading legacy company into the digital insurance space With its dynamic and forward-thinking team, Pekin Insurance has experienced a radical digital transformation journey over the past few years. Its newest offerings include a life insurance product that can be issued automatically with zero human touch – an impressive feat when life insurance is one of the most difficult products to translate into a digital solution. “The life company just implemented the first instant issue application that uses rules-based underwriting and e-signature capabilities for a zero-touch experience. And that's really exciting on our journey from more of a legacy-based system to a more digital environment,” says Bingham. Another priority initiative Pekin Insurance is embarking on is the migration of the Guidewire platform into Guidewire's cloud SaaS solution. Guidewire is a leading partner of Pekin Insurance and has been instrumental in the company’s transformation. “After our initial investment in the implementation of Guidewire, we were finding it difficult to really stay on top of those product releases due to staffing constraints and the need to focus on delivery of other priority business initiatives. So as a result, we were missing some of the

opportunities of enhanced functionality that were being offered in the more recent Guidewire product releases.” Guidewire and ValueMomentum both became key integration partners on a plan that's going to enable a full migration to the Guidewire cloud platform. “We're starting on this journey now with plans to complete the migration in Q1 of 2023. And with this migration to a full Guidewire SaaS solution, we're going to realise several opportunities. I look forward to collaborating with our business partners to investigate this enhanced functionality, which includes the ability to seamlessly make changes to underwriting and validation rules without time-consuming deployments. It will enable configuration approaches that insurtechdigital.com

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ValueMomentum: Positioning P&C clients for the digital age Jim Carlucci, EVP, Insurance Business Unit, discusses ValueMomentum’s approach as IT service providers and the partnership with Pekin Insurance Founded in 2000, ValueMomentum serves 10 of the top 25 P&C insurance groups and over 75 P&C (property and casuality) insurers in the US, placing them in the top 10 IT service providers in this segment. Since its inception, the company has grown organically to nearly 5,000 associates in 2022. “We support our insurance customers in their ongoing journeys to transform their technology from product-centricity to customer-centricity, achieving segmentation strategies, and in forming or participating in ecosystems that protect their target segments from operational risk in addition to financial risk. While supporting their growth initiatives, we help build their enterprise digital platforms with modern core, personalised experiences, modern data platforms, intelligent automation and infusing speed and agility in their IT,” says Jim Carlucci, Executive Vice President of the insurance business unit. “We relentlessly focus on customer needs and success above all else, endeavouring to add value to every initiative with relevant skills, experience and advice, which we leverage from our experiences of hundreds of engagements with insurers.

Focusing exclusively on the needs of insurers, we’ve achieved higher reuse and utilisation of our knowledge, skills, and assets,” he adds. Major partnership with Pekin Insurance ValueMomentum’s relationship with Pekin started in 2015, at the start of Pekin’s comprehensive transformation journey. “We’ve worked with them on numerous initiatives involving digital, data, and core modernisation. As one of our critical customers, we’re very proud to have them, and serve as a strategic IT partner, not just an execution partner.” As Pekin expands into new geographies, ValueMomentum will continue to facilitate Pekin’s upgrading of core platforms and systems to the cloud. “We’re fortunate to execute against a cohesive strategy, positioning them for the digital age, achieving product specialisation, speed, and agility, and the support of their customers alongside ongoing growth,” says Carlucci.

PEKIN INSURANCE

will constantly improve the user experience and ease of doing business for our agents, our employees, and our policyholders.” Utilising the Guidewire ecosystem Pekin Insurance will use Guidewire's ecosystem and insurtech integration partners to advance its claims technologies and create a more streamlined experience. The company also has plans to leverage Guidewire's claims analytics, which will allow the optimisation to and improve its process automation functionality with things like subrogation identification, injury severity escalation, total loss determination, and payment approvals. 58

July 2022

Bingham is enthusiastic about the move, which she predicts will be a key element of the company’s digital journey. “These are all new opportunities that we're going to have the ability to explore as we make this migration into Guidewire's cloud,” she says. A culture of opportunity within IT While many legacy companies are struggling to embrace the new digital processes, Pekin Insurance has been an enthusiastic adopter of new innovations. The key is in the culture and core values, which are centred on nurturing talent and providing opportunities. This is one of the aspects that attracted Bingham to Pekin Insurance in the first

PEKIN INSURANCE

“ Specifically, we're partnering with ValueMomentum on geographic expansion”

AMY BINGHAM TITLE: V ICE PRESIDENT AND CHIEF INFORMATION OFFICER (CIO) INDUSTRY: INSURANCE LOCATION: ILLINOIS, USA Amy Bingham is Vice President and Chief Information Officer (CIO) of Pekin Insurance. With over 20 years of Information Technology (IT) experience in the insurance industry, she has led several digital transformation and modernisation initiatives and has IT leadership experience across application development, infrastructure, and IT risk and compliance. She is an expert in Agile and project and product management disciplines and has extensive experience leading the development and implementation of internal, customer, and agent-facing software applications. Amy is also passionate about coaching, mentoring, building relationships, and developing Information Technology professionals.

AMY BINGHAM

place, as she explains: “One of my passions – and likely top-of-mind for every CIO in today's industry and climate – is really that of employee engagement and overall company culture. “Pekin Insurance is not exempt from the challenges most CIOs and organisations are facing, as it relates to attracting and retaining top IT talent. But I really see a great strength of Pekin Insurance IT is that our workforce has always been willing to give feedback and participate in the ideation process to improve our team engagement and our culture. “With that feedback, it then becomes leadership's responsibility to build out the tactical and strategic initiatives that are going to engage our workforce, attract and retain the talent, and continuously develop and upskill the workforce to meet the challenges of the future. This is a key focus for me as I step into the role of CIO for this year and beyond.” One of the first steps in this strategy is to create employee engagement focus groups. Bingham is a big believer in employees being a part of the solution as it relates to improving the culture and employee

EXECUTIVE BIO

VICE PRESIDENT AND CHIEF INFORMATION OFFICER (CIO), PEKIN INSURANCE

When they need you most. Be there.

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Here’s How

Enabling insurers to foster better conversations with customers Smart Communications is helping insurance companies to improve customer engagement thanks to its leading conversation platform, The Conversation Cloud™. There’s an oft-repeated sentiment in the insurance industry: nobody takes out insurance cover for the love of making a claim. When a customer needs to submit a notice of claim, there’s a loss that has occurred – a bereavement, a vehicle out of action, a family home razed to the ground. “Often the claim is the first interaction with a policyholder and it can be a make-orbreak moment,” says Ruth Fisk, VP Insurance Strategy for Smart Communications. “Claims professionals must juggle the many expectations of today’s consumers. They must be able to balance the right approach for the customer as an individual with personalisation proving key to the interaction, but they also must be able to deliver messages via a customer’s preferred channel.” Although insurers are making progress towards better digital experiences, consumers bring expectations from the outside in. They want customer-centric service, a responsive claims agent, and the same level of simplicity and personalisation that they get from Netflix and Uber.

Fisk explains: “Nowadays, we can get nearly anything we want at the touch of a button except, perhaps, most insurance products. Legacy applications and age-old practices have made it challenging for insurers to make it simple and quick for consumers to purchase insurance cover or to pay a claim. This often prohibits them from delivering rich and sustainable customer experiences, hampering their ability to attract and retain new business.” There’s no better time for insurers to accelerate change. Smart Communications’ conversation platform, The Conversation Cloud, empowers insurance carriers to create consistent and engaging experiences with their customers. It’s trusted by more than 250 insurance companies to enable smarter conversations and realise digital transformation at scale. The Conversation Cloud empowers insurers to transform their core operational functions across policy, billing and claims. It enables them to connect with core systems like Guidewire’s InsuranceSuite, increasing efficiency and improving user experience. And it utilises e-signature platforms like DocuSign and OneSpan to create a seamless, end-to-end connected experience – even in the parts of the claims journey that insurers thought were too difficult to improve.

Learn more

PEKIN INSURANCE

PEKIN INSURANCE ON PARTNERSHIP WITH SMARTCOMMUNICATIONS

DID YOU KNOW...

Randy Dray, Assistant Vice President – IT: “The Smart Communications solution has allowed us to scale our business by enabling the creation of electronic policy packets for e-delivery from our rules-based, instant-issue engine. “The Smart Communications communication platform has provided us with the ability to offer our customers options on document delivery. Customers can opt to have the documents electronically delivered or printed. Additionally, we store all documents in a repository for fast, secure, and reliable retrieval for our Customer Service Staff."

Monica Kemper, Underwriting Support Services, Pekin Life Insurance Company: "Smart Communications has allowed us to modernise our policy creation service on Term, Transitional, and Final Expense Products by automatically consolidating all needed corresponding material into one single policy packet and eliminating our old manual processes.”

July 2022

engagement. The focus groups will enable Pekin Insurance employees to generate and sponsor ideas to improve the company culture and employee engagement. The aim for that improved level of input to lead to even more innovation. “We're going to continue to increase our focus on innovation, which we all know is key to attracting and retaining top talent. We're looking at things like hosting innovation events, hack days, and making innovation part of the DNA here at Pekin Insurance. I also want to increase our focus on development for our IT employees. We know that is critical to employees remaining satisfied at work and staying relevant in the industry.”

PEKIN INSURANCE

Taking care of talent One area of focus will be enhanced career-pathing through a talent pipeline so that employees see themselves having opportunities to grow in the organisation. Pekin Insurance is also creating an IT operating model that's product-centric, with an aim to increase IT and business engagement as well as partnership, while at the same time promoting flexibility and efficiency. Making the most of skills and providing new opportunities for talented staff are, she says, of paramount importance. “We often hear from employees that they're really stretched across multiple priorities and they want a say in decision

making, as it relates to their work. This model is going to foster significant improvements related to those employee concerns. This year and in the years to come, we're going to be very intentionally focused on improving employee engagement and developing a value proposition. I want Pekin Insurance IT employees to truly see our company as the employer of choice.” Building a robust IT culture Ensuring a business has a strong talent pool is not the only challenge facing insurance companies that are in the midst of a digital transition. Creating a more robust, productfocused approach to its IT culture is also

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a critical element. Pekin Insurance is a mid-sized company – but it has invested and pursued key product management principles such as user experience, design thinking, and a continued focus on agile practices and maturing those practices. “My vision is simply to take this to the next level, to create an organisational structure that really supports product management, introduces and fosters dedicated teams, and brings more empowerment and decision-making to those teams. This is all going to be done in concert with the business to ensure the creation of better partnerships and that we're solving the right business and customer problems with clear business outcomes in mind.” Digital strategy and expansion Making core changes within any company is a challenging process. But Pekin Insurance 64

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is also driving an expansion strategy alongside a digital transformation. This means it is entering new marketplaces and creating new products and services while streamlining its internal operations. Bingham is enthused with the process and is clearly relishing the challenge. “It really is an exciting time at Pekin Insurance, because we are embarking on a multi-state geographic expansion, initially focusing on our commercial lines of business. Our first state expansion will go live later this year. We're implementing a repeatable process here in IT to continue to roll out additional states annually until we reach our expansion goals. “The Guidewire platform has well positioned us to quickly make the technology changes that are needed to enable this expansion. Additionally, ValueMomentum is our key integration

PEKIN INSURANCE

partner in this geographic expansion. We've partnered with ValueMomentum to stand up a persistent team, primarily made up of offshore resources to support the expansion in a very cost-effective and flexible way.” With this persistent team model, Pekin Insurance is funding the team and not a specific scope of work or timeline. This will allow Pekin Insurance to scale at its own pace alongside the rollout. It's essentially a flexible model that is enabling the company to quickly respond to any risks it encounters as it grows – which means the speed of expansion can fluctuate according to the climate.

“ We're starting on this journey now with plans to complete the migration in Q1 of 2023. And with this migration to a full Guidewire SaaS solution, we're going to realise several opportunities” AMY BINGHAM

VICE PRESIDENT AND CHIEF INFORMATION OFFICER (CIO), PEKIN INSURANCE

“If we decide to accelerate our expansion, we're going to have the ability to easily ramp up this team to increase the pace. This geographic expansion is truly a catalyst in meeting our company's strategic growth goals. And I couldn't be more excited to be a part of this exciting journey here at Pekin Insurance,” Bingham says. Successful technology partnerships A large part of Pekin Insurance’s transitional success has been due to the strategic partnerships the company has formed. Bingham is swift to point out the benefits that have been reaped by collaborating with technology providers deemed the perfect fit for Pekin Insurance’s growth strategy, saying: “ValueMomentum really has been our key integration partner as we've gone on this journey with Guidewire. “We’re heavily leveraging ValueMomentum while continuing to mature our digital transformation journey and our integrations with insurtechdigital.com

PEKIN INSURANCE

“ This geographic expansion is truly a catalyst in meeting our company's strategic growth goals” AMY BINGHAM

VICE PRESIDENT AND CHIEF INFORMATION OFFICER (CIO), PEKIN INSURANCE

July 2022

Guidewire. We've partnered with them closely to develop models that are very flexible with what we need in our continued maturation journey. They've been very good partners in strategising and aligning us with the capacity and support that we need to continue to support this journey. Pekin Insurance is also implementing Workday financials for its new accounting system. They are migrating from a very manual spreadsheet-based accounting platform to Workday financials, which is a much more robust, integrated solution. ValueMomentum has played a key role in enabling this key initiative. Outlook for the future With so many irons in the fire, Pekin Insurance is set to have a very busy few months ahead

PEKIN INSURANCE

as it completes its digital transition to Guidewire’s cloud platform and launches numerous new products and services. Data is foundational to the insurance industry. The more data Pekin Insurance can leverage to inform business decisions, the more it can capitalise on data-driven advancements, including machine learning and artificial intelligence. This will streamline processes and provide critical data insights to inform key business decisions. The other trend and key area in insurance focuses on customer experience and ease of doing business. Pekin Insurance is making this an imperative as it moves forward and is placing customer centricity at the forefront of success for its organisation. Bingham says: “This year's really all about laying the foundation, putting the proper

organisational constructs in place, improving our development and our delivery practices here in IT. Additionally, we need to deliver our key strategic priorities, including our state expansion and migration to Guidewire SaaS. She adds: “As I look to the next year, I really want to increase our focus on digital capabilities to improve customer self-service, as well as the overall user experience and ease of doing business. Like every organisation, we must increase our focus on data and data strategy to ensure we have the right architecture in place, that we're leveraging data insights and analytics capabilities to improve our processes and inform key business decisions.”

insurtechdigital.com

DIGITAL TRANSFORMATION

WRITTEN BY: ALEX CLERE

We take a look at the pace of digital transformation within a traditionally legacy-driven industry

DIGI T R A N S F O R M AT IN INSURAN

I TA L TION NCE

DIGITAL TRANSFORMATION

egacy systems have long been a problem for insurance providers. The idea of moving customer data away from incumbent systems, many of which are decades-old, is a daunting prospect for most insurers.

Something has changed in the last couple of years, however, with the pandemic forcing the hand of many companies and bringing about wholesale change in attitudes. According to KPMG’s 2020 CEO outlook, published in August 2020, 85% of CEOs surveyed said that the pandemic had accelerated digitisation in their operations, as well as the creation of nextgeneration operating models. Almost 80% agreed that COVID-19 had hastened their implementation of more seamless digital experiences. And yet, for many leaders, the biggest obstacle to digitisation was never technical – even when they thought it was. Almost 4 in 10 CEOs cited a lack of insight into future operational scenarios as their biggest digitisation challenge, followed by nearly 3 in 10 CEOs who said it was related to difficulties in making quick technologyrelated decisions across their business. This is reflected in a report from IBM, published in December 2020, which found that a COVID-related culture shift was allowing insurers to break free from prepandemic hesitancy. “Before the pandemic, many organisations seemingly distrusted their own technological capabilities and doubted the skills of their own workforces,” IBM said. “Yet, in the blur of pandemic-induced reactions, those anxieties proved largely unfounded.”

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DIGITAL TRANSFORMATION

Consumer expectations have changed COVID-19 completely changed the landscape for insurers. First, workers confined to their homes needed access to data and systems almost overnight, as well as the ability to conference and collaborate with colleagues. Then consumers became more demanding, driven by better digital experiences that they encountered in more agile industries, such as food delivery and online streaming. Laura J Hay, global head of insurance for KPMG International, says: “Customer patience and loyalty has worn thin. With lots of digital competition now in the market, customers have become increasingly willing to reconsider their insurance options.” Prior to the pandemic, reluctance to embark on digital transformation programmes was not just affecting customer experiences –

“ B E F O R E T H E PANDEMIC, MANY ORGANISATIONS SEEMINGLY DISTRUSTED THEIR OWN TECHNOLOGICAL CAPABILITIES AND DOUBTED THE SKILLS OF THEIR OWN WORKFORCES” IBM insurtechdigital.com

DIGITAL TRANSFORMATION

it was also hampering larger insurers in pursuing growth through M&As. Paul Richmond, product manager at insurance software provider Novidea, tells us: “Legacy systems have long been a major issue in the M&A landscape, as integrating different systems has previously proved nigh-on impossible, with some major brokers still operating on multiple, siloed legacy systems today following years of acquisitions, with the huge inefficiencies and issues that this brings. “Improvements in cloud-based technologies and digitalisation have largely removed this issue in the M&A space, enabling the swift integration of the acquired parties' data to accelerate and enhance management information, whilst unlocking the efficiency gains shareholders expect to see.” Are incumbents moving fast enough? Richmond adds: “Looking at the London Market speciality space, the speed at which incumbents have switched has often related to their legacy issues, as well as the need to align with Lloyd’s Blueprint Two, despite its setbacks. The understanding of the need for change is there, but much remains to do. “The processes and risks in the retail/ SME space are usually less complex, and customers are also more expectant of change. Because of this, new entrants and forward-thinking firms are pushing the boundaries of what’s possible such as integrated self-service portals and other online solutions.” Despite the progress already made towards digitisation, there is still much work left to do before the insurance industry can claim to be fully and truly digital-first. 72

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“ C O M P A N I E S SHOULD BE STRIVING TO MOVE AS MUCH HIGH - VOLUME, LOWERCOMPLEXITY BUSINESS TO A DIGITAL SELF-SERVICE MODEL” PAUL RICHMOND

PRODUCT MANAGER, NOVIDEA

He continues: “In the speciality market, where risks are more complex, the need for human interaction and relationships will remain for many years to come. Digital here is about providing better connectivity to trading partners and using real-time data to enable better risk and operational management. “In the retail and corporate markets, companies should be striving to move as much high-volume, lower-complexity business to a digital self-service model so they can focus on the high-net-worth and more complex risks, which the market manages so well through personal

DIGITAL TRANSFORMATION

insurtechdigital.com

“ W I T H L O T S O F D I G I T A L COMPETITION NOW IN THE MARKET, CUSTOMERS HAVE BECOME INCREASINGLY WILLING TO RECONSIDER THEIR INSURANCE OPTIONS” LAURA J HAY

GLOBAL HEAD OF INSURANCE, KPMG

July 2022

DIGITAL TRANSFORMATION

The future of digital transformation in insurance Research from PwC published last year identifies three key areas of improvement when it comes to digital transformation in the insurance industry. The report states: “First, insurers agree on the high strategic relevance of digital transformation for their company’s success, but they’ve been struggling to unlock its full potential. As COVID-19 continues acting as an accelerator, however, their momentum toward adopting more digital capabilities at scale is expected to increase. “Second, past investments into digital self-service platforms and robotics process automation (RPA) have proven to be successful. Therefore, budgets have shifted to account for new use cases in the field of artificial intelligence (AI) and to unlock additional potential from data analytics – especially as it relates to automating and accelerating claims processes and customer service. 5 out of 6 insurers expect AI to be a core part of the way they provide services over the next 3–5 years.

interactions. That element will never change, I hope. “Giving customers multi-channel choices will be important, whereby they can engage with insurers and brokers in different ways at different times. For instance, a customer may be happy to use a self-service portal to change a policy address, but when a major flood hits the house they will want to speak to a real person to resolve the claim.”

“Third, insurers acknowledge that they need new ways to enable change within their workforce in order to foster a truly digital mindset within the organisation. While insurers are deploying new technologies with some impact, they are reporting lower emphasis on keeping the organisational setup aligned with technological change. The greatest hurdle for an insurer on its way to become a digital organisation is change management. Companies must make structural changes to secure the sustainable impact of their new technologies and upskill their workforce, often by closing digital skill gaps through collaborations with tech firms.” insurtechdigital.com

GROUPASSUR

WRITTEN BY: JOANNA ENGLAND PRODUCED BY: JAKE MEGEARY 76

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Fostering innovation through technology insurtechdigital.com

GROUPASSUR

GroupAssur ’s CIO, Frederic St-JeanMercier, talks digital transformation, technology stacks and the ecosystem

fter 20 years’ experience in the technology industry – 15 of which have been spent in the financial and insurance sectors – Frederic St-Jean Mercier has relished the challenges presented by his most recent role as CIO at Canada’s most respected MGA. GroupAssur was founded in 1993, servicing the specialised insurance needs of brokers and customers across Canada. The company provides underwriting services for complex insurance policies on behalf of Canadian insurance carriers, international insurance carriers, and Lloyd's of London insurance syndicates. Headquartered in Montreal, GroupAssur has always been actively involved in new technical innovations and strategies, and, early last year, merged with Evolution Insurance, an MGA and wholesaler specialising in complex risks that offers its facilities, programmes and services to Canadian brokers. The move has ushered in a number of changes, alongside the company’s own technological evolution. St-Jean Mercier, who joined GroupAssur in 2021, is well-versed in the process and has extensive experience with the transition from traditional technology stacks. 78

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Frederic St-Jean-Mercier, CIO of Groupassur Inc.

GROUPASSUR

Jalal Khargou, newly appointed VP of AI & Data analytics, is presenting the team with his vision to take GroupAssur’s existing AI & ML capabilities to the next level.

“Last year, I joined GroupAssur, I felt their vision to pivot to a technology-driven company, combined with their size was a natural fit based on my experience in both large financial enterprises and smaller, nimbler SaaS technology companies. My role is essentially to create value through technology within the organisation and foster a culture of innovation.” St-Jean Mercier says GroupAssur has taken a unique approach to its technical 80

July 2022

transition, in that its teams are redesigning the business first and then putting technologies in place to fit that need. “We're actually rethinking, reshaping our business model and our operating model based on what we can do with technologies, so I work extremely closely with the other executives to really understand their challenges,” he says. “We share the same objectives and KPIs.

FRÉDÉRIC ST-JEAN MERCIER TITLE: CHIEF INFORMATION OFFICER COMPANY: GROUPASSUR INC. INDUSTRY: INSURANCE

1993

Year GroupAssur was founded

200+ Number of Employees

EXECUTIVE BIO

LOCATION: MONTREAL, CANADA Frédéric is Chief Information Officer at GroupAssur Inc. a Montreal based MGA doing business across Canada and several US states. He designed the company’s long term innovation strategy using the latest and most promising technologies combining world class applications like Guidewire with an innovative artificial intelligence approach. GroupAssur will unquestionably strengthen its place as a market leader under his guidance. Prior joining GroupAssur, Frédéric cumulated 20 years of management experience in the financial and technology sectors. More recently, he participated in the success of one of the fastest growing software companies in Canada and internationally. Frédéric holds a university degree in Management and completed his Executive MBA in 2018.

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Earlier this year, GroupAssur – one of Canada’s fastest-growing P&C insurance providers – announced it had partnered with Guidewire, ushering in its digital transformation.

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Neil Pengelly, EY’s Canadian insurance consulting leader, is based out of Toronto, Ontario, Canada. He describes Nexus as an enablement platform that brings best-ofbreed capabilities across a broad spectrum of software and business technologies to enable clients. “The Nexus for Insurance platform provides a core system that is powered by Guidewire, with EY’s Nexus assets. This allows the rapid deployment – in a matter of months versus years – of full-stack capabilities that provide them the pricing and underwriting functions they need to be able to deliver on their business, as well as a full-scale set of integrations,”

As technologies rapidly change, companies need to constantly stay ahead of the new innovations, which is why Nexus brings so much value. Based in California’s Silicon Valley, EY’s global insurance technology leader David Connolly says “Insurance companies in many cases are struggling to keep up with the roughly 2000 insured techs that have emerged, let alone all the changes in the existing companies such as Guidewire and Duck Creek and EIS and others. Our selfassigned job is to keep up with all of this and make it very easy for our clients to understand what technology can do for their business, as well as how to enable change at speed without bearing the burden of all the research required to figure out who to partner with.” Pengelly then concludes, “The need for insurance companies to bring more agility into the market and get more products out based on customer preferences has never been stronger,” he concludes. “Nexus is positioned to support that.”

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Frederic St-Jean-Mercier giving the opening remarks at the 2022 IT Strategic Planning session. GroupAssur’s IT team is at the core of the company’s ambition to revolutionise the P&C MGA industry with unmatched technology capabilities. The team was therefore presented with GroupAssur’s detailed 5-year corporate strategy plan. They were then able to build their technology roadmap to support the company’s long-term objectives and milestones.

“ Our goal is to create a world-class MGA and expand through the United States” FREDERIC ST-JEAN-MERCIER CHIEF INFORMATION OFFICER, GROUPASSUR INC.

New marketplace offerings and a robust reputation GroupAssur is the largest Canadian owned MGA in P&C insurance in Canada. The company mainly provides commercial insurance products and has a wide range of products, from General Liability to property. The merger with Evolution Insurance has been a symbiotic move. 84

July 2022

“We had very complementary products, so that made us the number one Canadianowned MGA in the country,” St-Jean Mercier says. “Our goal is to create a world-class MGA and expand through the United States.” Part of this journey is the deployment of new technologies that are set to further enhance GroupAssur’s wide portfolio of commercial products. The innovations are

GROUPASSUR

we do so through several different insurance products - which we design - and build partnerships with them. “This allows us to offer a very broad and diverse range of insurance products, enabling us to cover very complex risks that most insurance companies would not be able or willing to cover themselves.” GroupAssur is, in his opinion, able to assemble a completely different type of insurance offering. Another competitive advantage is the company's financial resources. As Canada's largest MGA, backed by reputable investors, it has the ability to invest in technology at scale, in a way that very few other MGAs can.

adding value to broker services. GroupAssur will be the first MGA in the world to be going live on Guidewire – the world-renowned cloud-native, P&C platform for insurers. It's just one of the aspects that already sets GroupAssur apart from the competition. St-Jean Mercier explains: “Most MGAs are pretty niche. We are different because we represent most of the national insurers and

Technology adoption in commercial insurance The demand for more streamlined and digitised commercial insurance is high, but a limited number of traditional industry players have chosen to adopt the latest technological innovations. Instead, they have tended to focus on personal lines products. St-Jean Mercier explains: "This has created a gap between the state of technology for personal lines insurance and that for commercial insurance. Then COVID came, and drastically changed the landscape, so now customers' expectations are even higher when it comes to the digital and self-service marketplace. This puts even more pressure on insurance companies to invest more into personal lines and will most likely widen the gap further when it comes to digital offerings in the commercial lines sector. This situation has provided GroupAssur with the opportunity to be at the forefront of entities investing next-generation services in the commercial lines sector. “Commercial insurance is our core business, this is what we're focusing on. insurtechdigital.com

GROUPASSUR

Innovation through technology

We're investing in these technologies so that we can bring serious benefits and disruption to the industry through the use of tech in a way that no-one else has done before.” Core values in a changing industry As agile strategies and new technologies rapidly transform the mechanisms and procedures offered by GroupAssur, the company is intent on making sure it retains its core values, which are based in respect and integrity, excellence and unity. “This is really the bedrock of our company. We operate in the financial sector, so our clients and our partners need to trust us. We need to be respectful and have integrity at all times. This is non-negotiable.” 86

July 2022

“Excellence translates into the quality of our work, both for what we provide to our brokers and how we represent our insurance carriers. Our KPIs are driven around excellence, as well as the value we can bring to our partners. “This is where the innovation aspect comes in. We deliver experience through technology and innovation. There's no other way to do it. There's a limit to how you can scale using manual processes, pen and paper and people. So excellence is the driver of technology for us.” The final core value for GroupAssur is unity, which is applied to the company’s internal operations as much as to its customer products and services.

Véronique Ledoux & Erica Fargiorgio participating in the 2022 IT Strategic Planning session. Véronique oversaw the successful delivery of GroupAssur’s newly built Data Lake and the migration of all production and financial reporting to a fully automated business intelligence platform. This allows business operations and the management team to have near real-time access to all the company’s KPI and objectives.

“We share all the same objectives,” says St-Jean Mercier. “Whether you're in technology, operations, underwriting or business development, there are the same objectives across the board. We win together because we're all accountable together. It's very important for us.” Digital transformation and going cloud native GroupAssur is currently in the process of transitioning to a cloud-native model on the Guidewire platform. The integration process will be completed soon, making the insurance provider the first MGA in Canada to operate in this way. “Guidewire is at the centre of the core insurance operations ecosystem that we

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GroupAssur built a small but highly skilled core IT team responsible for overseeing the strategy, conceptualisation, design, architecture, and requirements internally while leveraging external partners for development & execution at scale.

are developing. But around this we're implementing a lot of different technologies – some of which is AI-driven and some of which is centred around automation, data and analytics, as well as business intelligence,” continues St-Jean Mercier. As part of the transition, GroupAssur’s team built a Data Lake featuring data from across the company’s entire landscape of legacy systems to provide a unified dimension that AI algorithms will leverage to help the business make decisions. “A lot of our transformation is not around replacing the humans – it's around three things: Speed, efficiency, and insight. “Foremost, speed is of the essence. We look at the speed at which a case moves through our pipeline, eliminating any kind of clerical or data entry work for our employees.

GROUPASSUR

From left to right: Jalal Khargou, VP of AI & Data Analytics. Jean-François Martineau, Solution Architect & Technical Lead. Erica Fargiorgio, Program Manager. Véronique Ledoux, Business Analyst, Data. Frederic St-Jean-Mercier, Chief Information Officer. Chantale Leduc, Executive Assistant. David Cecyre-Thibert, Business Analyst, Insurance Products.

“ Our value of Excellence translates into the quality of our work, both for what we provide to our brokers and how we represent our insurance carriers” FREDERIC ST-JEAN-MERCIER CHIEF INFORMATION OFFICER, GROUPASSUR INC.

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GROUPASSUR

“This allows them to focus on doing actual underwriting work without having to go and search for all of the data that they need to make a decision. It's really about simplifying their operation; we're not removing the human from the equation, because we are an underwriting business. “We also think that technology is not at the stage, for the foreseeable future, where it can make underwriting decisions. Those are too complex, especially in the commercial sector. Instead, what we're doing is making sure that our technology routes the right case to the right underwriter – the one who is the most qualified to perform that case extremely efficiently.” GroupAssur’s new processes are made possible through its partnerships and new APIs. The company has forged several alliances with data providers that are already integrated into Guidewire’s platform. The AI-driven solutions extract the information from the different channels that receives submissions. They then feed that straight into Guidewire along with some of its own inferred analysis & insights – thus completely removing the data entry and clerical work portion of the labour. The availability of insights is also essential, says St-Jean Mercier, because it guides all management decisions in the company’s strategy. “We have already built a live business intelligence hub that tracks all of our KPIs, all of our performances, our markets, our brokers’ performance throughout the years, month by month. We can slice it anyway we want and go back as far as 10 years. It contains unified data from all the different legacy systems that we have, and we designed it so that it can scale with acquisition, because part of our strategy is around acquisition.” 90

July 2022

“ When you do underwriting, you want to make sure that you do it right – that you check every box – that you cover every angle, because you don't want to have a bad risk” FREDERIC ST-JEAN-MERCIER CHIEF INFORMATION OFFICER, GROUPASSUR INC.

Within just a few short months, GroupAssur can bring a legacy system from an acquisition onto the data lake and begin migrating it over to the Guidewire platform. Ultimately, they aim to complete the post-merger integration of the entire system within three-to-six months following a transaction. “That's the gist of our transformation,” St-Jean Mercier says. “So, what kind of value does it bring to our stakeholders? “If I'm an insurance company and I see that GroupAssur's technology allows faster and more efficient quoting to their brokers - at no additional cost to them and with a loss ratio equal to or greater than the current ratios than it's a no-brainer for these companies to partner with us and create more programs.“ “From the broker standpoint, It's all about giving them flexibility and speed. They don't want to have to enter data on a portal for six different MGAs and four different insurance carriers for every quote. That's not sustainable. So we want to make it easy for them to send

Jalal Khargou, newly appointed VP of AI & Data Analytics & Frederic St-Jean-Mercier, CIO of Groupassur. Together they are ready to revolutionize the P&C Commercial Insurance MGA industry. insurtechdigital.com

GROUPASSUR

cases to us, and we want to make it easy for them to conduct their business, even when it is a very complex risk “Finally, when we talk to potential companies that we want to acquire or merge with, in addition to the broad range of insurance products and expertise that we bring, we bring technology that they don't have and that would be very expensive to implement. Their expertise and product range, combined with our competitive advantage, makes it easy for them to choose to join GroupAssur. “They bring us their expertise and their products, and we bring them our tech, our products, our expertise. It's a win-win for everyone.” Key Performance Indicators driving strategy GroupAssur's expansion strategy is guided by key performance indicator (KPI) data that directs our strategy and drives our growth. St-Jean Mercier explains: “Our two primary KPIs are our loss ratio and our timeto-quote. When you do underwriting, you want to make sure that you do it right – that you check every box – that you cover every angle, because you don't want to have a bad risk. You can't rush the process, but you still need to be fast. So our time-to-quote KPI is

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“ Labour shortages, especially in tech, are really hard because the pace at which technology is evolving has accelerated” FREDERIC ST-JEAN-MERCIER CHIEF INFORMATION OFFICER, GROUPASSUR INC.

July 2022

By managing the KPIs efficiently and scaling fast, GroupAssur has implemented an ambitious growth strategy that will enable it to enter the US market soon. “We want to expand to the US market, we're actually currently looking for MGAs over there that want to partner with us in this venture. St-Jean Mercier says that, within 3-to-6 months – depending on the original technology stack and processes – an MGA that was relying on legacy systems will be in a position to switch, in its entirety, to a wholly new digital proposition.

counterbalanced by the loss ratio. We want to have a loss ratio that far exceeds anything that insurance companies have because it's important for them. “We represent them, so we have to perform better. Ultimately, one primary KPI is enabling the business to quote faster and provide them with all the data and the insight they need to quote something very efficiently, allowing them to make the right decision at the right rate, using the right facility.

Challenges facing the insurance industry While technology is busy transforming legacy companies to slick, digital operators, it's easy to believe the process has been challengefree. This is not the case, according to St-Jean Mercier, who emphasises the fact that the war on talent is a very real stumbling block to the insurance industry in general. “It's very hard – and like anyone, we're facing the same challenges. Labour shortages, especially in tech, are really hard because the pace at which technology is evolving has accelerated. You have a hard time finding talent, but a year later you have to find more talent for newer technologies, which complicates the challenge." GroupAssur is managing the situation strategically by designing its core tech team to be composed of high performers with high accountability that are mainly geared toward architecture and business analyst roles. The team conceptualised and designed the high level architecture and then built the roadmap. They have a firm understanding of the company’s strategy and objectives. They are also well-versed in a diverse spectrum of technologies so that, if the need arises, they can be paired with a digital partner to execute a new project. insurtechdigital.com

GROUPASSUR

Jean-François Martineau, Solution Architect, oversees GroupAssur’s Guidewire implementation with its partner Ernst & Young Canada. Under his technical leadership, GroupAssur is on track to complete the migration of its three legacy insurance systems to the full suite of Guidewire products in under a year. The ambitious project, which kicked off in July 2021 has now successfully completed its UAT phase and is scheduled to go live for all lines of business on June 1st, 2022, making GroupAssur the first MGA in the world to use Guidewire.

July 2022

“We want to leverage innovations to revolutionise the commercial insurance and MGA Industry in Canada” FREDERIC ST-JEAN-MERCIER CHIEF INFORMATION OFFICER, GROUPASSUR INC.

The digital ecosystem has become a key driver for all of GroupAssur’s scaling plans – indeed, St-Jean Mercier describes it as critical. “There's no way we could have delivered Guidewire in such a small amount of time if it hadn’t been for the support of our ecosystem partners. We partnered with Ernst & Young Canada. They have a phenomenal team, and I’ve been so impressed with how much expertise and talent they can pull in at scale. “This is a prime example of how, when you’re facing a labour shortage, a partner with international scale can pull talents from all over the world and build an insurance application software practice in record time. It’s been eye-opening. “We're talking policy centre, billing centre, producer engage portals, customer engage portals, replacing four different legacy systems, on-track and under budget in under a year – that is just phenomenal.” The other partner GroupAssur has come to rely on is SIA Partners. The French fintech company has headquarters in Canada and has a robust reputation for AI and data science. SIA manages the coding and algorithm building required by GroupAssur as the company continues to scale and enter new markets. “We think it's a really good team. We've been working with them for the creation of knowledge and the first iteration of our AI algorithm, which is currently running in production. So those are just two of the many

great partners we have. But I would say that those are the two primary ones. New horizons for GroupAssur The future is certainly bright for this forward-thinking company that has embraced innovations and technologies, not only to drive their own processes, but to transform the offerings of their stakeholders and customers, too. “In terms of the future, the three areas of focus for us will be completing the transformation that we're already well into, and then pivot to become a technologydriven insurance company,” enthuses St-Jean Mercier. “After that, we want to leverage innovations to revolutionise the commercial insurance and MGA Industry. That’s our primary focus for the future, as well as consolidating our leadership in Canada.” The move into the US is another big step, and an expansion that is being actively worked upon. St-Jean concludes: “We want to expand that to a point where we become unreachable by the competition. We're actively looking for other MGAs in the US that want to bring their expertise to us, while we bring our technology and expertise to them. The US is a very important milestone for us in our future, and the first.”

insurtechdigital.com

Speeding toward towar a safer Telematics technology has the potential to overhaul the fleet industry and is becoming a mainstream option for customers WRITTEN BY: ALEX CLERE

s technology evolves and the cost of implementation becomes more accessible, insurers and fleet operators are increasingly adopting usage-based insurance (UBI). These types of integrations – which can either incorporate onboard telematics systems or plugand-play options instead – allow insurers to provide more bespoke cover to their customers while capturing a clearer picture of driving behaviour. Despite the availability of telematics solutions, their uptake among commercial operators is still relatively low. Research from mobility and automation consultancy Ptolemus found that 25 million vehicles are equipped with UBI solutions, but less than 1% of these policies are offered to fleet vehicles. 96

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ds rds r future?

MGA:TPA

Ptolemus expects growth in the UBI space, projecting that there will be over 20 million fleet UBI vehicles by 2030. Commercial insurance telematics premiums are expected to reach €20bn by the same year. Writing in the report, Ptolemus managing director Frederic Bruneteau claims that it’s high-time fleet insurers seized upon the telematics opportunity. “Higher interest in fleet telematics, a desire to reduce losses and more sophisticated, affordable technology solutions entering the market are just three key drivers,” Bruneteau says. The state of telematics in fleet insurance “Telematics technology has traditionally been used for real-time tracking of the fleet and accessing reports on their usage, including fuel consumption, utilisation, idle time and crashes,” explains Biswajit Kundu Roy, CEO and founder of vehicle rental platform Coastr. “More recently, telematics data is providing access to real-time vehicle data that is being used for monitoring driving behaviour such as harsh braking and speeding by fleet operators and insurance companies. More advanced fleet software is also able to use data such as diagnostic engine alerts to schedule early maintenance of vehicles. “Most fleet management software has technical debt challenges and is often difficult to change or integrate with other platforms that are being used by the fleet operator. Due to those limitations, most fleet management software does not utilise insurtechdigital.com

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teams can be positioned near these areas to access the scene of an accident within minutes, achieving response times that are the envy of the emergency services. “Once there, the insurance response teams can take pictures that can be uploaded immediately so that liability can be established and the cost of damage can be assessed – all by automated systems.”

telematics data as part of its core processes, often requiring fleet operators to purchase and manage two different solutions, then manually reconcile the data between them.” Christine Minetou, chief pricing officer at UK home and motor insurtech Policy Expert, describes an ideal-case scenario: “Undoubtedly the most impressive utilisation of AI I’ve come across in the insurance industry is the Chinese automobile insurer Ping An and the way it uses cloud-based technology to transform the way motor insurance claims are handled. “The smart city of Shenzhen has established a level of connectivity that has improved transport flows, eliminated traffic jams and enabled the identification of potential accident hotspots. It also means that response

Insurers must adapt to the EV era As the world becomes increasingly electric, insurers and fleet operators will have no choice but to keep up. The most obvious challenges arise from recharging

“ The EV fleet has created new requirements from the fleet management system” BISWAJIT KUNDU ROY CEO OF COASTR

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needs, which, along with the prospect of battery degradation, will need to be factored into platforms. With telematics built into pretty much every new electric vehicle (EV), there is also scope for customers to share this data with insurance providers and allow a more seamless data transfer without the need for additional devices or apps – this will, however, need to be handled sensitively. 100

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“Manufacturer installs are still viewed with some suspicion in terms of GDPR and who is watching,” explains Simon Naylor, director of Wessex Fleet. “Customer-installed units have more trust, but they have to be easier to manage.” Coastr CEO and founder Biswajit Kundu Roy expects it to become commonplace for insurers to connect directly with the manufacturer’s APIs and collect data straight

“ Most fleet management software has technical debt challenges and is often difficult to change or integrate with other platforms” BISWAJIT KUNDU ROY CEO OF COASTR

from the vehicle in real time. He also says that the ability to integrate with operational platforms – such as accounting, payments and service networks – will help to provide advanced fleet insights like fleet planning and cost management. With consumers increasingly aware of environmental issues – and the negative PR that comes from lagging behind – there is also the possibility for operational data to be utilised

to measure an operator’s carbon footprint, helping reduce energy and fuel usage. Biswajit Kundu Roy says: “The EV fleet has created new requirements from the fleet management system, with demands on EV fleet-specific reporting around charging, battery health residual values and parts costs for EVs, to name a few. “In addition, the need for connecting to wider services and the vehicle has also insurtechdigital.com

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“ Manufacturer installs are still viewed with some suspicion, in terms of GDPR and who is watching” SIMON NAYLOR

DIRECTOR OF WESSEX FLEET

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grown as EV drivers need information around charging stations and availability of chargers in real time. Increased numbers of EVs on the road will increase the demand on charging grids as well, which may lead to other cyclical impacts on fleet management. “Finally, EV vehicles last longer and have longer gaps between their maintenance schedules, which will be different to petrol and diesel vehicles due to them requiring more frequent maintenance.” Clearly, by encouraging operators to share telematics more widely, insurers can foster a closer relationship with customers – not just one that is better at predicting risk, but one that can also benefit the operator. Telematics have the potential to flag bad driving practice, identify areas of fuel inefficiency and save the operator money, both on insurance and on day-to-day operations. The rise of EVs presents some challenges to the industry. Telematics platforms will have to factor into their app the reality of operating an EV fleet, while insurers will have to constantly ensure that their policies reflect the evolving business challenges that their customers face. But more EVs on the road won’t slow the rapid acceleration of UBI or halt the growth in telematics within the commercial insurance space.

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Gary Ho on Digital Transformation as CTO at AXA HK and Macau WRITTEN BY: İLKHAN ÖZSEVIM

PRODUCED BY: JOE PALLISER insurtechdigital.com

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Chief Technology Officer of insurance giant AXA Hong Kong and Macau, Gary Ho discusses the relationship between better digitalisation and data

ary Ho, Chief Technology Officer of AXA Hong Kong and Macau, has been in digital technology for over 2 decades. “Having been the Chief Lead Architect, I have a solid technical background, primarily focusing on leading enterprise solutions architecture. I have formulated IT strategies and driven multimillion-dollar transformation projects in insurance firms. Changes in enterprise architecture are inevitable alongside digital transformation, and these projects have helped me to understand how the commercial world and technology could go together to create positive impacts,” he says of his tenure within the digital tech sector. “These diverse experiences have allowed me to prepare for uncertainties and challenges. AXA has a strong emphasis on human values – and it somehow reminds me of my past days in technical consulting, and that we must put ourselves in the customers’ shoes, to work out solutions that resonate with them.” “Recently, in Q1 this year, our team won Asia’s Best Infrastructure Modernisation at the IDC Financial Insight Innovation Awards. This recognition is a very strong external endorsement that we are playing a leading role and are on the right track in strategy, mission, and vision in the IT industry.”

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Gary Ho on Digital Transformation as CTO at AXA HK and Macau

Recipe for success – responsive, present and sustainable In a climate where it seems every business is undergoing some form of transformation, it has to be asked: what exactly are the focuses of AXA’s digital transformation journey that makes them stand out as giants in the industry? Ho says: “There are three focal points that set AXA apart, and these are: responding to trends; always being present; and nurturing an environment for sustainable growth. Taken as a whole, these allow us to deliver our promises for both today and tomorrow.” Being responsive to trends is vital. Customers nowadays are more willing to voice their needs, holding ever-stronger opinions concerning how AXA should approach and communicate with them. “I see this in a positive light,” says Ho. “Yet, the challenge lies in how we can keep up with their constantly changing needs. We want to be the companion of our customers 108

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“ We’re not satisfied with the mere status quo” GARY HO

CHIEF TECHNOLOGY OFFICER HONG KONG AND MACAU, AXA

throughout their lifetime, through the ups and downs, and so we have to understand our customers.” “To achieve this, we must always be present with them – being there for them through their entire journey shows them that we care and that they matter to us. We need to go beyond mere policy, down to even the most subtle details of Customer Experience (CX). ‘Being present’ also extends to the reliability of our systems. We’ve

AXA

invested significant effort in PaaS (Platform as a Service) and SaaS (Software as a Service), supported by a cloud-native architecture that fuels 24/7 operation.” This approach then spills over into many different areas and aspects of business and operations at AXA. “But, of course, we’re not satisfied with the mere status quo,” says Ho. “Digital transformation is an ongoing and constant process for us. We work hard to foster an evergreen environment that encourages and nurtures sustainable growth and on-time responses. It’s also necessary to save the turnaround time spent on systems upgrades and patching so that we can dedicate our resources and time to the applications and CX enhancements.” Developing stand-out products and services with the technology to match Hong Kong possesses a highly competitive insurance market, with many firms trying to make their mark in the territory. AXA tackles this by providing offerings above and beyond those of competitors via a digital system designed to accommodate them. For such market conditions, what does it take for an IT system that can support AXA’s wide spectrum of service and product offerings to be effectively implemented? In short,

AXA aims for a progressively more seamless architecture, for more agile responses to the market and for synchronisation across multiple departments. “The market can be worlds apart between today and tomorrow,” says Ho. “It’s crucial that we’ve got the right tools implemented in the right places to endure any challenges that may arise from this constant shifting, so having the flexibility to upgrade any system efficiently, with as little impact as possible, is central to this adaptation.” “To achieve this, we’ve implemented a Microservice Architecture. We are now able to add or remove any product or component of the system much faster than ever before, and this entire process is also virtually seamless. Since we have a thriving partner ecosystem that involves a hybrid of remote and on-premises teams, an architectural design that includes great adjustability is a better fit for us than the traditional setting. It also sets the basis for the continued development of our services.”

149,000

Number of employees (AXA Group – AXA Hong Kong & Macau is a member of AXA Group)

1816

Year founded

Making use of data-based insights AXA is leveraging the increasing importance of data in an exponentially expanding age of information. Ho says: “No doubt, data has become an invaluable asset in itself. insurtechdigital.com

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required business model changes enabled by modern digital solutions which, without reliable partners, would be hard to scale at pace.

A consultancy business is only as good as the knowhow it can impart onto clients. So it speaks volumes that, when asked what sets IBM Consulting apart, Lee-Han Tjioe, General Manager for Hong Kong and Macau, points to its expertise.

An example is IBM’s strong partnership with insurance company AXA, which has endured for many years. Initially, AXA had their applications managed by providers worldwide but was looking to consolidate, recognising that it was hard to achieve consistent levels of service as well as cost effectiveness. AXA brought in IBM to manage those applications and help them innovate.

“We have both business consulting and technology consulting in our scope,” LeeHan says. “We have business consultants that help clients with strategy, new propositions and defining or optimising business processes. That’s one part of our practice. The other part is advising on specific technology topics. We have consultants that are very specialised in key technologies like AI and Hybrid Cloud that can help clients achieve major, technology-enabled operational improvements.” IBM has been a trusted advisory and delivery partner for decades, developing into an ecosystem provider with recent corporate acquisitions to expand its AI and Hybrid Cloud skill sets and support clients with implementing differentiating industry and technology solutions. Today, IBM works collaboratively with companies to achieve

“Our partnership with AXA means we are delivering multi-year support for the business-critical applications that AXA has,” Lee-Han continues. “Those applications are supporting distribution, sales, and key internal operations. We have transferred knowledge of 60 applications within four months and now support about 100+ applications. This is the foundation for our partnership with AXA. We are now helping with further accelerated deployment of APIbased services on AXA’s digital platform to meet rapidly developing market needs.”

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AXA

GARY HO TITLE: C HIEF TECHNOLOGY OFFICER HONG KONG AND MACAU INDUSTRY: INSURANCE

EXECUTIVE BIO

LOCATION: HONG KONG AXA Hong Kong and Macau is a member of the AXA Group, a leading global insurer with presence in 50 markets and serving 95 million customers worldwide. As one of the most diversified insurers offering integrated solutions across Life, Health and General Insurance, our goal is to be the insurance and wellness partner to the individuals, businesses and community. At the core of our service commitment is continuous product innovation and customer experience enrichment, which is achieved through actively listening to our customers and leveraging technology and digital transformation. We embrace our responsibility to create shared value for our community.

“ Digital transformation is an ongoing and constant process for us” GARY HO

CHIEF TECHNOLOGY OFFICER HONG KONG AND MACAU, AXA

Having large data-sets gives businesses an opportunity to understand their users, and then enhance customer experience, thereby boosting satisfaction from a scientific point of view.” Data, scientific approaches and technical sophistication are all potentially linked to human wellbeing. “For example, from existing AXA user-insights, we may offer customers personalised recommendations that could explicitly fulfil a particular individual user’s needs, ultimately increasing customer conversion rates and driving revenue growth,” Ho explains.

“But of course, achieving this is no easy task,” he acknowledges. “First and foremost, a solid data foundation is crucial to this journey. Without it, it’s almost impossible for any organisation to turn their data into an asset. “ “Second, while there is a tremendous amount of data distributed in several data warehouses, not all data is clean nor is it all correct. We could see some of that data as dirty or noisy – which would potentially impact the data model accuracy and the final prediction results. As it turns out, we might spend much more time and effort on data cleansing and pre-processing than expected. “ insurtechdigital.com

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Delivering agility through technology Brian Kealey, GM and VP for MuleSoft Asia, talks technology and cutting edge solutions for the global insurance industry MuleSoft, acquired by leading software company Salesforce in 2018, is the only unified platform for integration, APIs, and automation. MuleSoft makes it possible for IT and business teams to create seamless digital experiences faster than ever before. The core aim of MuleSoft is to help organisations through their digital transformation journey by enabling greater speed, agility, and efficiency. Brian Kealey, GM and VP for MuleSoft Asia, leads the MuleSoft business across Asia, which covers the Greater ChIna Region, Southeast Asia and India. He says, “MuleSoft’s vision is to connect and automate everything. We help organisations to become more composable and agile by unlocking their assets, the data, and the processes they have, and being able to improve their customer experience through technology.”

Transforming customer experiences The trend for focussing on the customer experience is a theme

dominating all industries, and MuleSoft has taken a different approach to achieving its goal. Kealey says, “We saw that more than 70% of customer experiences in Asia have become digital over the last two years. And we’ve seen the pandemic has massively accelerated how organisations think about digital and how critical that is to their growth.” Automation is also playing a big part in MuleSoft’s ongoing strategy. “We allow IT to have the security and governance that they need to make sure the organisation is not at risk,” he says. “Now with automation capabilities, we’re providing the only unified platform that combines the power of integration, API management, and automation on a resilient, secure, and flexible foundation, so companies across industries can easily automate business processes and compose new digital-first experiences, faster.” He concludes, “That’s been the focus for us for the last few years. And we’re continuing to innovate in security and governance and reliability space as well. So very exciting times for us.”

AXA

“ There are three focal points that set AXA apart, and these are: responding to trends; always being present; and nurturing an environment for sustainable growth. Taken as a whole, these allow us to deliver our promises for both today and tomorrow.” GARY HO

CHIEF TECHNOLOGY OFFICER HONG KONG AND MACAU, AXA

“To counter this, we have maintained a robust Data Governance Framework (DGF). Within this framework, we’ve established good standards and policies, like regular data cleansing and data quality optimisation. With a modernised and robust data infrastructure, we are proud to say that we’ve broken the silo between data and wider lines of business, to drive our enterprise forward.” AXA has a Point of Sales System for their distribution partner, iPro, to support the sales journey of its products digitally, with Ho describing the relationship as one where 116

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“iPro helps us to facilitate the sales practices with paperless applications through use of the iPad”. “We are proud to say that we started the journey of handling our new insurance policies through a paperless process, starting from agency sales to transaction completion in the backend. By using iPro, we can empower our financial planners to increase their working mobility and productivity anywhere, anytime,” he says. Developing a strong IT team and preparing for modernisation of legacy apps Meanwhile, AXA is modernising all of its legacy applications to remain in-line with sustainability, efficiency, and digitisation goals. “We believe the cultivation of a cloud-first foundation will uplift the entire technology support to business,” says Ho, “which could deliver a seamless omnichannel experience to AXA customers and colleagues with business value.” In order to leverage their data, AXA has implemented Digital Backbone, which can create 360 customer analysis for the insurance company’s financial planners. It allows them to provide timely data to support the selling strategies to AXA

GARY HO ON THE NEXT STEPS “We are also implementing a multi-level cloud programme in AXA to facilitate cloud adoption within the company. When we’re talking about raising our adoption rate to new heights, we have a very aggressive target – nearly 100% cloud utilisation of all applications in Hong Kong.”

customers, acting as the facilitator to continuously engage its customers. It can also further analyse customer behaviours to support business vision and strategy at the same time. At the foundation of the IT systems, of course, is the IT team. The question then becomes how to build a strong IT team that can support the technology strategy at AXA. Ho says: “It might be a cliché to some, but to AXA, the most important aspect of a strong team has got to be ‘doing the right thing, instead of doing the thing

right’. We should develop a foundation for solutions, to make sure we are on the right track, including in terms of architecture design, solution and vendor selection, and so on. This brings out a further question, which is: ‘How can we be sure if we are doing the right thing?’. The team should understand the business strategy of the company, and why we are working on a particular solution. They should think from the perspective of customers, to provide an exceptional experience with the applications they develop. “ insurtechdigital.com

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“We are making the shift towards a start-up mentality and the principle of courage, in which everyone takes responsibility to contribute to the entire team. We would love to establish a culture with an adventurous ethos, where colleagues are never afraid to take risks and are willing to try something new in the market. All of us should work as an alliance to build a technology-vision that business resonates with, so that business and IT can deliver the most positive outcomes together.” Looking to the future of digital technologies and cloud computing When asked about his views regarding the rising trend of enterprises adopting cloud computing to accommodate this new era

of technology, Ho explains the importance of understanding the reasons behind such moves, saying: “Before we talk about cloud computing adoption, we should understand the reason behind enterprises being so eager to move towards the cloud in the first place.”

“ No doubt, data has become an invaluable asset in itself” GARY HO

CHIEF TECHNOLOGY OFFICER HONG KONG AND MACAU, AXA

Your Data Has the Power To Do the Extraordinary Innovate with your data on any platform, any cloud with our Intelligent Data Management Cloud™ For more details, please refer to www.informatica.com.hk or call at +852 8228 3186. LEARN MORE

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“Legacy systems and on-premises servers are not friendly enough if there is any integration or update needed. Colleagues need to spend a huge amount of time on the operation processes and deployment procedures. Very often, things get complicated, which can take a heavy toll on efficiency – even if we only need to apply a minor change. As a result, we notice that more flexibility is needed to keep up with the fast pace in IT. “ “For AXA, we are using a cloud agnostic strategy to leverage the best capabilities from each solution in the industry. We adopt a multi-cloud model with inter-cloud in order to combine both and create a seamless mass-network for all our applications. We can leverage this model to extract the best of each cloud solution and support business growth in the long run.” He says: “We are also implementing a multi-level cloud programme in AXA to facilitate cloud adoption within the company. When we’re talking about raising our adoption rate to the new height, we

“ We work hard to foster an evergreen environment that encourages and nurtures sustainable growth and on-time responses”

have a very aggressive target, which is nearly 100% cloud utilisation of all applications in Hong Kong. We believe the success of this programme will greatly uplift the performance, stability and availability of technology in AXA Hong Kong and Macau.” In closing, Gary Ho shares his thoughts on coming trends in the technology industry: “The future of the technology industry has to be the adoption of Web 3.0. It’s a brandnew concept regarding the Internet’s next generation, involving the evolution of the decentralisation of the web, and leveraging it to take it to a new height. Users will be able to own and control their creation of online content and their digital assets. “ “With the evolution of Web 3.0, we will be able to leverage the Metaverse to merge and integrate the Internet and virtual world into our lives, so that we can interact in the virtual world. As we always keep up with the latest trends in technology, AXA France has already taken the first step into the Metaverse through the acquisition of virtual land on a platform, and, in the future, we can definitely see ourselves becoming one of the major players in the field, too.”

GARY HO

CHIEF TECHNOLOGY OFFICER HONG KONG AND MACAU, AXA insurtechdigital.com

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With more automated processes to contend with than ever before, it's no wonder insurtechs are increasingly reliant on analytics technologies

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The future of AI and ML in the insurance space WRITTEN BY: ALEX CLERE

marter use of artificial intelligence (AI) and machine learning (ML) is allowing insurers to speed up claims handling, improve customer experiences and inform better decisionmaking around risk. So, how exactly are AI and ML being used within insurance, and what does the future look like? Conversational AI for customer service One of the most visible ways AI is present in customer service is via virtual assistants, otherwise known as ‘chatbots’. When a customer comes to query their policy or make a claim, the chatbot is often their first point of contact, making it a critical frontline. Nina Laney, executive partner for insurance at IBM iX, explains: “AI-powered virtual agents and agent assist solutions are where AI is used to fetch customer- and context-sensitive content to efficiently resolve a query in real time. For example, if I ask whether a particular medical condition is covered under the terms of my health insurance plan, instead of being pointed to the policy documentation (sometimes running into tens of pages), I get a simple reply relating to that specific condition.” Chatbots provide convenience for the customer because they don’t have to wait in

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“ One of the big trends we’re seeing in how insurers are using AI is in prevention” NINA LANEY

EXECUTIVE PARTNER FOR INSURANCE, IBM IX

a queue or be placed on hold – but it also frees up time for the insurer. Neil Parker, GM EMEA for intelligent automation specialists Laiye, explains: “Whilst the intelligent chatbot provides an excellent service to customers it also releases capacity within the claims function, reducing operational costs and leading to lower cost of insurance.” In addition, claims portals give customers the ability to submit documentation about a claim without needing to wait for human verification. Using intelligent automation, insurers can check whether the image appears somewhere else online, whether it has been

manipulated or whether it fits into other patterns of fraudulent behaviour that would raise it as a red flag. Insurance moving towards a prevention model “One of the big trends we’re seeing in how insurers are using AI is in prevention,” explains IBM’s Nina Laney. “An example of that is offering customers suggestions of alternative driving routes to their usual ones that would be safer (fewer crashes historically) or better in the current weather conditions. Another example is detecting water leaks through smart home devices in real time, engaging insurers and homeowners automatically. Not only does this lower premium costs by mitigating risk from the onset, but, ultimately, it helps reduce damage and disruption for the customer. “Insurers are also harnessing end-to-end Internet of Things (IoT) devices to support customers proactively, in real time. For instance, using IoT analytics, an insurer can look at real-time changes in speed and calculate a vehicle’s crash impact based on a 100-point scale. If the impact is above a certain threshold – and the likelihood of a serious crash is detected – dispatchers first contact the customer and, if no one responds, proactively send emergency responders.” Laney expects insurers to continue that shift in future – a move away from detection and repair, towards prediction and prevention instead. In such a scenario, far from just settling claims, insurers are proactively engaged in helping to prevent loss from happening. Richard Stevenson, CEO of conversational AI company Red Box, says: “Given the explosion in the amount of data insurance insurtechdigital.com

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“ Insurers need to start looking more holistically at the way they use AI and ML” NEIL PARKER

GM EMEA FOR LAIYE

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providers are gaining access to, AI will continue to drive the industry to a proactive prevention model. Whilst all innovation must occur with privacy and data protection at its core, improved data access will allow insurance providers to play an important role in creating premium policies that benefit both customer and provider by encouraging everything from innovation in healthcare provision to road safety – these policies will save lives and drive down the costs of premiums, making this a win-win situation for all.” What next for the insurance industry? As technology evolves, insurers will seek to derive even greater value for customers and create more effective decision-making within the claims process – whether that

means preventing loss before it happens, or making better use of data to analyse claims once it has. Laiye’s Neil Parker says: “Insurers need to start looking more holistically at the way they use AI and ML. With a huge amount of data, ML can unlock opportunities for improved propositions, underwriting decisions, claims decisions, and greater customer insights. I would like to see insurers invest in a full end-to-end customer experience that is orchestrated on an integrated intelligent automation platform. “What do I mean by this? A platform that has all the intelligent automation capabilities you would expect – OCR, NLP/NLU, ML, AI – wrapped up with Conversational AI, and augmented with internal data from the insurer and external data sources (such as for KYC). The outcome is that information needed from the customer in respect to the insurance needs is minimal and the rest of the processes, all the way through to claim, are automated without human touch.” Over the last few years, insurers have benefitted from new lines of business – like the increased demand for cybersecurity insurance – as well as new distribution channel opportunities, including online retailers. Parker expects that, in the next few years, these will continue to increase. “In 10-15 years, these will grow and new ones will come in, which means insurers must be able to use past and current data to accurately predict and assess risk. Using intelligent automation, insurers can capitalise on the ‘forgotten’ data of individuals and markets. This will help deliver a more accurate risk assessment and price going forward. “However, the more significant change and impact of digitisation is possibly on the workforce. As digitalisation continues to insurtechdigital.com

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change organisations and impact customers, the impact on employees must not be forgotten. This brings about the opportunity for the reskilling of great people into new digital roles or enabling people to focus on truly value-added activities and those that differentiate humans from bots.” Nina Laney says: “There is great potential for AI and ML being used to drive hyperpersonalisation across products to manage to an outcome. This means delivering

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the outcome a customer needs or wants by dynamically managing the underlying products or parameters. For example, changing the blend of services under my health insurance as I age or as my circumstances change. “AI and ML also have the potential to help people form a view of whether they are over-insured or underinsured across all aspects of life – another move away from traditional products. ”

TECHNOLOGY

“ Improved data access will allow insurance providers to… create premium policies that benefit both customer and provider” RICHARD STEVENSON CEO OF RED BOX

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US INSURTE

TO WAT

New technologies and innovations in the insurtech space have seen these leading digital insurers transform the US marketplace

With new technologies emerging on a weekly basis and insurtech startups generating funding at a rate of knots, the marketplace has never been so dynamic. The US insurance industry has embraced the insurtech revolution and its cuttingedge platforms, which are leading the charge in terms of disruption, demand and growth. Here, we take a look at the top 10 US insurtech unicorns that are dominating the industry.

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TOP 10

ECH PLATFORMS

CH IN 2022 WRITTEN BY: JOANNA ENGLAND

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TOP 10

Policygenius Valuation: $1bn Founded: 2014

Kin Insurance Valuation: $1bn Founded: 2016

Kin Insurance was founded by the Chicago-based entrepreneur and investor, Sean Harper. The digital insurer has become known in the marketplace for its disruptive products and services that are transforming the home contents' insurance marketplace by making cover more affordable and easy to obtain. Kin Insurance uses advanced analytics to change home data into personalised, flexible policies – all while maintaining low-cost prices.

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Applauded for its easy-to-use and streamlined marketplace platform, Polygenius makes shopping for insurance a simpler process for all concerned. The insurtech entity provides a one-stop-shop where customers can compare insurance rates and sign up for the best ones for their needs. Policygenius' online platform is constantly updating and adding to its broad portfolio of policy options, displaying a wide range of policy options, with cover available for life and disability insurance, all the way through to car and pet insurance.

TOP 10

Clearcover

Valuation: $1bn Founded: 2016 Clearcover is a digital car insurance provider selling costeffective products and services. Recently named a Glassdoor 2021 Best Place to Work, the company's API-driven platform enables customers to have a centralised mobile app that can file claims, keep track of billing and view insurance ID information. Clearcover's mobile platform is one of the top rated super apps available via Apple App Store and Google Play.

Clover health Valuation: $1.3bn Founded: 2014

Another health insurance provider that works in conjunction with Medicaid to ensure customers are given good health provider opportunities, Clover Health is known for its affordable and easyto-understand healthcare plans – especially for America’s older generation. The digital insurer focuses on preventive care using data and technology from the Clover Assistant. In addition, the company provides Medicare Advantage insurance plans and operates as a direct contracting entity with the US government.

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Tune Protect

Prudential

Swiss Re Corporate Solutions

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Manulife

Kalai Natarajan General Manager, DX and Innovations Dai-ichi Life Insurance Asia Pasific

Lee Sarkin

Regional Chief Analytics Officer Munich Re

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Tomasz Kurczyk Chief Transformation and Digital Officer AXA

Robert Burr

Chief Executive Officer iptiQ

TOP 10

Metromile

Valuation: $1.3bn Founded: 2011 Launched over a decade ago, Metromile was one of the very first UBI and telematics insurers to corner the marketplace. The digital insurer leads the way in innovative technologies and has pioneered many new approaches to UBI that have resulted in transforming the industry. Metromile’s software platform provides mileage and fuel tracking to help customers monitor their energy usage, while also simplifying the car insurance system.

Circulo Health Valuation: $1.5bn Founded: 2021

Circulo Health is a digital insurer with the core aim of enabling better health for all its customers – no matter their budget. The insurtech has an innovative approach to health by working with primary health care, insurance plans, and independent living facilities. Circulo customers usually rely on Medicaid and often face problems accessing proper healthcare. Circulo Health removes barriers, harnessing AI and human-centric technology to provide online yet secure connections between providers and patients.

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NEXT Insurance Valuation: $4bn Founded: 2015

Launched seven years ago, Next Insurance was one of the very first insurtechs to create products and services for business customers. The digital insurer provides for the needs of enterprise clients in a broad range of industries, ranging from retail to construction, and gives customers a digital platform that assists with SME cover, providing services such as liability insurance, workers’ compensation, equipment insurance and more.

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Hippo

Valuation: $5bn Founded: 2015 Launched by co-founders Assaf Wand and Eyal Navon, Hippo is the leading property insurtech in the US. Based in Palo Alto, California, it harnesses the power of innovative IoT technologies to provide homeowners with insurance cover that is flexible, affordable and fast. Hippo’s products cover the homes and possessions of the policy holder, as well as liability from accidents occurring in the insured property. The company uses AI and big data to aggregate and analyse both property information and risk.

TOP 10

Lemonade

Valuation: $10bn Founded: 2015

Charging onto the Insurtech scene with aplomb, Lemonade has built itself an incredible marketplace reputation for providing unrivalled customer service through its swift and agile digital platform. Launched by co-founders Daniel Schreiber and Shai Wininger, Lemonade provides renters' insurance, homeowners' insurance, car insurance, pet insurance, van insurance and life insurance. It operates in multiple countries, including the US, Germany, the Netherlands and France. Based in New York, Lemonade is a peer-to-peer platform that streamlines insurance enrollment and speeds up the process of reimbursement.

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The United We Tech Series: Bright Health Episode

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Bright Health

Valuation: $11.23bn Founded: 2015 Dynamic startup Bright Health has taken the marketplace by storm due to offering flexible health insurance plans in a number of markets across the US. Founded by Bob Sheehy, Kyle Rolfing, and Tom Valdivia, it has a reputation for creating products that are cost-effective for the customer, with its claims and underwriting processes using AI and automation technologies to ensure swift, efficient services. Bright Health also provides several unique benefits to its customers, including a telehealth service that has experienced massive adoption rates and glowing customer reviews since the pandemic. Bright Health’s digital-based health insurance service platform connects customers with broker partners to lower complications in enrollment. The company's state-of-the-art platform also provides solutions for healthcare centres looking keen to improve customer services.

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