Sustainable insurtechs
Better use of data: How can insurers make the data they hold go further?
Fraud prevention: Safeguarding against a rising tide of claims fraud
AI in insurance: Learning to embrace this nascent technology
In partnership with our clients, Assurant supports more than 300 million customers across the globe. We develop innovative products and services that support, protect and connect major consumer purchases. And we do this for some of the world’s most recognised brands, enabling us to anticipate the evolving needs of consumers, and continually deliver an enhanced customer experience.
Assurant is providing a range of protection products and services to help people thrive in a connected world, partnering with Vodafone to bring protection to life.
Today’s consumer has over 20 different wifi-enabled gadgets in their home, underlining the size of the gadget protection opportunity. Assurant – a leading global business services company that supports, protects and connects major consumer purchases, serving more than 300mn customers – is focusing on insurance products and services that empower consumers to protect those gadgets.
“We focus on everything that sits around the device,” Assurant UK Managing Director Chris Woolnough explains. One of Assurant’s brands is Pocket Geek,
cancel at any time. Protect Your Bubble provides valuable real-time insights for the company based around consumer behaviour, which it can use to hone its B2B propositions.
Culture vitally important to the way Assurant does business
Woolnough says that culture is particularly important to Assurant. “Our culture is pretty special and we call it the Assurant Way,” he says. “Within that, we have a set of values. Those values are common sense, common decency, uncommon thinking and uncommon results. Everything we do hooks back into those.”
This platform of trust has allowed it to enjoy a
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Data is to insurers what yarn is to knitters: the very fabric of everything we do. We can’t imagine an insurer being successful without making adequate use of data.
Data helps insurers to understand who their customer is when they first take out a policy. They continuously use it to help them predict and model their exposure to risk. And, as digital consumers demand better experiences online, data is increasingly being used to personalise insurance offerings and tailor the level of service we provide.
We have a cram-packed issue of InsurTech Magazine for you this month, including a feature on improving the use of data within the insurance industry. We’ve spoken to some prominent experts from well-regarded companies like Cloudera and Cognizant about existing data-use practices, holes in insurers’ data strategies and what more can be done to make the most of the vast swathes of data they hold.
There’s an inseparable relationship between risk and price. If one increases, it’s likely that the other will follow. Clearly, with many consumers experiencing pressure on their household budgets, effective use of data will allow insurers to mitigate exposure and keep premiums low for the buying public. With this in mind, we also explore the recent rise in insurance fraud and ask what insurers can do to protect their businesses.
We hope you enjoy reading!
“There is an inseparable relationship between risk and price. If one increases, it’s likely the other will follow”
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Sameer Dewan, Genpact’s global business leader for insurance, discusses how the insurance industry is embracing a new age of data and lifetime customer journeys
Genpact is a global professional services firm delivering business transformation by putting digital and data to work to create competitive advantage.
It’s guided by its mission – the relentless pursuit of a world that works better for people. Genpact is focused on delivering ESG outcomes for both itself and its ecosystem of shareholders, stakeholders, employees, and the communities it operates in. As global business leader for insurance, Sameer Dewan partners with insurers, brokers, and MGAs to drive transformation, develop digital and analytics capabilities at a fast pace, and deliver business growth and efficiency.
The role Genpact plays - as detailed in its report Insurance In The Age of Instinct - is to help the insurance industry tackle challenges such as changing consumer expectations, the explosion of data, and a fast-moving technology landscape. “How insurers respond today will lay the foundation for future resilience, and Genpact
is a key partner in helping organisations connect, predict, and adapt to become instinctive insurers and lifelong protectors in their customers’ lives,” adds Dewan.
The Standard provides insurance, retirement and investment products and services, with total assets under administration of USD$45.36 bn. Genpact creates value for them as an extension of The Standard’s team, creating growth with agile operating models that can scale up to meet demand and running operations to ensure they deliver value.
“We started by assessing the current state of operations and customer journeys and the choke points in each. This led to a redesigned operating model, with customer journeys at the heart of designing the new process - driving a better customer experience and growth. But transformation is not a ‘one and done’ project, we also created a transformation roadmap to consciously and continuously drive improvements, meeting The Standard’s goals of growth and profitability over the long term.” said Dewan.
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A grain ship moored at the grain terminal of Ukraine’s Black Sea port of Odesa. Russia has agreed to an initial 60-day extension to the UN-brokered deal that allows for Ukrainian crops to be transported through safe corridors in the Black Sea.
The deal was first struck in July last year and extended for 120 days in November, but Moscow had previously hinted it could block another extension.
In February, Reuters reported that insurers have been left scrambling to quantify the losses incurred as a result of merchant ships still stranded in the region. One source put the figure at US$500mn, noting that aviation losses could be far higher.
A certified B-Corp, the company gives unused premiums to nonprofits selected by its own community – and has already donated over US$4mn to good causes.
Daniel Schreiber is Chief Executive Officer and Chairman of insurance company Lemonade – a business that he founded in 2015 alongside Shai Wininger, the founder of freelancing marketplace Fiverr; and senior insurance industry executive Ty Sagalow, who had previously been Chief Innovation Officer at Zurich North America following 25 years at AIG.
The three founders wanted to create “a new kind of insurance company”, built from scratch on an unconflicted business model using cutting-edge technology like automation and machine-learning. In an open letter to prospective investors published on Lemonade’s website, Schreiber and Wininger say it’s pretty self-evident that this approach would “enjoy structural advantages that will manifest ever more powerfully over time”.
Lemonade’s growth has also been characterised by its commitment to making a positive social impact.
Explaining some of the principles on which Lemonade is built, Schreiber told Fox Business: “The traditional insurance model is to come into town and build the tallest skyscraper – project your financial prowess in the hope that people will be cowed into trusting you. That’s not really how trust is built, and people distrust insurance companies not because they think they don’t have the wherewithal to pay their claims but because they don’t have the will to pay their claims.
“We really tried to change the fundamentals of the business model so we never make money by denying claims, leftover money goes to charity, and to try to restructure the trust element, which is one of the things that really plagues the insurance industry.”
Born in London, Schreiber spent the majority of his formative years in Israel but returned to the UK to study law. Indeed, he describes himself jovially as a ‘recovering attorney’ after a false start in law inadvertently led him into the technology space.
1,100
The move was a launching pad into the world of insurtech. He says of that time: “I was born and bred in the UK in London, and I trained as an attorney. I qualified, lasting about
a year as a corporate commercial attorney doing high-tech law. Then in the late ‘90s, I started what was my first startup and I’ve been in the tech sector ever since.”
That company was Alchemedia, which made cybersecurity software and was bought out by Finjan Software in 2003. Next, he served as Vice President of Marketing and Business Development for M-Systems, which was the original inventor of the USB flash drive. It was yet again a successful exit for another company in which
Schreiber was involved; M-Systems was acquired by SanDisk for US$1.6bn in 2006.
Schreiber stayed at SanDisk for several years after the acquisition, holding senior positions including SVP of Corporate Marketing and General Manager of Mobile Network Operators. He went on to co-lead Powermat Technologies, which provides businesses with end-to-end wireless power and charging solutions.
He helped co-found Lemonade in 2015 and has led the business ever since, using his extensive background and business knowhow to guide the digital insurer through four different venture series rounds, then an IPO in July 2020 that saw Lemonade shares soar by more than 130% on its opening day.
Today, Lemonade has a total market cap of US$865mn and over 1,100 employees on LinkedIn, split between Israel and the United States. It offers renters’, homeowners’, car, pet and life insurance, and is active in five countries: the US, Germany, the Netherlands, France, and the UK.
$4mn
Reflecting on his success, he doesn’t think that people usually enter the insurtech space for the love of insurance. He told the Wharton FinTech podcast: “It’s not a natural thing for a tech entrepreneur to want to go into insurance. It connotes all the wrong things. It’s perceived as being dull… retro-grade, heavily regulated [and] heavily capital intensive.”
“The traditional insurance model is to come into town and build the tallest skyscraper – project your financial prowess in the hope that people will be cowed into trusting you. That’s not really how trust is built”
The CEO and Co-Founder of insurtech unicorn Cover Genius talks to us about their insurance distribution platform, the power of persistence, and why he looked up to tennis players as a kid.
TITLE: CEO AND CO-FOUNDER
COMPANY: COVER GENIUS
INDUSTRY: SOFTWARE PRODUCTS
LOCATION: SYDNEY
Angus McDonald is CEO and Co-Founder of Cover Genius, an insurtech company helping to revolutionise embedded insurance through its distribution platform, XCover. Based in Sydney, McDonald founded the company in 2014 alongside fellow Co-Founder Chris Bayley and helped guide it to a billiondollar valuation in 2021.
» Chris Bayley and I co-founded Cover Genius because we saw a massive opportunity in the trillion-dollar insurance sector, where traditional insurers were siloed, country-specific and difficult to work with.
To address this, we built our global insurance distribution platform, XCover. We focused extensively on acquiring the necessary licences or authorisations in more than 60 countries and all 50 US States to distribute insurance (and noninsurance) products via XCover, with claims and support handled by XCover.com – a consumer site that has been shown to reduce support inquiries seven-fold.
By building a tech-forward platform that could handle different market requirements, compliance, quote and bind questions, pricing, reporting, marketing, claim filing, claim processing and payouts we were able to bring an innovative approach to an industry that is notoriously slow to evolve past its legacy systems.
» My heroes growing up were tennis players who became global stars. People like Steffi Graf, Andre Agassi, and Roger Federer were all players who came from humble beginnings but put their minds to becoming the best tennis player they could be. These were qualities that not only inspired me but were an inspiration for all children around the world.
» The best piece of advice I’ve ever received is about the power of persistence. If you believe you’re on the right path, then always persist; sometimes, good things take longer than you hope or expect. This advice has stayed with me throughout my life. I think that if you truly believe in what you’re striving toward, it’s really important to stay optimistic and persistent along that journey.
» Technology is helping to make fintechs more people-centric. By leveraging relevant data, brands
can anticipate the needs of their customers to make their online and offline experiences more convenient and efficient. For example, budgeting apps analyse real-time data to give consumers insights on their spending habits so they can make informed financial decisions; BNPL payment apps offer consumers an extra layer of flexibility with short-term financing; and insurtechs like Cover Genius make it simple to offer customers protection when they need it most by leveraging transaction data.
Companies creatively using technology to generate personalised experiences are inspiring, and I look forward to seeing what’s next for the industry.
Some industries, like air travel, are highly regulated. How do you balance embedded insurance with the need for those businesses to do the right thing by their customers?
Travel insurance presents an opportunity for airlines, OTAs, and other travel providers to deliver enhanced customer experiences, as it’s typically a pain point for customers. In our recent Embedded Insurance Travel Report, many consumers felt traditional insurance providers had failed them during COVID-19 as, globally, 20% of
“If you believe you’re on the right path, then always persist; sometimes good things take longer than you hope or expect”
customers who made a claim for pandemic-related reasons weren’t covered, despite purchasing travel insurance for pandemic protection.
At Cover Genius, we work with travel brands to deliver easy-to-understand protection embedded in the purchase journey, along with other customer-centric benefits such as the ability to dynamically bundle and unbundle products, and industry-leading claims experiences with instant payouts in more than 90 currencies. By enhancing their travel insurance offerings, brands can create better customer experiences that drive loyalty and repeat business.
Q. IN AN EMBEDDED FUTURE, DOES IT BECOME EASIER OR HARDER FOR COMPANIES TO DO THE RIGHT THING BY THEIR CUSTOMERS?
» Embedded distribution brings protection to the online customer journey and makes it imperative for brands to deliver strong customer experiences.
By partnering with an insurtech, digital companies can create tailored offerings that are personalised, priced right, and delivered conveniently. Our research shows that customers want this protection. 70% of global customers are highly interested in receiving embedded protection directly from their bank or financial institution, and this trend carries through other sectors like retail, travel and property.
» My headphones, hands down! I love listening to music so having great headphones is a must, wherever I am.
» I often use Zip for a number of reasons. Zip hasn’t only been a great innovator in the BNPL space, but they are also customer-centric, which is a value that’s very important to me. It’s a convenient way to make online purchases around the world on products big and small, plus I have protection on those goods.
It’s been just over a year since Cover Genius hit unicorn status. That must have been an incredibly proud moment as a founder. What’s it been like?
It’s been an incredible journey; we’ve had a monumental year of growth in which we reached $1.1mn in daily GWP, nearly tripled year-on-year revenue, reached 10.5mn customers, and broadened our reach in key industries through acquisitions and strategic investments. In addition, we closed our Series D funding round at $70mn – our highest-ever funding round, raised in a challenging environment.
“I love my family and have been able to spend more time with them over the last 12 months. I’m proud of them and the time we’re able to have together”
As we grow, it's validating and rewarding to know that we’ll be able to expand the scope of our XCover platform to protect even more customers of the world’s largest digital companies.
Q. DESCRIBE YOURSELF IN THREE WORDS.
» Persistent, considered, and trustworthy.
Q. IS THERE A PERSONAL ACHIEVEMENT FROM THE LAST 12 MONTHS YOU’RE PARTICULARLY PROUD OF?
» We had our $70mn Series D fundraise a few months ago, which I’m especially proud of. On a truly personal level, though, I love my family and have been able to spend much more time with them over the last 12 months. I’m proud of them and the time we’re able to have together.
Q. WHAT WAS THE LAST BOOK YOU READ AND WHEN?
» I’ve just finished Cormac McCarthy’s latest book, Stella Maris. He’s a Pulitzer Prize winner and a great author who produces thought-provoking stories.
Q. WHAT DO THE NEXT 12-18 MONTHS HOLD IN STORE FOR
YOU?
» More business ecosystems are moving online, providing a greater opportunity for embedded distribution to enhance the customer experience. Consumers increasingly want more convenient, tailored protection offered within their online experience, which bodes well for Cover Genius. We’re focused on expanding our insurance distribution platform to dive deeper into industries and continuously innovate to make protection more accessible to the customers of the world’s largest digital companies.
Our teams are working on exciting partnerships in the travel, property, retail, ticketing, logistics, B2B, and fintech industries that we’ll be announcing over the next few months.
At TCS, we believe in creating sustainable growth for our stakeholders. Our innovative framework, digital capabilities, agile business model and ecosystem, are helping forward-looking financial institutes to build a purpose-driven business and provide financial, physical and mental wellbeing to their customers.
Vinay Singhvi, VP & Business Unit Head of Banking, Financial Services & Insurance, UK & Ireland at TCS, discusses transformation and change in the industry
Tata Consultancy Services (TCS) is one of the leading IT and tech service providers the UK, as per the latest software and IT services ranking by Tech Market Review; and is the largest provider of IT services in the UK. “TCS is part of the Tata Group and we have been in the United Kingdom for over 50 years,” says Vinay Singhvi, Vice President and Business Head for UK and Ireland Banking, Financial Services, and Insurance (BFSI) unit for TCS. “We have the privileged position of being the purpose-led transformation for our customers, including vitality.”
As the world recovers from the pandemic, we are seeing businesses across industries - not just financial services - accelerating their use of technology. “Organisations are now looking to adapt new business models to build more customised products and services, as the needs of the end-customers are changing so rapidly.”
The segment will also continue to have a lot of competitive differentiation. “We are, for
example, seeing the rise of a lot of challenger banks,” says Singhvi, “especially over the past two or three years, as well as Insuretechs, Fintechs and innovative, creating the right competitive tension within the industry to make sure that the existing organisations are able to cater to their end-customers in much more predictable, efficient, agile and nimble ways.”
To summarise, Singhvi says, “I believe that all of this is leading to our customers focusing on understanding their own end-customers better. They are looking at hyper-personalisation in terms of what products and services they offer. They want to service them through seamless end-to-end digital journeys, and most importantly all of this depends upon making sure that the data and personal information that we have is kept secure.”
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WRITTEN BY: JOANNA ENGLAND
PRODUCED BY: JACK MITCHELL
In 2022, Zurich Insurance Group announced a business operating profit of US$6.5bn, a target above the expectations of previous years. The success has been evenly distributed across the group, but the P&C line – which is the main line for Zurich France – has performed particularly well, with a 94.3% combined ratio alongside a rise in business operating profit, too.
But the growth hasn’t just been about the numbers and profit. Rather, Zurich France has enjoyed a fruitful 12 months in terms of new customer onboarding, and the development of fresh products and solutions.
One particular unit that has grown the most over recent years is Zurich Resilience Solutions, or ZRS, created to address the rapidly changing risk landscape with a holistic approach to supporting risk management and helping build resilience.
It is this area of risk and resilience that has preoccupied the strategies taken by Zurich France over the past few years.
Describing the journey, Denis Stasinski, Chief Underwriting Officer, explains that there are two clearly defined periods that mark eras of change within Zurich France: “As a starting point, we have the world before and after COVID-19. The global economy has experienced an accelerating transformation
– and this is true across geopolitical, societal, economic, and digital spheres.
“Additionally, we are starting to see the impact of climate change in both the frequency and intensity (or severity) of
CAT events. To date, global warming is obviously a concern that we have to address collectively. As an insurance company, we need to analyse and adapt our approach considering those evolutions, which impact the risk landscape we have to deal with.”
Denis Stasinski says that by focusing on digital transformation and the latest technologies, Zurich – which is a global company serving 210 countries and territories – is having greater success in delivering its solutions as well as monitoring risk and resilience.
Forging solid partnerships has been a fundamental part of Zurich’s success in its transformation journey. Currently partnered
“By focusing on digital transformation and the latest technologies, we are having greater success in delivering its solutions as well as monitoring risk and resilience”
DENIS STASINSKI CUO, ZURICH FRANCE
TITLE: CUO
COMPANY: ZURICH FRANCE
An engineer by training, Denis holds a DEA in Materials Science from the Ecole Nationale Supérieure de Chimie et de Physique de Bordeaux, as well as a master’s degree in Risk Management from the Institut de Management des Risques. He began his career in 1993 at AXA-XL as a prevention engineer and then as a senior property underwriter. He continued his career in the Civil Liability department as a senior underwriter before being promoted to Claims Manager.
In 2009, he joined RSA and took responsibility for all "1st party" underwriting lines.
with Roboyo, a collaboration of primary importance, Mathieu Pauwels, COO of Zurich France, says that Roboyo’s position as an industry leader has played a critical role.
“Roboyo is the leading pure player in the Intelligent Automation industry. It has been growing very fast over the last three to four years. Roboyo has helped Zurich Group to build and scale the Robotic practice in 2018 and 2019. Since then, Roboyo has been one of the preferred partners for all the topics around automation.”
He explains: “They are now helping Zurich France to bring automation to our business. Their key value for us is to be a real pure player in intelligent automation (across
In December 2017, he joined Zurich France as Director of Underwriting for Property, Construction & Technical Risks
Underwriting. In September 2019, he was promoted to Head of Underwriting for Zurich France.
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industries and technology-agnostic) to offer a very flexible approach (tailored to our size and our business), with deep expertise and the aim to coach, train, and support our business in the automation journey.”
The insurance industry in general has been slow to adopt the latest innovations and technologies. But Pauwels explains that the pandemic forced a situation that has driven change across the board.
“Within the last few years, the COVID19 crisis has impacted ways of working and has had an impact on everyone. During and following the crisis, technology adoption has increased at a faster pace. And that’s why I call it ‘digital acceleration’ rather than ‘digital transformation’. Digital has always
been there, it is just a matter of accelerating its utilisation and adoption. Now, employees expect a different way of working, in terms of tools and interactions with different people.”
Pauwels points out that hybrid working practices and staff working virtually has driven forward connectivity innovations – not just internally, but also externally with Zurich Insurance, its MyZurich platform having anticipated these needs from customers.
“They expect different types of services, and they expect to have them remotely. We’re offering different services, such as the MyZurich platform, which is a platform for our brokers and customers. That platform also offers a risk advisor tool, for example.
“We are commercial insurance so it’s never the same as retail insurance in terms of digitalisation. Nevertheless, we do have
digital solutions that we need to offer (especially for basic activities like insurance certificates) as there is a need for that on the market.”
One of the challenges in implementing these digital solutions comes from issues surrounding data. In hyper digitalisation, where everything goes into the cloud, concerns regarding regulations and governance are often raised, Pauwels says.
“Questions you have to address about data include: how do you govern the data? How do you make sure that you control what is on the cloud? Where is the data going? Is there any leakage? How do you protect your
TITLE: COO
COMPANY: ZURICH FRANCE
Mathieu Pauwels is Chief Operating Officer. He has 17 years of professional experience in global IT transformation programmes and in managing multidisciplinary and international teams.
Mathieu Pauwels holds a master’s degree in Finance & Business from the ICHEC Business Management School and a specialisation in Business Engineering. He also holds an Executive MBA from IMD Business School.
customer? How do you protect the data of your employee? Ultimately, it revolves around governance.”
Other issues are raised as well, according to Pauwels – especially from a sustainability standpoint. “Digital transformation has a financial cost. But it also has a sustainability cost, because you consume more servers. It’s a different cost to paper, and you’re not cutting down trees, but there’s still that energy usage question.”
Zurich Group and Zurich France are putting in place regulations to control and monitor this, as well as strong governance to make sure they have control over the data. “You have control regarding what you put on the cloud, but the growth has been exponential for the last few years. It’s certainly an area to monitor closely.”
The nature of hybrid working patterns has also changed the way teams operate and communicate with each other. Company culture has been disrupted, and taking this into consideration while transforming digitally, is a critical part of the transitional process.
Garnier, Head of UW Casualty and Motor for Zurich in France, says creating a sense of belonging and a cohesive team requires strategy. “Challenges post-COVID raised questions about how we needed to keep our employee engagement high.
“Zurich France wasn’t the only company facing this, but the way that we decided to tackle it was by putting in place a key initiative called People Engagement. We thought about ways to maintain the relationship between employees, between each other. Another aspect of that was how we maintained relationships with our clients and brokers.” Garnier says that even transitioning colleague relationships from
virtual to face-to-face meetings has been considered, with the aim to re-engage people. “Keeping the engagement high is also dealing with the way of working, how we deal with the office space, and the technology that is used. The way we work now is mainly hybrid. It’s a great balance between working from home or always working from the office. So this is really a critical way of keeping the engagement high from our perspective.”
While climate events have played a part in insurers globally adjusting their risk assessments, the latest Zurich Global Risk Report has pinpointed a panoramic view of the problems facing society at this current time. Despite rapid innovations in
TITLE: HEAD OF UNDERWRITING FOR LIABILITY AND MOTOR FLEETS
COMPANY: ZURICH FRANCE
Céline began her career in 1995 at Sorema (Groupama), first as a technical manager for all lines of business and then as deputy manager of the facultative large risk management department. In 2001, she joined Groupama as a general and professional liability underwriter for the Groupama and Gan networks. She joined AIG in 2007 as a liability underwriter in the middle market, and was promoted to team manager in 2012. In 2016, she joined Chubb as a liability underwriting manager. In 2018, she joined Zurich France as Head of Underwriting for Liability and Motor Fleet.
technology, there are more traditional risks of inflation, cost of living, social unrest, and geopolitical confrontations that must be considered.
Vinicio Cellerini, Head of CI Customer & Distribution of Zurich Insurance Group, also assuming the interim operational management of Zurich France, says the findings of the Global Risk Report show that companies and entities must work together to overcome these problems.
“In 2023, we’ve faced risks that are at the same time both new and familiar. We’re experiencing a return of older risk, such as inflation, the cost of living crisis, and widespread social unrest and geopolitical confrontation. But also, at the same time, there is the threat of nuclear warfare. The most critical long-term risk, though, is climate change, according to the report this year.
“To understand risk, we look at current trends and how they have developed over time. We analyse data, and we partner with prominent experts”
VINICIO CELLERINI HEAD OF CI CUSTOMER & DISTRIBUTION, ZURICH FRANCE
“If we want to dig a bit deeper into the report, then you will see that the cost-ofliving crisis is clearly ranked as the most severe global risk over the next two years, though it’s also seen as the short-term threat.”
Cooperation and partnerships to combat biodiversity loss and ecosystem collapse is, espouses Cellerini, essential, because it’s viewed as one of the fastest accelerating global risks over the next decade.
“Clearly, failure of climate mitigation and climate adaptation are the largest long-term concerns. Regarding geopolitical rivalries and new world looking stances, we can expect that they will heighten economic constraints and further exacerbate both short and longterm risks. The Global Risks Report urges countries to work together to avoid resource rivalries. This is what was really important to us regarding global risk this year.”
TITLE: GLOBAL HEAD OF CUSTOMER AND DISTRIBUTION MANAGEMENT
COMPANY: ZURICH FRANCE
Vinicio Cellerini was appointed Global Head of Customer and Distribution Management for Zurich Commercial Insurance in December 2018. Vinicio joined the Zurich Insurance Group in 1986 as a Property Underwriter and since then, has held various roles within the organisation. In January 2005, he was promoted to CEO, Global Corporate Italy before being appointed CEO, Global Corporate Switzerland in 2010. In August 2012 he moved to the UK as CEO of Global Corporate UK (which later became Head of Commercial Insurance UK).
TITLE: HEAD OF UNDERWRITING FOR SPECIALTY LINES
COMPANY: ZURICH FRANCE
Martin de Laubadère is Head of Underwriting for Specialty Lines.
He joined Coface in 2006 in the Finance Department, after a postgraduate degree in Risk Management from the University of Paris IX Dauphine. He joined AIG in 2010 as Financial Lines Underwriter before joining the management team of Zurich France in 2018.
Zurich’s goal to contribute to a global movement that is centred around sustainability has led the group to partner with a range of marketplace players. Stasinski says: “Our main clients remain large international companies. But we have developed capability and expertise, in terms of risk assessment, and are ready to propose solutions for the middle market.
“In France, for example, we started to develop an MGA proposition four years ago with a partner named Etik and Tetris, dedicated to the construction sector. To
date, it has been a successful development and, obviously, it is a global initiative. We analyse this type of opportunity on a caseby-case basis.”
As part of this initiative to drive change and better sustainable practices on a global scale, Zurich Insurance has also partnered with the World Economic Forum to increase the scope of its holistic strategy. “Risk is clearly our business at Zurich,” says Cellerini. “To understand it, we look at current trends and how they have developed over time. We analyse data, and we partner with prominent experts, drawing on the experience of more than 800 risk engineers across the world.
He continues: “Zurich champions a holistic approach to risk management by helping businesses understand the triggers and the trends to look out for alongside how to prepare for possible consequences. By helping people understand how global risk interrelates, we give customers and communities the opportunity to plan ahead with confidence and work towards a brighter future. We do this because that’s who we are, and that’s why we strategically decided to partner with the World Economic Forum.”
Martin de Laubadère, Head of Underwriting for Specialty Lines at Zurich France, says technology has been key in facilitating a more sustainable approach to products and services, as well as the way the group operates.
“The integration of new technology is key for us within the client experience as we see it; it’s true for Zurich France, it’s true for the group. The main objective behind this is to propose simple solutions, for us to be more intuitive for our clients and the corporations. Individuals working for these corporations will benefit from these services.”
He says the importance of new technology has clearly grown over recent years, with it seen as a competitive advantage that Zurich Group is happy to heavily invest in. The use of data is critical, but so is the company’s approach to it and the digital platforms that process said data.
“At Zurich, we don’t limit our relationship with our clients to their difficult times, when a claim or a need for reimbursement happens; it goes way beyond that, as we see the relations with clients as broader and consequently being alongside our clients to accompany them much more in advance and manage not only the prevention of risks, but also the identification of impacting, meaningful trends.”
The core goal is to be as transparent as possible so that facts and data on risk and resilience can be shared as part of the holistic strategy. “In France, this aspect of
“Integration of new technology is key for us within the client experience. The main objective behind this is to propose simple solutions, for us to be more intuitive for our clients and the corporations”
MARTIN DE LAUBADÈRE HEAD OF UNDERWRITING FOR SPECIALTY LINES, ZURICH FRANCE
digitalisation is one of the three big pillars of our strategy for 2023-2025. The objective we want to achieve is to have a direct impact on our clients, bringing more services.
“Our A&H line of business provides the capacity to propose online certificates for clients for direct access. I also want to emphasise the importance of international programmes for our clients: we invest a lot in these aspects to ensure programmes can be delivered very efficiently and smoothly for the client.”
The next few months for the global insurance industry will see a number of shifts and trends – one of which is an overall increase in the number of claims being made.
Céline Garnier says Zurich France has had dialogue with reinsurers regarding autoliability trends from a claims’ perspective: “What we’ve seen is that amount doubled year-on-year from 2019 to 2021 to reach more than €200mn indemnity for one loss. Risk management is absolutely critical in managing this trend, but discussions about the ways contracts are structured and how the insured are made aware of the exposition and tools that we have in the insurance industry are also essential.”
She continues, underlining that the Global Risks Report outlines the environmental risks that are seen in the short-term and longterm as one of the most important issues by leaders in general. “This obviously has an impact in terms of responsibility, and from a political responsibility, we see a clear switch in corporate responsibility, and behind that that’s obviously the directors and officers.”
Martin de Laubadère adds that, from a D&O risk perspective, the evolution of the regulation will have a big influence on the
global insurance industry in 2023. “We at Zurich clearly have a lot of D&O expertise and leadership. The intention of the group, globally – but our intention, also, in France – is to maintain our presence to accompany our clients, bring our expertise, and share that with them, working together to face this risk and be more resilient as the future unfolds.”
“Other challenges will be the CAT evolution due to climate change and the necessity to adapt our insurance proposition with this evolution,” adds Denis Stasinski. “Risk assessment is and will remain key to properly understanding the impacts to help our customers adapt their business model.”
“Digital transformation has a financial cost. But it also has a sustainability cost, because you consume more servers. It’s a different cost to paper, and you’re not cutting down trees, but there’s still that energy usage question”
MATHIEU PAUWELS COO, ZURICH FRANCE
Data can help insurers reduce their exposure to risk and create more satisfactory experiences for customers – but only if they make the most of it
WRITTEN BY: ALEX CLERE
Data is critical to the insurance industry. It can be the difference between identifying risk and not; pricing policies correctly and not; retaining customers and not. Traditionally, legacy systems and siloed ways of working have prevented insurance organisations from making the most of the data they collect and store – but, to transform the industry meaningfully, insurtechs and incumbent insurers must get to grips with their data.
When it comes to making better use of data, the first thing insurers can do is reassess what data they already collect. Is every datapoint you collect necessary, and are there things you’re not collecting that you really ought to know? Data creates an allencompassing picture about the customer and the nature of the risk you’re insuring, so collecting the right data is a critical first step in the lifecycle of a policy.
Chris Royles, EMEA Field CTO at Cloudera, says: “Data is vital to helping insurance companies understand their customers and assessing risk. Today, there are many data sources that simply weren’t available a decade ago. From ‘intelligent’ vehicles reporting accidents in the moment and IoT devices monitoring buildings, through to the use of real-time weather data to model risk more accurately in shipping insurance.”
So what information could insurers collect, but don’t always, that would improve insurance decisioning or reduce risk for the underwriter? David Sexton, VP & Head of Insurance Practice UK&I for Cognizant, believes that insurers are slowly bringing connected devices into the data mix.
“Historically, insurers have relied on their vast quantities of historical data to advise pricing and customer engagement,” he says. “However, we’re now seeing these incumbents increasingly using unstructured data and new sources of external data such as IoT devices, which offer many more potential opportunities to collect data to inform decision making and risk performance.
“Collecting and storing this vast amount of data is pointless and expensive unless you can derive insights from it to understand both the risk and the customer better. Insurers will be competing with new entrants to the sector such as hyperscalers, with the winner being the ones able to utilise their insights to price better and provide better service.”
Both Sexton and Royles believe that fitness trackers are a good example of the way that insurers have changed their approach to data, with health insurers now using the data shared through such devices to improve decisioning and encourage less risky behaviours from customers. “This helps to create lower premiums and reduces the risk for the business – both parties win,” Sexton says.
Nevertheless, Cloudera’s Chris Royles still believes there is an area of opportunity that insurers are generally not exploiting: “One gap in the current approach is insurers failing to enable customers to engage with them when life and asset circumstances change. By bringing the customer into the loop – in a secure and trusted manner –insurers ensure a better customer experience.”
“Data is vital in helping insurance companies understand their customers and assess risk”
Are insurers making the most of the data they collect?
Once you guarantee that you’re collecting the right data, the second important step in any data strategy is to make the best use of it internally.
“Insurers are not making the most of data they already have access to,” Royles asserts.
“In fact, recent research shows that up to 75% of data in-house is not being accessed and used by insurers.
“This is because a lot of data is still being stored in old legacy systems, which can make it hard to unlock and access. Also, valuable data is often unstructured, such as underwriting and claims notes. As a result, insurers often don’t know the power of the data they actually have available to them.
On top of this, not all insurers know exactly which business use cases can be optimised by which data. All of these issues make it very difficult for insurers to make the most out of the data they already have in their organisation.”
Royles emphasises that it’s important to put the customer at the heart of your data strategy, as it’s their data in the first place. “This means they can act as stakeholders in their own data management, and access and maintain their own data when needed. This will drive the customer experience and create more regular engagement.”
Both our experts believe that customers are on the lookout for hyper-personalised service.
“Make sure you’re prepared for the next wave of data – whatever that might be”
CHRIS ROYLES EMEA FIELD CTO, CLOUDERA
“In today’s competitive market, insurers must be able to collect, process, store and analyse all of their data,” Royles says. “Regardless of whether it is structured (age, location, asset value) or unstructured (images of burglaries or car accidents, voice recordings); whether it lives at the edge, in a data centre, public cloud or a hybrid cloud, data can provide insight.”
He continues that insurers can then use that data to apply machine learning (ML), advanced analytics and artificial intelligence (AI), as well as identify patterns, detect anomalies and assess risk more accurately.
But Cognizant’s David Sexton argues that restrictive regulation is preventing insurers from embracing innovation fully when it comes to their customers’ data: “96% of insurance executives responding to Cognizant’s survey indicated that cloud computing was delivering strategic value to their business, whilst 84% shared the same belief about AI and ML,” he says.
“However, the use of consumer data is still heavily regulated, particularly when it comes to what is permissible when measuring and identifying an individual’s risk rating. The need to tackle and comply with these current and emerging regulations is putting significant pressure on incumbent insurers to ensure their data security, consumer protection, and sustainability solutions and initiatives meet regulatory expectations. In turn, this is reducing the speed at which insurers can transform their approach to using their data.”
“To stay relevant and optimise growth, insurers need to focus on business transformation, and digital strength will be a clear driver for doing so”
DAVID SEXTON VP & HEAD OF INSURANCE PRACTICE UK&I, COGNIZANT
So insurers are being squeezed from practically every conceivable angle: regulatory burden is preventing their freedom to innovate, yet customers want hyper-personalised experiences and senior stakeholders want reduced risk –the technology is there to deliver both. If not exploited to its fullest, however, opportunity becomes threat. What words of advice do our experts have for insurance organisations looking to get more out of their customers’ data?
Cognizant’s David Sexton says: “To stay relevant and optimise growth, insurers need to focus on business transformation, and digital strength will be a clear driver for doing so. Executives need to develop comprehensive data strategies that make use of all the information available to them through investment in technology. Investment in data and analytics is becoming critical to enable quicker, more insightful business decisions that identify return on innovation, reduce fraud and improve risk assessment.
faster, more efficient services.
“In turn, insurers are benefiting from higher customer retention rates and lower agent turnover. These advances are becoming crucial in setting insurers apart, with low prices no longer being enough to entice customers.”
Cloudera’s Chris Royles adds: “In recent years, we’ve seen insurers collecting and analysing a huge variety of data sets, allowing them to customise their offerings and deliver a better service. The next opportunity is likely to be just around the corner; we just don’t know yet what this opportunity will look like.
“So my advice is for insurers to make sure they’re prepared for the next wave of data – whatever that might be. Only when providers recognise what data is held, and the customer is seen as the primary stakeholder, can the data be managed with the focus and care it deserves.
“Insurers must also have a unified data platform that enables them to apply ML, AI and advanced analytics to data, ensuring they can harness the power of new data sources as they become more varied and complex. This will allow them to gain better customer insights and provide more accurate policies.”
GmbH Peter Stockhammer understands the importance of partnerships to help develop the best possible products and services for their customers. These partnerships link both ends of the product chain, technical expertise from outside of the insurance industry to the feedback from the policy holder.
Generali Vitality is a wellness programme designed to encourage and reward the healthy behaviours of policyholders via the provision of tools and incentives to improve their overall health and wellbeing. Stockhammer has had a long career in the life insurance space, but says he has taken inspiration from all kinds of sectors to shape his attitude to industry transformation; what has chiefly guided him is considering what can be learnt from other industries.
He says: “I was once invited to Porsche and they showed me how they build cars. They showed me what they call the marriage of the chassis with the engine. I thought, ‘It’s fascinating how they’re doing this and what we can do in issuing the policy to give transparency to the customer, and can we improve things to be faster?’.”
It’s not just limited to learning from the technical expertise of other industries, but also in balancing that with the evolution for insurance provision, enabling it to become even more customer-centric and developing a deeper relationship with policyholders.
Stockhammer speaks of becoming a ‘lifetime partner’ with Generali’s customers, utilising their relationship with smartphones as the way to become part of their life and transition their insurance interactions from protection to prevention. A tipping point for him, personally, was seeing a survey where people were asked what they couldn’t live without; less than half listed their current partner, but 97% said this of their smartphone.
Generali Vitality is an exciting fusion: a historic player in the insurance space, they also develop trend-setting digital products to interact with their customer base.
As such, Generali Vitality offers a personalised approach to wellness by creating health goals and rewards based on a policyholder's current health status and lifestyle. Through the app, policyholders can earn points for engaging in healthy activities such as exercise, getting regular check-ups, and even shopping for healthy foods. The more someone engages with the program, the more points they collect, and the deeper the level of value to the rewards.
Stockhammer explains that their experience and research leads them to know how their policyholders like to use the app and the results they value the most, like the small, simple incentives.
“You have a weekly fitness activity or physical activity goal and, if you reach it, you will be immediately rewarded. There’s gamification, so there’s a wheel of fortune
where you’re getting a push notification that says, ‘Congratulations, we have achieved the goal, here is a reward for you’. You can then spin the wheel and randomly get one of the awards.”
It’s this attitude to gamification and continued product improvement that excites Stockhammer, as it helps welcome an insurance provider with more than 190 years of industry experience to the cutting edge of digital transformation. It also heralds a new relationship with their customers. With such modern digital tools, customers have regular contact with their product, rather than just an initial interaction before embarking on a distant relationship that’s only rekindled when a problem arises
“WE ARE SAYING WE ARE NOTICING AND REWARDING YOU AS YOU ARE CONSTANTLY DOING SOMETHING”
PETER STOCKHAMMER MANAGING DIRECTOR, GENERALI ENGAGEMENT SOLUTIONS GMBH
TITLE: MANAGING DIRECTOR
INDUSTRY: INSURANCE
LOCATION: GERMANY
Peter is Managing Director of Generali Engagement Solutions
GmbH since 2015, based in Munich. He has held executive positions in many international insurance companies throughout his career and has worked in the insurance industry for 30 years. Prior to that, he had been CEO Life of Zurich VersicherungsAktiengesellschaft in Austria since 2007. Prior to 2007, Peter held several management functions at the UNIQA Group and its predecessor companies.
According to Stockhammer, some of the individual feedback received can enlighten the development teams. It has the capacity to reveal how customers interact with and value the apps — as well as their rewards — on a day-to-day basis.
“For example, we had feedback from a lady saying her daughter is always pushing and asking ‘have you already achieved your weekly goal?’, which is because she wants to spin the wheel. So these are the things, this little nudge; it's not that you're getting a big prize, but it's this regular thing where we say we’re noticing and rewarding you as you’re constantly doing something.”
Garmin Health is enhancing the insurance landscape through the inclusion of wearable technology in the transition from traditional coverage to dynamic engagement and prevention.
If you’re interested in partnering with Garmin Health or simply learning more about what we are doing in the health space, please reach out to us!
Jake O’Connor, Global Business Development Manager, Health B2B
Garmin Health produces world class devices for corporate wellness programs, providing the best battery life and biometric sensor data in an ever-expanding industry. Founded in 2014, it has invested in connectivity solutions such as the Garmin Connect Health API and the Garmin Health SDKs to provide the maximum flexibility for partners to access this data. Combined with a global distribution network, Garmin Health offers a wide scope of services across several industries including Health Care, Insurance, Research and Clinical Trials, Gym and Fitness and Corporate Health Benefits.
How does Garmin Health operate in the insurance industry?
Garmin Health provides fully or partially subsidised devices and monetary incentives to insurance customers to encourage a healthy and active lifestyle, with the goal of engaging their members and reducing medical costs. Life and re-insurance companies use our wearable devices to stratify risk and improve their margins. Ultimately, we seek to find and relieve our customers' pain points through our comprehensive data-ecosystem that allows them
to share the data generated via our wearable sensor technology.
How do partners benefit from working with Garmin Health?
Whether it be customer acquisition, health promotion, risk assessment, or selective prevention control, we have access to thousands of partners to find the perfect solution. With the ability to bring wearable devices to customers anywhere around the globe, we are dedicated to helping you offer the best health solutions for your customers.
Where do you see the future of the insurance industry trending?
Wearable devices are playing an increasing role as insurers invest heavily in accurate risk assessment and underwriting procedures. Wearables can help detect health risks earlier and advise for quick and timely treatments. Insurers can also augment their traditional underwriting dataset with additional physiological endpoints, transitioning from a static underwriting process to a continuous, long-term assessment that provides the ability to engage and affect behaviours and outcomes.
For questions and more info, please feel free to contact me directly at jake.oconnor@garmin.com
at Garmin shares his industry insight.
This kind of customer relationship has been made possible thanks to the transformative technical tools now available to insurers in conjunction with the power of data, which allows insurers to provide a more personalised service.
Stockhammer believes that progress is causing a fundamental change in the level of service an insurer can provide to their life customers, going from a passive observer to being part of them making positive life changes.
“It pushes us towards a customer-focused approach, this ongoing communication, as we’re getting immediate feedback from the customers. This is helpful for us because we’re really having the voice of the customer immediately there.”
“IT PUSHES US TOWARDS A CUSTOMER-FOCUSED APPROACH WITH THIS ONGOING COMMUNICATION AS WE ARE GETTING IMMEDIATE FEEDBACK FROM THE CUSTOMERS”
PETER STOCKHAMMER MANAGING DIRECTOR, GENERALI ENGAGEMENT SOLUTIONS GMBH
Stockhammer believes it’s crucial for players in the in sector to take not only feedback from their customers, but to align that feedback with the expertise of their technical partners. One of the key technical relationships Generali have is with Garmin.
Garmin was founded in 1989 by Gary Burrell and Min Kao, initially focused on developing GPS devices for aviation and marine use. The company later expanded to include products for outdoor, fitness, and automotive markets. It made them one of the leading exponents of exploiting GPS technology in a consumer market place, and they have continued to develop cutting-edge technologies since, such as GPS-enabled smartwatches and cycling computers.
As Stockhammer explains, it’s crucial for deployment in the overall digital transformation of insurance to leverage this kind of expertise — to the benefit of not just the consumer, but the insurance industry trying to develop smarter relationships with their clients.
He says: “It’s a regular exchange — what can we do together next? What’s the development? How can Garmin help us? How can we help Garmin? What feedback are we getting from a customer? What’s good, what’s not good? What are they looking for? So it really is a partnership.”
Just as the feedback from policyholders can provide a different perspective, Stockhammer is adamant that being open to, and embracing, technical advances can keep Generali Engagement Solutions
products at the forefront of the industry. He believes that the change in perspective through these partnerships can challenge the established ways of doing things, pushing boundaries that previously wouldn’t have been considered.
“My main principle is to get input from other industries. It is always good to get some input and some ideas from the outside. When you are permanently working on a single piece, you have a deep expertise, but bringing in some expertise from a different, outside point of view is always super helpful.”
Data is crucial to all insurance companies, because it allows them to assess risks accurately, set premiums, and make informed decisions. By using the data to analyse customer behaviour, claims history, and market trends, improvements to customer experience can be made while also increasing profits and reducing losses. Protecting customer data is, however, of vital importance for insurance companies in: maintaining trust with their customers; preventing data breaches and associated legal and financial liabilities; and complying with data protection regulations.
With the increased flow of information from a customer regularly interacting with products like Generali Vitality, Stockhammer is conscious of just how precious that data is. It not only helps the provider deliver a better customer experience and product, but it is the cornerstone of trust between the customer and the provider.
“I think that it is important and we are showing they are confident we are not misusing this data and always telling the customer you are in control in the programme there are several places where they can engage.”
He also states how vital it is that the industry makes sure the customer feels empowered in knowing how to make changes to the use of their data and ensuring there’s a transparent relationship with their insurer.
“For each single piece, you decide what you’d like to share and give your consent. You can revoke it at any time, and if you revoke it, the data sharing is immediately stopped. The important thing is to give the customer control over their data.”
With the flow of information, expertise, and feedback between technical partners, insurer, and customer, Stockhammer is mindful that it is only possible to continue to deliver the best product by challenging any potential boundaries. He believes that, if any company embracing this kind of customerfacing technology gets too comfortable with
“MY MAIN PRINCIPLE IS TO GET INPUT FROM OTHER INDUSTRIES. IT IS ALWAYS GOOD TO GET SOME INPUT AND SOME IDEAS FROM THE OUTSIDE”
PETER STOCKHAMMER MANAGING DIRECTOR, GENERALI ENGAGEMENT SOLUTIONS GMBH
the speed of their progress, they’re at risk of losing their advantage.
“If you're thinking you have an advantage, bear in mind you don't know what others are preparing in the kitchen. Is there something that will overtake you? Immediately after the game is just before the next game, otherwise others will overtake you.”
With so many providers working to improve on the customer experience and expand the reach of this technology, Stockhammer says Generali uses the competition that inevitably arises between insurers as motivation to never rest on any progress made and instead use it to fuel their next industry-leading development. He believes that working closely with both their technical partners for expertise and their customers for insight, they can continue the evolution of insurance from just simple protection to enhanced prevention.
“We shouldn’t be so arrogant in saying we are the brains for working on such a proposition, because I have respect for others that are working on similar products. So it’s always the thing pushing us permanently to the next limit.”
“I THINK THE IMPORTANT THING IS TO GIVE THE CUSTOMER CONTROL OVER THEIR DATA”
PETER STOCKHAMMER MANAGING DIRECTOR, GENERALI ENGAGEMENT SOLUTIONS GMBH
Consumers have more smart devices in their homes than ever before, yet insurers aren’t really making the most of this connected opportunity
WRITTEN BY: ALEX CLERE
If you happen to be working from home today, chances are you’re surrounded by connected smart devices. From the smartwatch on your wrist to the smart speaker in the corner of your living room, these devices have enjoyed such widespread proliferation in recent years that around 70% of US households are now predicted to own at least one smart device.
Part of this was due to the so-called ‘COVID effect’, with consumers locked up at home embracing smart home devices to help them with chores and make life a little more connected.
In fact, according to Deloitte, the number of connected devices in American homes more than doubled during the pandemic. Deloitte surveyed more than 2,000 consumers in March 2021 and found that the average US home had 25 connected devices – up from 11 in 2019.
Could insurers better utilise smart home devices?
The growing number of connected devices in our homes raises the obvious question about whether insurers could better utilise these devices to track user behaviour, analyse risk and warn consumers if there is a ‘black hole’ in their exposure. In turn, this would then reduce the cause for claims and protect insurers’ bottom lines, which they would be able to pass on to consumers in the form of lower annual premiums.
It’s not an unfamiliar topic; after all, health insurers have been encouraging consumers to use fitness trackers for the best part of a decade – even going so far as to give them away for free or at discounted prices to encourage healthier day-to-day living and reduce the likelihood of illness or disease caused by their lifestyle.
Indeed, fitness trackers are a great example of how to utilise new forms of data alongside traditional data across the lifecycle of a policy, according to Chris Royles, EMEA Field CTO at Cloudera. “By combining insight into a person’s lifestyle with more classical forms of data like medical records, insurers have a significantly better understanding of risks related to health and how this impacts life insurance. Data is the driving force behind this real-time risk assessment, which is revolutionising the insurance industry.”
The growing popularity of smart home devices clearly means that insurers have more data in total – and more sources of data – at
Insurers need to think about how their propositions integrate with solutions in the market, as it will likely only be at the high end that the premium for a given year will cover the cost of such solutions”
Smart TVs: 69%
In a survey of 900 consumers, the most common smart tech in US homes appears to be the smart TV, with almost 70% of respondents saying they have one.
• Smart speakers: 45%
• Smart lights: 32%
• Smart doorbells: 29%
• Smart thermostats: 25%
Source: Mortgage Cadence
their disposal. Daniel Cole, Senior Managing Director at digital transformation consultancy Publicis Sapient, believes that this influx of data creates an opportunity for insurers to devise new consumer propositions.
“Fundamentally, there is an opportunity to leverage devices more, but the solutions need to align to where the peril, risk or price is being driven. Escape of water was an obvious one (and is now making traction). Theft could be next up, where integrated monitoring and alarm systems are democratising to the masses.
“Having said that, the reality is insurers will need to think about how their propositions
integrate with the solutions in the market, as it will likely only be at the high end that the premium for a given year will cover the cost of such solutions – or the propositions need to move from being single-year to multi-year policies. This shift might be more feasible in a post-pricing reform world – and also help insurers shift from being purely price/ aggregator-led to more customer-centric risk management propositions.
“It’s a big ‘if’ though, as price comparison websites still dominate new business flow, so insurers need to be thinking about the premium end or being more disruptive on renewal/cross-sell.”
“Fundamentally, there is an opportunity to leverage devices more, but the solutions need to align to where the peril, risk or price is being driven”
DANIEL COLE SENIOR MANAGING DIRECTOR, PUBLICIS SAPIENT
Do consumers trust their insurers enough to share data?
So consumers have more smart devices in their home than ever. But are they actually willing to share data from those devices with their insurers? It all comes down to incentivisation and trust.
Let’s start with incentivisation: according to market research company GlobalData, nearly 40% of consumers would grant insurers greater access to their smart devices if it meant getting something in return. The most popular incentive was, for obvious reasons, financial discounts on their insurance (65%), followed by helping to protect their home (51%).
In a cost-of-living crisis, sharing permissions with your insurer to help reduce the cost of your premiums is something that will inevitably appeal to cash-strapped consumers – but equally, some consumers will choose to de-prioritise insurance cover entirely, a much more pressing concern for insurers.
What about trust? Separate research from GlobalData, published in March, suggests that consumers are losing trust in
“Data is the driving force behind this real-time risk assessment, which is revolutionising the insurance industry”
CHRIS ROYLES EMEA FIELD CTO, CLOUDERA
big-tech companies to provide insurance products directly. When it comes to companies like Google, Amazon and Apple – the same companies that make some of the most popular smart devices in our homes – there was a notable reduction in interest, with consumers on average three percentage points less likely to consider purchasing insurance from an alternative provider than when GlobalData asked the same set of questions last year.
Indeed, as the number of smart home devices increases, so too, it seems, does the extent of mistrust. In a survey conducted by software company Mortgage Cadence, nearly three-quarters of Americans (73%) fear their smart home devices are spying on them.
Newton’s third law of gravity states that every action has an equal and opposite reaction – and perhaps the increasing normalisation of these devices in our homes is ramping up the suspicion that consumers now have towards tech providers. This may have a residual effect on insurers themselves, particularly those keen on extracting more data from their customers’ smart home systems.
Distrust in insurers is growing too. In a survey of 10,000 financial services customers carried out by Forrester, many insurers achieved lower trust ratings than banks. In fact, of the US insurance companies that Forrester sought consumer opinion about, not one achieved better than a ‘moderate’ score – defined as a trustworthiness rating of more than 74 out of 100. This may prove to be a sign of our times; the opportunity exists for insurers to utilise connected devices in a smarter and more efficient way, but whether insured consumers have the confidence to allow it remains to be seen.
Growingeconomichardshipiscreatingarising tideinfraudulentinsuranceclaims.Whatarethe trendstolookoutforandhowcanwestopit?
WRITTENBY:ALEXCLERE
There are a number of factors at play in the global economy right now that should prompt insurers to fear a heightened fraud risk in the months ahead. Inflation is rising, driven by food and fuel prices; cost-of-living pressures are squeezing household and business budgets alike. And many Western governments are beginning to question the long-term sustainability of domestic support packages, like subsidies or handouts offered during the pandemic or in response to the war in Ukraine.
In desperate times, some fraudsters will turn to desperate measures.
“We know from previous experience that when there is financial hardship, the volume of fraud increases, so we expect to see that happen as we face the latest challenge,” says Clare Lunn, Head of Fraud at UK-based insurance company Markerstudy. Lunn has over 20 years’ experience in the industry, including chairing the General Insurance Fraud Committee for over three years.
Nigel Cannings, CTO at Intelligent Voice, is an expert in insurance technology that can help revolutionise the industry – including detecting fraud. He concurs with Lunn about the nature of the threat we’re facing: “Unfortunately, in a recession, there is always an increase in fraud,” Cannings tells InsurTech Magazine. “There was a reported 17% increase in 2022, which was itself 11% above pre-pandemic levels. Surveys have shown that during a recession, people’s willingness to exaggerate claims does increase, although the number of people who view insurance fraud as a completely victimless crime does seem to be decreasing.
“Fraud increase in a recession, however, does not seem to be completely linked
to insurance fraud claims, but also to an increase in online crime. With banks getting tougher on frauds like ‘card-not-present’ fraud (which decreased 6% in 2022 in the UK), it seems people may be falling victim to get-rich-quick schemes as a means of trying to escape from those economic woes. People are more likely to ignore warning signs in the hope of getting money quickly, when unfortunately these schemes are being promoted by fraudsters. Also, there is an
increase in ‘ghost broking’ on social media, with fraudsters selling cheap-seeming insurance that is actually worthless.”
What scams should insurers be aware of?
It’s not just an uptick in fraud, prompted by the current economic doom-and-gloom, that insurers need to look out for: one trend on the rise is that of quote manipulation.
“Quote manipulation is a form of fraud where consumers deliberately misstate key facts as they shop online for insurance,” explains James Burton, VP Product Management for LexisNexis Risk Solutions Insurance in the UK & Ireland.
“It is a significant and growing challenge. Our study found 21% of consumers think it is completely acceptable to manipulate
“There is general mistrust of insurers. People hear about the bad news stories and think insurers are actively looking for ways to get out of paying a claim”
Claims farming is a constant issue whereby illegitimate third parties will encourage unsuspecting consumers to make claims, for which they will receive an introduction fee. The methods used to contact people move with the changing communications landscape, with platforms like Instagram allowing for fraudsters to get in front of a much wider audience more quickly than before, when using more traditional coldcalling techniques.
Fraud moves with the times: during COVID-19, there was a decrease in personal injury and motor claims due to the restriction on movement. However, with a return to work and travel, combined with a significant lack of investment in infrastructure, we will see a rise in ‘slip and trip’ claims and personal injury claims relating to cyclists hitting potholes. This is exactly the type of claim that claims farmers love to see.
the information they provide for a cheaper motor quote – up from 12% in 2018.
“Data enrichment can help validate information provided by the customer, offer more detail about the risk, and flag the probability of quote manipulation through solutions such as LexisNexis Quote Intelligence. This uniquely uses quote history data from across the motor insurance market. Insurance providers are then in a more informed position to query the data with the customer before the policy is incepted and help avoid policies being rendered void if deliberate misstatements are uncovered at claim.”
Nigel Cannings continues: “The most obvious and the most difficult claims to deal with are often those of an exaggerated claim following, say, a break in, with consumers adding items to the list to boost the financial claim. While this is in and of itself unsophisticated, it is quite difficult to detect. Accidental damage claims are also showing an increase during the current time of economic uncertainty. At the same time, criminals are always looking for more sophisticated ways in which to game the system.”
Governments and regulators are beginning to crack down on fraudulent
“Quote manipulation is a significant challenge, with 21% of consumers thinking it’s completely acceptable to manipulate the information they provide for a cheaper motor quote”
JAMES BURTON VP PRODUCT MANAGEMENT, LEXISNEXIS RISK SOLUTIONS INSURANCE UK&I
behaviours, but criminals intent on gaming the system will always find a way to remain one step ahead. In the UK, for example, the government introduced reforms two years ago to stem the tide of motor vehicle whiplash claims. At the time, claiming for whiplash in a cash-for-crash scenario was a favourite of insurance fraudsters – and one of the most difficult claims to disprove. The measures introduced by the government included redefining whiplash, setting limits on compensation for whiplash injuries, and banning insurers outright from offering to settle whiplash claims without medical evidence. On the face of it, the reforms should have stamped out a chunk of insurance fraud – but in reality, the result is a mixed one.
Nigel Cannings says that cash-for-crash scams have just moved north of the border, to Scotland, where the reforms do not apply. “One insurer there has reported a 60% increase in personal injury claims related to cashfor-crash between 2021 and 2022,” he says.
And Clare Lunn from Markerstudy says some claimants are “finding ways to commoditise road traffic accidents, despite the whiplash reforms”. Still prevalent, she says, are phantom passenger claims, where people not in the vehicle were still claiming injury; professional enabler-led fraud, where additional treatment is being recommended to increase costs; and a shift away from exaggerating neck injuries to exaggerating injuries on other parts of the body, like the knees or the elbows. The fact that all of
“Unfortunately, in a recession, there is always an increase in fraud”
NIGEL CANNINGS CTO, INTELLIGENT VOICE
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these techniques occur in just one line of insurance – auto claims – highlights how complex the fraud landscape is for insurers.
Will the nature of insurance scams change?
As consumers face increasing economic hardship, will the nature of insurance fraud change?
“We are expecting to see more opportunistic fraud,” explains Lunn. “This is both in terms of fraudsters looking to take advantage of customers experiencing hardship, but also with more fraudulent interactions from policyholders at both the policy inception stage as well as at claim stage as they are tempted to exaggerate a genuine incident.
“In terms of other fraudulent activities, I think it will be the case of being aware of
‘old favourites’ of the fraudsters, while also keeping our finger on the pulse to try and identify new and upcoming tricks.”
She warns there could be an increase in claims farming, where third parties encourage consumers to pursue claims for financial gain; or staged and induced claims events “as there is clearly still money to be made in personal injury claims”.
However, there is also a risk that consumers see these headline-grabbing statistics about attempted insurance fraud and dismiss it as scaremongering. “I think there is a general mistrust of insurers,” Lunn adds. “People always hear about the bad news stories and think insurers are actively looking for ways to get out of paying a claim; they don’t tend to hear that over 98% of claims are paid.”
What can insurers do to counter insurance fraud and fight back against stereotypes?
Nigel Cannings of Intelligent Voice shares his thoughts on how insurers can utilise technology to help improve their effectiveness in spotting and tackling fraud: “There are a number of ways in which technology can help. Recent advances in biometric technology have greatly enhanced the ability to detect multiple identity fraud, where the same caller makes repeated fraudulent claims using different identities.
“There has been a lot of noise in the press about ChatGPT recently, which has highlighted the effectiveness of Natural Language Processing technology to a wider audience. However, the underlying technology of Large Language Models has been used increasingly in the insurance space for some time now to improve the understanding of interactions between agents and claimants in the call centre – to assess emotion, sentiment, and deception. But this new focus on ChatGPT runs the risk of companies forgetting about issues such as data protection and security, as a lot of cloud NLP APIs do not necessarily give the type of GDPR and similar protections that can be given by specialist providers.”
Technologies like artificial intelligence (AI), machine learning (ML) models, voiceto-text, and optical character recognition (OCR) can all help insurers to monitor claims without intervening too heavily in the customer experience.
Ultimately, insurers can not afford to go too far and undo the progress they have made in improving digital journey flows. After all, consumers still expect a claims flow that is simple, seamless, and doesn’t automatically treat them like a criminal. Nevertheless, it is clear that the industry must be on guard right now in the face of both the volume and sophistication of fraud increasing.
“We need to be aware of ‘old favourites’, while also keeping our finger on the pulse to try and identify new, upcoming tricks”
CLARE LUNN HEAD OF FRAUD, MARKERSTUDY
AI is beginning to revolutionise insurance, but its continued adoption relies on the quality of data inputted and its ability to lower premiums
WRITTEN BY: ALEX CLEREArtificial intelligence (AI) is bringing about a revolution in the insurance industry – for use in customer service and claims handling, certainly, but also in areas like fraud prevention and analysis. Indeed, such is the importance of AI to the insurance sector that McKinsey, in its Insurance 2030 report published in 2021, described AI as having the potential to “transform every aspect of the industry”.
“Artificial intelligence (AI) offers benefits across the entire insurance sector,” says Meghana Nile, CTO for Insurance at Fujitsu. “Claims settlement is one area where automated technology is increasingly playing a significant role. For example, in auto-insurance, insurers can use AI to assess simple claims in just six seconds based on smartphone photos sent by the customer, compared to humans who take an average of six minutes and 48 seconds with the same information.
“Enhancement of the customer experience in the claims settlements is a big AI bonus too. Technology makes the process of buying a policy much simpler with fewer customers discouraged by the complexity of typical policy forms. And with simple queries fielded by AI, human agents have more resources to focus on more difficult service areas, which results in issues being dealt with much faster, smoothing out the experience.”
Nile also believes that AI is transforming fraud detection, monitoring potentially fraudulent activities continuously and using third-party, unstructured data analysis to give insurers extra context into those patterns of behaviour.
Nigel Lombard, CEO and Founder of Peppercorn AI, summarises: “To date, insurers have mainly focused on using AI in customer service and claims processing.
However, while the use of AI in insurance is still in its early days, adoption will accelerate over the next one or two years. Insurers that aren’t adopting the technology will be in trouble as they’ll be stuck with high expense ratios.”
Despite the rapid adoption of AI in insurance over the past few years, there are still areas where insurers are not fully embracing the
technology and leaving themselves exposed to risk, inefficiency, or avoidable cost.
“We have only started to scratch the surface of what’s possible when it comes to applications of AI in the insurance industry,” Nigel Lombard continues. “In addition to customer service and claims processing, AI has the potential to support underwriting and fraud detection, which can drastically improve both loss ratios and expense ratios. This kind of activity has been relatively underutilised to date but has the potential to disrupt the legacy systems and traditional business models that traditional providers have had in place for decades.
“AI also has the potential to use predictive analytics to analyse demand, create new products, improve pricing precision, and even determine changes to customer risk,
“AI has potential ethical risks if not used correctly but if applied right, it can be exceptionally powerful”
By Katie Simmonds, Managing Associate at Womble Bond Dickinson
“One of the issues with using AI is that it is opaque, meaning what we can't do sometimes is actually explain how the AI system works. This can create several potential risks and issues. The key dangers of becoming overly reliant on technologies is that you fail to be able to understand how you are using individuals' personal data or verify that an answer or response is 'right'. Even where the answer is 'right', there is a risk of perpetuating historic biases and discrimination into future decisions. For example, in health insurance, an individual may be unfairly blocked from certain policies. This could have knock-on effects for that individual, who may require the health insurance for a mortgage rate, potentially removing housing opportunities.
“For businesses, overly efficient use of location data could mean higher rates of rejection based on historical crime rates or antisocial behaviour. This postcode lottery begs the question of how anywhere that could meet these parameters could ever realistically level up, even with sensible mitigations? Whether it’s a third-party application or something that is bespoke, you will need a complete view and understanding of what is going in and what process leads to what comes out.
“Such is the nature of AI, it will be constantly learning, therefore this understanding must remain agile. It can only do exactly what you tell it to do, and poor instruction or understanding will not warrant a pass if the machine behaves in a way that is illegal. For this reason, we’re likely to see more appointments of a Chief AI Officer or similar role that will bridge the understanding between tech, ethics, and the legalities.”
for example. Predictive AI will be the next step once AI becomes more mainstream, but this area is still in its infancy. Once AI becomes more widely adopted and models have captured sufficient levels of data, we will start to see real-world applications of predictive AI.”
When we think about AI, one of the main insurance-led applications that comes to mind is around customer service. The technology can be used to automate firstpoint-of-contact for customer enquiries, freeing up human customer service agents to handle more complex queries or to work on other tasks within the business requiring judgement or discretion, for example. According to Lombard, this represents a shift away from customer service interfaces that work for the insurer and a shift towards customer service that works for the customer, improving overall satisfaction.
Fujitsu’s Meghana Nile elaborates:
“Customers want an omnichannel experience, which is much more achievable with the help of AI. It makes self-service claims processing much easier, dramatically improving customer experience. But insurance can feel like quite a personal experience to many and there are times
where there will be more complex claims and customers expect the ‘human touch’.
“According to HubSpot, 40% of customers who couldn’t find someone to help them with their problem are still having issues with the product or service. So, it’s clear that when implementing AI, insurers must strike the balance between digital and human interaction; not everything should be done by a machine.
“Most important, however, is that AI in insurance is ethical. To be beneficial to both customers and the insurers, AI models have to be fair, transparent, and explainable. As AI evolves, becoming more complex, the companies that develop and provide the technology – and all stakeholders involved in AI – must practise ethics in each process.
“If insurers aren’t careful, unconscious bias will creep into AI if the algorithms are set up by a narrow group of people. If there’s a lack of diversity among data scientists –the experts that develop and test these AI models – then they’ll only further reinforce unconscious bias. And that is why we must consciously build solutions that constantly look out for these biases, preventing them from manifesting and causing harm.”
Those well-versed in AI will be familiar with the acronym ‘GIGO’, which stands for ‘garbage in, garbage out’. This refers to the principle that, if your AI algorithm is using poor data, it will return poor results. For example, if an insurer is using AI to identify
“We’re likely to see more Chief AI Officers or similar roles that bridge the understanding between tech, ethics, and legalities”
KATIE SIMMONDS MANAGING ASSOCIATE, WOMBLE BOND DICKINSON
problematic patterns of behaviour as part of its fraud prevention strategy, then bad data will diminish the algorithm’s ability to effectively spot fraud. This speaks to a much broader theme of bias within AI.
Peppercorn’s Nigel Lombard says: “Currently, risk analysis is a linear experience; it’s a one-size-fits-all approach that’s designed to favour the provider. AI on the other hand can collate volumes of data and identify behavioural patterns and trends, allowing providers to listen and react to their customers. In practice, this could mean tweaking the way a provider speaks to a customer based on what mood they’re in or creating new products following feedback, for example. Predictive modelling can take this one step further, but it’s entirely dependent on the quality of data inputted into the models.”
Meghana Nile adds: “While AI has its potential ethical risks if not used correctly, if applied right, it can be exceptionally powerful. AI can address potential bias in underwriting by identifying and eliminating any potential decision-making disparities due to race, gender, age, or ethnicity, and that’s what can make for fairer pricing.
“Another positive impact AI will have on premiums is its ability to detect fraud and identify high-risk customers. This ability enhances risk monitoring and, in turn, reduces pricing. With regulations like the Financial Conduct Authority (FCA) guideline of customer duty, this will steer the industry into taking a more holistic and analytical approach to pricing. Because AI can play a big role to estimate equitable and fair premiums, we’re likely to see its presence in insurance massively increase.”
When implementing new technologies like AI, customer buy-in is extremely important.
“While the use of AI in insurance is still in its early days, adoption will accelerate over the next one or two years”
NIGEL LOMBARD CEO AND CO-FOUNDER, PEPPERCORN AI
Yet, no matter how useful AI may be for an insurer – or even how much simpler it makes the customer experience – AI will have to lower premiums before customers fully embrace it. That is the cost of change, even change for the better: customers want to realise actual financial gain. That may take the form of reducing the incidence of fraud, and subsequently minimising loss to the insurer, or it might be something else.
Meghana Nile explains that insurance customers often misjudge the amount of cover they need, taking out the wrong policy and leaving themselves underinsured or
over-insured. This is one way that AI can help achieve savings.
“There is an opportunity for conversational AI to right this wrong,” she says. “By putting the customer in control of the conversation, they’re able to ask the right questions and AI can pick up on verbal triggers that ensure customers have the right cover in place. This can result in fairer pricing.
“Furthermore, by focusing on creating efficiencies, AI can also result in leaner operational costs and lower expense ratios, which can ultimately be passed back onto customers.”
The insurance industry has come a long way since the 1970s, when insurers were first warning about the impact that climate change would have. The industry now fully understands its obligations and large, incumbent insurers are racing to secure the coveted ‘green halo’.
But it’s not just about individual action – there is a whole generation of plucky insurtechs, climate techs, and other industry stakeholders intent on engendering widespread behavioural change, either on the part of businesses or consumers.
These are the Top 10 companies who are changing the way we think about insurance.
This month, we dip into the world of sustainability to see which companies in the industry are instigating behavioural change toward our climate
ClimateWise is a global industry initiative made up of some of the largest insurance brands working together to help fight against the effects of climate change. Members are required to disclose annually their firm’s response to climate change, and ClimateWise itself undertakes research to help insurers adapt, innovate, and respond to the threat posed by our changing planet. It is open to all insurance industry stakeholders striving to play a leadership role in the future of insurance – and includes big names such as AXA, Aon, and Hiscox.
This British insurtech is pioneering a ‘monthly subscription’ approach to contents insurance. Customers can protect up to five of their most prized possessions – from bicycles to laptops, musical instruments to jewellery – under a single flexible policy that is easy to change or cancel. Cover for accidental damage, theft, loss, and mechanical breakdown are all included as standard.
As part of its commitment to ethics and sustainability, the company gives 25% of profits to charities such as The Rainforest Trust, which is working to protect the world’s most threatened habitats.
Insure Our Future is a global campaign that started in Australia, with a mission of convincing large insurers to stop underwriting fossil fuel projects. When the group started out, industry insiders would tell them that there was no chance that insurers would voluntarily agree to stop insuring such activities. But, a decade later, Insure Our Future has achieved notable success, convincing around 40 major insurers – including AXA, Zurich and Allianz – to take action on high-polluting industries and rendering fossil fuel extraction “practically uninsurable”.
Sustain.Life describes itself as the “all-in-one carbon accounting platform”. In short, it allows businesses to measure, manage and report on their carbon impact. Sustain.Life provides comprehensive data analysis that calculates a business’ emissions and gives advice on how to achieve net zero.
It was founded in 2021 by three former Walmart executives and an ESG expert who wanted to utilise their industry experience to scale tech solutions for climate action. Businesses that are engaged with their carbon footprint and understand their climate impact are more likely to take positive action to clean up their act.
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Canadian firm Clir describes itself as a ‘clean-tech’ – startups facilitating the transition to renewable energy. Clir’s platform provides reliable, up-to-date information about renewables that is designed to encourage investment in the sector. A lack of transparent information about a particular sector can prove to be a stumbling block for securing funding, and Clir is among the growing list of companies who are tackling that problem head on.
The startup, which was founded in 2017, says it wants to “incentivise the shift away from fossil fuels”.
California-based Jumpstart is a parametric insurtech that uses publicly available data to insure customers against the risk of an earthquake. Using data from the United States Geological Survey, Jumpstart pays out when peak ground velocity reaches a predetermined level in a customer’s neighbourhood. This approach is designed to eliminate the need for loss adjusters and reduce the time it takes for payment, helping insureds to get back on their feet quickly after a quake. Typical payouts range from $10,000 for individuals to $20,000 for small businesses.
Neptune Flood uses state-ofthe-art technology and a precise mathematical algorithm to create a smarter and faster flood insurance product. Its risk engine uses geospatial analysis, storm surge and inland flood modelling to provide homeowners with greater peace of mind around flooding – which the Florida-based company describes as one of life’s most unpredictable disasters. The need is plain to see: climate change is increasing the frequency and severity of freak weather events, which is why the US has seen a gradual increase in coastal flooding since the 1950s.
This Silicon Valley-based insurtech has developed proprietary risk modelling that all starts with its ‘digital twin’ of planet earth, which can be used to detect risk in both the built and the natural environment.
For example, the digital twin allows insurers to detect structural risks to insured buildings as well as risks posed to the external networks that their customers depend on.
The company has raised more than US$100mn since its seed round in 2015, and last year was selected by insurance giant Zurich as one of 12 insurtechs redefining the future of insurance.
Kita is a UK-based carbon insurance specialist that helps companies to reduce risk in carbon credit transactions. It previously raised £4mn in seed funding and has now announced its Carbon Purchase Protection Cover, which insures the purchaser of carbon removal credits against carbon delivery risk. It is hoped the product will remove a significant protection gap that exists in the carbon removal market and lead to greater flows of capital into carbon removal projects, which have received an influx of interest from brands looking to demonstrate their eco credentials.
As the natural world changes around us, there is a need for innovative technology solutions that prevent insurers from falling behind. US-based Salient provides forecasting technology that can provide an accurate picture of the weather 2-52 weeks in advance.
Conventional forecasts are based on numerical models of atmospheric conditions, but Salient uses ocean and land-surface data to predict the weather, which it then combines with machine learning. The result, Salient claims, is up to two times the accuracy over competitive forecasts.
