transformers
14 November 2022FeaturesReinsurance

You don’t need to change the world: the next big thing in insurtech may be little

Investors may be more picky, and valuations less frothy, but the insurtech market continues to grow and transform the industry. Already estimated to be worth $16.6 billion, some forecast the insurtech market to be almost 10 times that size in a decade’s time.

While such growth may seem incredible, it’s probably partly explained by the breadth of the sector—encompassing everything from reinsurance placement platforms to artificial intelligence and automated claims solutions. To discover what types of technologies are currently disrupting the market and what might be next, Intelligent Insurer online gathered a group of experts to give their insights: Sebastián González, head of sales LatAm at Bdeo, which specialises in “automation and efficiency around inspection processes” in underwriting or claims, mainly for property and motor insurance; Todd Rissel, chief executive officer of e2Value, a web-based insurance-to-value solution that helps property and casualty and mortgage-related companies value their portfolios; Ross Wirth, head of client management technology at CyberCube, a cyber risk analytics platform for the insurance industry; and Justin Davies, head of region EMEA for Xceedance, which provides strategic operations support, technology, and data services to drive efficiencies for insurance organisations.

“You have some 250,000 claims coming in, how will you handle that?” Todd Rissel, e2Value

Something old, lots new

It’s important to note at the outset that insurtech is not entirely new. Rissel said that his company refers to itself as “mature-tech”.

“We’ve been doing this for 22 years,” he pointed out. Nevertheless, there has been heightened interest over the last five or six years, he added.

The range of solutions that have benefited is broad, according to Davies, but he groups them into three basic buckets: technologies for distribution within insurance; those using technology such as the internet of things, to deliver new products; and finally, companies using technology to improve productivity and efficiencies—in operations, for example.

“That’s not probably as sexy as distribution or new product, but it’s equally important,” he said.

According to the panellists, there are a few areas in which insurtech is having a particular impact at the moment. One, said González, is the “visual intelligence” that businesses such as his harness for underwriting and claims—using video and photos combined with artificial intelligence to quantify and categorise damages, for example.

“That is coming through more and more now,” Davies agreed. “We see that as quite a big shift starting.”

Another is automation—with, again, much of the activity in claims. Look to Florida, for instance, and the aftermath of Hurricane Ian, said Rissel. “You have some 250,000 claims coming in, how will you handle that? That’s where technology is helping in the process.”

Even where full automation is some way off, the adoption of “self-service” models is increasingly widespread.

“I’m seeing a lot of interest in insurers in how they can get the traditional robust processes that require qualified people into the hands of the policyholder,” said González. “Automating processes starts with creating simple, accessible and flexible processes.”

“It doesn’t have to be a billion-dollar idea to make a difference.” Ross Wirth, CyberCube

Horses (and carriages) for courses

There remains plenty of scope for further development, and many areas have yet to be truly touched by technology. So while PPL and Whitespace have transformed placement with their platforms, bordereau remains “horrifically archaic”, said Wirth. It’s the subject of a lot of conversations, he said.

More generally, there is a raft of potential improvements in how data is harnessed.

“One of the dirty secrets of insurance is that it’s one of the oldest industries founded on data from the get-go. It was literally written on the hulls of ships crossing the pond. But how the insurance industry has utilised that data has woefully lagged a lot of other industries,” said Wirth.

At the same time, however, Rissel warned insurers to be wary of falling into “delusional exactitude”.

“It’s where they think more data is always going to give them a better answer,” he explained. Just because an insurer has data going back more than a century doesn’t mean it will always be useful.

“The carrier that uses 150-year-old data will have the best rates for horses and carriages,” he joked.

Crucially, though, while insurtech is used to thinking big, it shouldn’t eschew the small improvements that can improve processes. As Rissel said, terrific ideas may still make a difference even if used in only part of the business.

“The first thing you do is leave your hubris at the door, then there’s some great information and businesses out there you can embrace,” he said.

Or, as Wirth put it, it doesn’t have to be a billion-dollar idea to make a difference.

“Not every organisation needs to be a unicorn to be successful. This is a huge industry, and there are plenty of small areas that need a lot of help.”

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