25 October 2017Insurance

RPA more disruptive in re/insurance than ‘useless’ blockchain

The use of robotic process automation (RPA) has the potential to become a greater disruptor to the industry than blockchain, the application of which in reinsurance will be limited, Artur Niemczewski, CEO of Pro Global, told Baden-Baden Today.

“Blockchain is useless in reinsurance, because it aims to solve two problems—one of which we are completely unable to solve, and the second problem we don’t have,” he said.

The problem he believes the reinsurance industry is unable to solve is the standardisation of a single data entry point, and the massive shift in behaviour it would require to achieve this.

“We have tried to solve the single data entry for the last 50 years, and we’re still nowhere near. It’s not about blockchain, it’s about behaviour.

“If we can’t change behaviour then no technology is going to help us,” Niemczewski said.

He cited multiple initiatives in the past—such as a few examples coming out of the Lloyd’s market—which have been unable to solve the issue of the industry agreeing on a standard for the entry of data.

The second problem blockchain aims to solve—which he believes the industry does not have in the first place—is the problem of trust.

Niemczewski examined parallels between blockchain and the emergence of cryptocurrencies such as bitcoin, which have been widely used to trade securely with anonymous parties.

“Blockchain can be brilliant but you have to understand the application,” he continued. He cited the diamond industry where the use of blockchain is much better suited—especially when parties may not trust each other.

“We don’t have a problem of trust, because the re/insurance industry is business to business; it’s heavily regulated, you have to have your credit rating and you have to be good with your money when it comes to claims payment,” he said.

Niemczewski believes RPA will be a much greater disruptor to the industry, where task-led jobs will be eliminated and will encourage individuals to improve their knowledge for more complex, technical issues in claims.

“The quiet revolution is RPA; everybody is looking at it already,” he said.

These processes can free up a lot of talent to innovate more within the industry, he explained, as well as provide opportunities for better assessment and analysis of risk.

“If you have a greater pool of well quantified data you can make much smarter decisions,” Niemczewski concluded.

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