In association with Swiss Re, Baden-Baden Today conducted a survey of senior industry executives
In association with Swiss Re, Baden-Baden Today conducted a survey of senior industry executives ahead of and during the conference. The responses to various key questions will be published in this newsletter.
If the industry makes insurance more accessible, will this help to close the protection gap?
Definitely, especially in the current digital age. According to Peak Re’s latest research, one of the key underlying factors for such a gap is the missing trust between policyholders and insurers. By making insurance products and buying channels simpler and more customer-friendly, as well as having regular personal interactions between the two parties, this will help to build understanding, trust and loyalty from customers, which will stimulate their willingness to buy insurance and ultimately narrow the protection gap.
Franz-Josef Hahn, CEO, Peak Re
Certainly: simplicity, availability and affordability of insurance will help to close the protection gap. However, efforts to raise awareness and increase the demand for insurance, especially by working with other sectors outside the insurance industry, are very necessary.
Since the protection gap concerns mostly low income populations or informal sectors in developing countries, the insurance industry should find ways of contributing towards the mobilisation and education of the demand side.
Corneille Karekezi, CEO, Africa Re
Yes. In a region with low financial literacy and low affordability, simplicity and accessibility can be the key to closing the protection gap. Insurers should strive to design lucid products with minimal terms and conditions that can be understood easily. Hitherto untapped and convenient channels of distribution such as convenience stores can be utilised to increase the coverage ambit.
However, insurers would have to create an enabling environment at these new outposts, for which a long-term cost-benefit analysis would have to be done.
Alice G Vaidyan, CMD, GIC Re
Big data: an opportunity or the next asbestos?
Big data provides a tremendous opportunity for the industry to reignite and reimagine its purpose in society. If our industry can truly harness the power of big data, we can move away from just reimbursing claims following an event and move towards predicting and preventing damaging events happening in the first place. Data analytics is facilitating a paradigm shift in our purpose and our interaction with customers. It ought to be wholeheartedly embraced.
Stephen O’Hearn, global insurance leader, PwC
Big data is an opportunity for those who know how to deploy it and a threat for those who are unaware of its potential. It can lead to higher underwriting profitability when used in predictive modelling or saliency analyses enabling carriers to find areas of risk or return before others do.
On the other hand, if others are using it effectively and you are not, you may be on the wrong side of adverse selection, meaning that your existing underwriting criteria may no longer be sufficient, and you may not yet be aware of it. With longer-tail lines, this may take several years to manifest.
David Flandro, global head of analytics, JLT Re
The vast amount of data generated from our digital footprints can be very valuable in enhancing risk pricing and loss reserving. The trick is to harness external data sourced to enrich the risk and claims data insurers hold. The challenge is getting the data into a usable format.
When the data has been harmonised into a format ready for easy integration with analytics tools, big data will change the way insurers do business, for the better.
Adrian Rands, CEO, QuanTemplate
