Lakshan De Silva, chief technology officer at Intellect SEEC
Intermediaries such as brokers or managing general agents (MGAs) need to lift their game for insurers to better understand their clients’ needs and improve their products and services based on this, said Lakshan De Silva, chief technology officer at technology firm Intellect SEEC.
Insurers should take a fresh look at the value chain they use with regards to why, how and what data is being collected, he suggested. He noted that insurers working through brokers or MGAs can end up with limited access to their clients’ data.
“Historically, insurance has never been about the insured. It’s always been about the broker, the carrier or the reinsurer,” De Silva said. “Insurers were quite happy to price what they see without really knowing the customer.”
Even though some insurers may have been collecting data for over a hundred years, many still know very little about the customers (as in the insured), he said.
“This is part of the reason why there is so much premium leakage and why margins in insurance are often quite low,” De Silva said. “Insurers need to be customer’s first, and rely less on brokers and intermediaries in order to re-focus their business.”
This is likely to require some heavy upgrades on the technological side in order to handle and process the data such as investments in technology enabling both pushing data as well as pulling data, along with some solid enterprise grade machine learning (not just toying with chatbots), he explained.
“Buying a broker could be a first step,” De Silva said. “Digitising the broker would be a second step. Intelligent automation through machine learning could be a third step,” he suggested.
Firms like Amazon are much better and quicker in finding out the most important characteristics of customers that are needed to drive sales, De Silva suggested. “Within 10 years, a firm like Amazon know more about a customer than any insurer has in a hundred,” De Silva said.
“Tech companies like Amazon have made it obvious that it is no longer acceptable not knowing your customer intimately and have regular interactions with them.”
This also applies to commercial insurance and if carriers don’t change their interaction pattern with clients they risk becoming a commodity and therefore turn obsolete, he warned.
“Insurers need to move to a high-touch world in underwriting,” he said. One way of developing such a new approach could be by developing proactive loss prevention opportunities for clients.
“That is the kind of service you would expect from a modern insurance company through the use of data,” De Silva suggested.
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Intermediaries, MGA, Broking, Technology, Data analytics, Lakshan De Silva, Intellect SEEC, Insurtech, Global