AXA XL launches first-of-its-kind risk innovation incubator

AXA XL Insurance has launched a first-of-its-kind risk incubator to give much-needed structure and process to innovation in the risk and insurance space. The so-called ‘Cube’ aims to deliver a bespoke risk management, technology or insurance solution for a client within six weeks. “This is a unique proposition in the insurance market that addresses an underserved need and will help drive innovation,” said Philippe Gouraud, global head of strategic distribution at AXA XL. “AMRAE’s latest barometer showed that risk managers are still not making full use of new technology and we believe it is our role, as their partner, to help them adopt emerging solutions, some of which we already have experience with,” he told CRE. Cube brings risk managers together with AXA XL’s risk and innovation experts, alongside brokers and other external experts, to develop bespoke solutions for complex risks. The insurer has piloted the concept with a number of clients and is now opening up the service to other large clients globally. “We are now looking to recruit the 2020 Cube cohort and will run the first projects through next year. We are looking to identify clients that are committed and that would benefit, and any customer that wants to improve their risk profile is welcome to start a conversation,” said Mr Gouraud. Cube uses a structured approach to innovation. The incubator involves a series of workshops to experiment and test new solutions, ultimately resulting in a prototype and a fully costed business case. Coordinated by a core team in London, it gives clients access to AXA XL’s digital and analytics experts, risk specialists and, potentially, its technology partners. AXA XL has invested in and/or partnered with a number of technology startups and research bodies in a wide range of specialisms, including autonomous vehicles, AI, robotics and cyber. For example, it has been working with Oxbotica – a technology company with a focus on mobile robotics and autonomous systems – and has partnered with IoT-enabled cargo-monitoring company Parsyl. Past efforts to innovate and provide solutions to large corporate clients have been unstructured, with various projects taking anything from months to years to achieve similar outcomes to Cube, according to Mr Gouraud. In contrast, Cube involves a consistent and replicable process to create innovative solutions using a tried-and-tested methodology, he said. “Historically, innovation in the insurance industry has not worked well enough, but I believe we have reached the point of maturity where the process of innovation needs to be professionalised. It is important that we walk down an established path – that there is a method that can deliver the desired outcome,” said Mr Gouraud. “It’s called Cube because it is like a box. You open the box and find the process – the tools, timeframe and deliverables – you need. It’s a roadmap to success,” he said. Adding: “It might be that there is no available solution to the problem, but rather than an endless process, Cube provides a focused and well-trodden path with experts that can support and guide the process.” Cube is aimed at risk management-driven corporate clients with complex risks, according to James Martin, global client management leader at AXA XL. “Cube should benefit risk managers that are open to collaboration and want to take an innovative approach,” he said. Clients can approach the Cube with almost any risk-related problem, such as a high frequency or severity exposure, or a risk associated with a new technology or business model. The solution will aim to improve the organisation’s risk profile, rather than sell insurance, said Mr Martin. “Cube is not about insurance, but about building operational resilience and effectiveness,” explained Mr Gouraud. “The outcome for our clients could be a piece of technology, a risk management scheme, a risk transfer mechanism or a combination of those,” he added. Cube is not structured around any one particular solution, according to Mr Martin. “We want to create the space to ask the right questions and challenges. It’s not about finding a problem for a solution, it’s about understanding the needs of clients and then building a solution,” he said. However, there is emphasis on using technology and data to reduce risk. For example, AXA XL has helped clients incorporate autonomous vehicles in hazardous spaces, use wearable devices to reduce workplace accidents and injury, or improve the reliability of service delivery to customers. “There is lots of technology and innovation that can be used to improve a company’s risk profile. The incubator now gives customers access to these with the objective of improving their risk profile,” said Mr Gouraud. The cost of a Cube project is shared between AXA XL and clients, and requires a level of commitment from risk managers and their organisations. “It is important that participants in the Cube commit to the process. AXA XL commits its experts and experience – we bring a lot to the table – and we need customers to bring the same level of commitment,” said Mr Gouraud. “It is co-funded by us and the client, but more important is the commitment of resource by the client. They have to have skin in the game for this to work,” he said. Clients are also free to involve their broker and other external advisers, as well as internal stakeholders in any Cube discussion. “The successful companies of tomorrow will be those that share knowledge and partnerships. The days of proprietary solutions are gone. The incubator process and working in cohorts is the future, not just in insurance, but in other sectors,” said Mr Gouraud.

AXA XL launches first-of-its-kind risk innovation incubator

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