Insurtech focuses insurance industry on new customer solutions

Insurtech offers real opportunity for the insurance industry to deliver innovation and will provide risk managers with new solutions for risk transfer and mitigation, according to two new broker reports. Both JLT Re and Aon agree that insurtech will help transform the insurance industry and deliver for clients, rather than being a negative disruptive force to the traditional insurance model. On launching its insurtech report at the reinsurance Rendez-Vous de Septembre in Monte Carlo this week, JLT Re said new technology and innovations have the potential to transform the insurance market for buyers, with carriers now more focused on solutions for customers. Mike Reynolds, global CEO of JLT Re, said: “The potential for change is huge, with insurtechs looking to reinvent the way products are created, priced and distributed. To do this, they are harnessing cutting-edge innovations such as robotics, artificial intelligence, the internet of things, big data and predictive modelling. Improving the customer journey and cutting costs are key motivations, with considerable attention so far being focused on distribution and claims handling. “Equally as important, some insurtech firms are also exploring how to leverage existing data and analytics capabilities to provide carriers with more meaningful risk insights and potentially shift the (re)insurance proposition from protection to prevention.” Aon’s Global Insurance Market Opportunities report highlights how insurtech can support growth in the traditional insurance industry. In particular, Aon notes that three key areas for growth – cyber, casualty catastrophe and pathogen risk – could become more insurable through collaborations with insurtech companies and result in new, innovative products for insurance buyers. Aon also looked at ways that analytics and insurtech will change the insurance landscape. Driverless vehicles and lower accident frequency could result in a 40% fall in US motor insurance premiums by 2050, but the severity of accidents could increase and liability may transfer from drivers and their insurers to car manufacturers and software companies, Aon states. Paul Mang, Aon’s global CEO of analytics, commented: “We know that the insurance sector is facing challenges in the current macroeconomic environment, so we should expect leading organisations in the industry to drive change. We are already using technology to make us more efficient as a sector, and to expand into emerging risk markets. However, the true transformation will happen as we re-imagine risk management altogether. In this new environment, collaborations, or what we call open architecture innovation, will be key to creating net new growth.” Insurance buyers will also benefit from competition in insurtech among (re)insurers, as commercial benefits start to differentiate players. David Flandro, global head of analytics at JLT Re, said: “With (re)insurers’ profitability being squeezed by higher underlying loss ratios and increased expenses, some firms are now struggling to generate returns above their cost of capital. New technologies, and the innovations provided by InsurTech companies in particular, are therefore moving front and centre of incumbent carriers’ minds as they explore opportunities to gain competitive advantages.”

Insurtech focuses insurance industry on new customer solutions

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Want to read this article?

Read Next

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Favourable aviation insurance market for now, says WTW

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