Parima board member urges corporate insurers to uplift technology investment

Personal lines such as motor, health and life insurance are all incorporating emerging technology like telematics, wearable tech and the Internet of Things. Similarly, some personal insurance policies are being delivered digitally and on a usage basis. But these developments are not being matched in the corporate insurance market. “It is a huge issue,” Mr Tunstall told Commercial Risk Asia during an interview at the recent CEO Insurance Summit in Hong Kong, organised by Asia Insurance Review. “There is a potential for massive innovation in the corporate insurance market but with the consolidation that is happening between insurers, corporate buyers may actually have fewer options and less choice. And when they look over the fence into the personal lines market, they see a wealth of opportunities opening up and much greater innovation and choice. They could feel they are being left behind,” added Mr Tunstall.hideIt is not that there is a total absence of new services in the corporate space but more that the rate and extent of development is just not great enough, said the Parima board member. “We have seen some examples of new, technology-led services. Some underwriters and brokers are using technology to create more joined-up insurance programmes. But the pace of change is nothing like what has been seen in the personal insurance market,” explained Mr Tunstall. Advances in technology are also leading to new business models for insurance. For the growing number of insurance products that exploit automation and digital distribution, the change of operating model is in part made possible because of the commoditised nature of the risk involved and the purchasing behaviour of retail consumers. In contrast, corporate insurance programmes are often more complex and bespoke. But Mr Tunstall said there is enough diversity among corporates’ insurance demands to warrant greater use of some of the innovations seen in the personal insurance market. “For any large corporate buyer, there will always be a role for a good broker with experience that is able to design an insurance programme specific to a company’s needs. But there may be other lines within the same company that have more commoditised requirements. In these cases, speed, transactional efficiency and cost savings are perhaps more critical for the business,” he explained. Mr Tunstall identified employee benefits as one corporate line that could be ripe for more technology-led innovation. “There are definitely opportunities within this space for technology to be used to speed up systems and processes and improve the level of transparency,” said Mr Tunstall. “But I just don’t see insurers grasping the nettle,” he added. The personal insurance market has also seen a number of new entrants that offer non-traditional services and operating models based on the use of new technology. Commonly cited examples include health insurance start-up Oscar, which markets its use of medical data or German-based Friendsurance, which offers peer-to-peer insurance based on social networks. The possibility of large, global retail brands such as Facebook and Google entering the insurance market has also been a topic of discussion within the industry. The likelihood that these same brands will enter the corporate insurance market is seldom brought up. But Mr Tunstall said there is theoretically no reason why the same “disruption” cannot take place in the corporate insurance space. “Most sophisticated large corporate buyers regularly review their partner relationships. There is nothing cast in stone. But any insurance product from a non-traditional insurer would have to look acceptable to the board and be credible in terms of competitors’ offerings. At the end of the day, it is still about trust, credibility and having confidence that claims will get paid appropriately,” concluded Mr Tunstall.

Parima board member urges corporate insurers to uplift technology investment

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