Using technology to reduce the renewal burden 

By aligning data, insurers and risk managers can spend more of their time helping companies manage risk, according to Jonathan Newbery, head of digital experience at Zurich Commercial Insurance and Lars Henneberg, head of global risk management at Danish shipping company A.P. Moller – Maersk

Despite ongoing digitalisation in the insurance market and wider business world, the renewal process in the large corporate insurance sector is largely unchanged. Centred around an annual renewal, it involves a time-consuming and largely manual process of collating and exchanging data. Digital adoption and the huge possibilities that this opens has not been front of mind, until now.

Game changers

While there are multiple technologies that are enabling digitalisation, the growing adoption of Application Programming Interface (API) technology and Risk Management Information Systems (RMIS) is a significant step in driving positive changes in the large corporate insurance market through greater data alignment.

Brokers and insurers in this space are beginning to develop API capabilities that enable their systems to communicate and share data with those of their customers, trading partners and third-party service suppliers. Zurich, for example, was one of the first insurers to create an API suite for commercial customers in 2020, launching Zurich Exchange in 2022, a global API marketplace with over 50 open APIs in one place.

Connecting is only half the story. Recent years have seen many large corporates invest in RMIS, software platforms that help collect, manage, analyse, and report risk-related information. These systems have evolved from being repositories of risk information to wider integrated risk management systems that can interface with service providers. Once data is uploaded or updated on the RMIS, the possibility is there for it to be automatically shared with selected parties including brokers and insurers. And for companies that are not yet ready to invest in a RMIS, Zurich can provide a portal that enables them to connect with the insurance market with tools that support the risk management process.

Transforming the renewal process

Data alignment between insurer and insured would benefit almost every stage of the insurance process, from underwriting to risk engineering and claims. Among the biggest initial wins, however, would be in the submission and renewal process, which involves the collection and movement of large amounts of data.

A complex insurance programme renewal currently takes many months of work for the risk manager, broker, and insurer, with information exchanged via spreadsheets and even paper documents. Valuable expertise that could be creating value or innovating is tied up in a process that appears transactional and inefficient. Insights and value are too often lost in the process while inefficiencies and frictional costs add to the total cost of insurance.

By aligning and sharing data, however, risk management departments will be able to free up time currently spent on administrative tasks and contract management, focusing resources on more valuable tasks, such as risk analysis, loss prevention and risk management. Meanwhile, underwriters and brokers would be able to allocate more of their time to understanding customers’ risks and creating tailored solutions.

Data should also be timelier and more accurate. Technology could help reduce incidence of missing information and errors that are an inevitable consequence of manual inputting and data sharing. It should reduce uncertainty for underwriters that comes from insufficient data on significant risks – uncertainty that may then be reflected in more cautious coverage and/or pricing. Similarly, risk managers may also find it easier to demonstrate to their insurers that risks are well managed and controlled.

Enabling innovation

Sharing accurate and up-to-date information could enable a move away from an annual policy renewal in favour of continuous contracts, with positive implications for the insurer/insured relationship. Rather than being swamped by processes, a more effective flow of information should result in improved service levels by insurers, as well as lead to better products and services.

Real-time information and better insights could spark more fundamental product and service innovation. Sharing of data enables insurers to expand their value proposition well beyond risk transfer. It will help unlock insurers’ intellectual capital and enable them to open up their engine rooms to customers, with enhanced services in areas like captive fronting, claims management and risk engineering.

Significantly, a more efficient flow of information could shift the transactional mindset of insurance in favour of a more collaborative approach in which both parties are working with the same data. A.P. Moller – Maersk (Maersk), for example, has been working with Zurich’s Climate Resilience team to understand and model the potential impact of climate change and its property assets, identify those as high risk, and then recommend steps to improve resilience and business continuity.

Baby steps 

While the benefits of greater data integration are clear, technology alone will not produce change. People are key to the success of technology and its ability to facilitate more efficient and effective processes. This is very much a people topic, and a successful transition will need to be approached as a change management project that has the buy-in and support of its users.

Parties also need to be pragmatic and flexible as they work towards the goal of a free flow of consistent and reliable data. Given the bespoke nature of large commercial risks, aligning data between the various parties will be a challenge, at least initially. However, the experience of using APIs over the last four years has shown that data is generally robust, and that organisations are finding solutions to better align data, or at least work with what is reasonable in the meantime. Maersk has developed a benchmarking tool that uses aggregated industry data to identify and trigger further investigation of outlying property valuations.

Building momentum

Two years ago, when Zurich launched a new digital strategy for its large corporate risk business, it was hard to get buy-in for the concept of data alignment from the market, where it was often argued that commercial risks were too complex for digitalisation. Thankfully, attitudes are changing. In fact, we now see more and more risk managers and their companies pushing insurers to digitalise and change the way they work.

Technology is no longer the issue. The challenge is now with business processes and the willingness to think of more efficient and effective ways of communicating and transacting business. The rewards of aligning our data are potentially huge, we just need more insurers, brokers and customers to get onboard.

Contributed by Jonathan Newbery, head of digital experience, commercial insurance, Zurich Insurance Company and Lars Henneberg, vice-president and head of global risk management, A.P. Moller – Maersk