{"id":96568,"date":"2022-12-13T16:59:47","date_gmt":"2022-12-13T16:59:47","guid":{"rendered":"https:\/\/www.commercialriskonline.com\/?p=96568"},"modified":"2022-12-14T08:01:58","modified_gmt":"2022-12-14T08:01:58","slug":"commercial-insurance-entering-the-digital-age","status":"publish","type":"post","link":"https:\/\/www.commercialriskonline.com\/commercial-insurance-entering-the-digital-age\/","title":{"rendered":"Commercial insurance entering the digital age"},"content":{"rendered":"

It\u2019s fair to say digitalisation for commercial insurance has been lagging behind the personal lines sector. Part of this is simply because the risks are bigger, more complex and often require tailor-made covers. But the commercial market is moving forward and big steps have been made by some of the leading players to address digitalisation. Tony Dowding reports.<\/em><\/p>\n

Digitalisation and the use of technology by the commercial insurance sector finally appear to be gaining some traction, which is good news for risk and insurance managers. No one wants to deal with a slow and inefficient service provider, and the insurance sector has realised the need for change and investment has been made. <\/p>\n

J\u00f6rg Bertogg, chief operating officer for commercial insurance, Zurich Insurance Group, admits that commercial insurance has been moving at a slower pace of digital adoption in comparison to other areas such as personal lines. He says there are many reasons for this, such as complexity, scale, nature of the business and so on, but he believes now is the time for this to change. \u201cTechnology has progressed to a point that we now have valid solutions to some of the most technical challenges, which we can leverage to make real improvements in the way we transact business,\u201d he says.<\/p>\n

Matthieu Caillat, AXA XL\u2019s chief operating officer, agrees that the large P&C insurance sector hasn\u2019t matured at the same pace as personal lines, as the risks covered are by definition larger and more complex, and their underwriting requires a higher degree of customisation.<\/p>\n

\u201cIn commercial insurance, clients also have different expectations from carriers. Insurers have to take into consideration specific coverage needs that can help clients better manage their risks, therefore off-the-shelf solutions \u2013 which can be commoditised and digitalised more easily \u2013 simply don\u2019t cut it,\u201d he says.<\/p>\n

But he points out that digitalisation in the large P&C insurance sector has started, \u201cwith some markets and players clearly making it their strategic priority, and it will accelerate\u201d. He adds: \u201cThere is a huge, largely untapped opportunity to push digitalisation much further in the large P&C and specialty insurance space.\u201d
\n

\"Senior
Matthieu Caillat, AXA XL<\/figcaption><\/figure>\nAccess to insights<\/strong>
\nIan Haycock, group CDO and CITO, Swiss Re Corporate Solutions, says that in commercial insurance, data transfer between parties in the industry is still inefficient, and corporate risk managers don’t easily have tools that can translate their data into real risk insights. <\/p>\n

\u201cOne fact is certain: business in the future will increasingly be digital, whether the industry makes a giant leap or gets there in small increments. We will see this in multiple areas, such as data exchange, access to insights from expanded datasets or even support for contracts \u2013 technology will increasingly permeate the business model. Despite some overhype in recent years, it’s taking longer than advertised but it will happen,\u201d says Haycock. <\/p>\n

He says there is no doubt that broader and more diverse datasets lead to additional insights and value for all parties. \u201cTaking an example from the physical world of manufacturing, we already see how manufacturers can improve their products based on real data from sensors regarding the usage of the product and as such can create adaptive, optimised maintenance schedules. This creates a win-win-win scenario \u2013 the purchaser of the equipment can optimise downtime to suit plans, the manufacturer can provide a more tailored service, and the insurer can provide insights and cover for the most important risks,\u201d he says.<\/p>\n

Benefits<\/strong>
\nThere are many benefits for insureds, says Caillat, such as better service through efficiency, enhanced coverage and additional risk insights that allow improved risk management. Automation of low-value tasks frees up risk engineers, underwriters, claims handlers or policy managers \u201cto focus on the most complex and value-added missions: designing and delivering the best solutions for complex needs\u201d, he says.<\/p>\n

He explains that more and better data enables a deeper understanding of risks. Insurers can leverage better data to optimise the way they deploy capacity and provide the best possible solutions for their clients. And when leveraged appropriately, AI, machine learning and data insights can allow insurers to identify gaps in the market and bring new solutions to the market faster and more affordably than in the past, he adds.<\/p>\n

Bertogg says: \u201cThrough the efforts we are making around collaboration and communication of commercial insurance data, we have already seen significant efficiency gains that translate into real added value to the insurance value chain. Digital transformation also opens the door to new opportunities around the integration of additional service providers that further extend the value insurers, risk managers and brokers can extract from their relationships.\u201d
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\"Handshake.
Credit: Shutterstock\/CoreDESIGN<\/figcaption><\/figure>\nGreater visibility <\/strong>
\nBut how does digitalisation in the insurance sector allow insureds to get greater visibility of their risks and claims information in a way that is really useful for them?<\/p>\n

\u201cRisk managers want to get better at managing their risks,\u201d says Haycock. \u201cWe help them overcome the three main hurdles they face. First, their data is disorganised and dispersed across different systems. They want a data infrastructure that acts as a single source of truth for risk-relevant data. Moreover, they want to be able to put their own risk data in for presenting their risks correctly to the insurance market. Second, they don\u2019t have access to risk tools and models, for example, to assess and quantify risks. They appreciate being able to manage data on their own and immediately receive assessment results based on the experience of Swiss Re and other service providers, without having to rely on outside human intervention and the associated lead times. Finally, they find it difficult to collaborate because of the technical, cultural and legal challenges in sharing the risk data and insights within the organisation and with third parties. We help them store their data in their own private environment and yet securely share the risk insights.\u201d <\/p>\n

Bertogg believes transparency and speed of data access are key to getting a better understanding of risk and to becoming a driver of good decision-making. \u201cHaving access to consistent and real-time claims and risk data allows a greater level or analysis and insight generation, which opens up different ways of thinking about how our data can be used to drive improvements. Here, application programming interfaces are a very efficient way to connect carriers, brokers and insureds, enabling enhanced collaboration as well as safer and faster exchange of relevant data.\u201d<\/p>\n

Tripartite approach<\/strong>
\nThe talk of carriers, brokers and insureds is important, because it is clear that this is a tripartite issue. \u201cIn fact, this is a topic that affects the whole marketplace, including other third-party service provider,\u201d says Bertogg. \u201cThe real benefit of digital adoption is the access it provides to collaboration and communication of data, and the implications this has on how all parties in the value chain act. Individual organisations making change does drive the process forward, but only once all parties are moving in the same direction do you get to see real benefit.\u201d<\/p>\n

Ian Long, head international programmes proposition, Swiss Re Corporate Solutions, notes that insurers\u2019 systems are fed with the data provided by their brokers and clients. \u201cThe integration of quality data into insurers\u2019 systems will increase process efficiency, gain transparency and ensure contract certainty,\u201d he says. \u201cBrokers, insurers and insureds collaborate in a continuous process to issue policies and face similar problems with their systems.\u201d
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\"Ian
Ian Long, Swiss Re Corporate Solutions<\/figcaption><\/figure>\nThe key would seem to be ensuring compatibility between the insurer\u2019s, the broker\u2019s and the insured\u2019s systems. \u201cThe commercial insurance industry lacks a global data standard, so flexibility in the way we connect data is fundamental to the success of this transformation,\u201d says Bertogg. \u201cThere won\u2019t be a one-size-fits-all solution here, so connectivity will need to adapt and respond to the different requirements of the various markets and situations. Insurers\u2019, brokers\u2019 and insureds\u2019 systems will need to be able to translate and understand the data presented to them and remove ambiguity.\u201d<\/p>\n

RMIS growth<\/strong>
\nThere is significant growth in risk management information systems (RMIS), with more and more insureds looking for solutions to manage the large volumes of data that underpin commercial risk management. As Bertogg points out: \u201cUltimately, these systems need to be flexible enough to react to the ever-changing demands of corporations and to be able to quickly integrate services for new risks that are presented.\u201d<\/p>\n

Of course, what risk managers want is full transparency and control over their risks. \u201cThey want an easy-to-use way to manage the risk-relevant data, the ability to identify potential issues and act on them, and support for sharing information with brokers or insurers,\u201d says Haycock. He adds that current RMIS tend to collect large amounts of information that is just stored and is often not really needed. \u201cHowever, raw data on its own does not create value. Actionable insights must be derived from it to enable risk managers to take action. Additionally, this vast amount of data must be managed and kept up to date, which is a labour-intensive process,\u201d he says.<\/p>\n

Looking forward, risk managers will be looking for innovation and further benefits from technology. \u201cWhen we ask our clients what keeps them up at night, they almost always answer \u2018those that aren\u2019t insurable\u2019,\u201d says Caillat. <\/p>\n

New risks are constantly emerging and can be difficult to predict. \u201cWe believe that in the future, insurers will supplement their traditional offering with enhanced risk prevention solutions, services and advisory capabilities,\u201d Caillat says. \u201cThis will allow them to have a more holistic view of their risks and access to a full ecosystem of solutions that go far beyond pure risk transfer. Our ability to leverage data can help our insureds solve some of their most pressing risks, which sometimes can\u2019t be covered by the market.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s fair to say digitalisation for commercial insurance has been lagging behind the personal lines sector. Part of this is simply because the risks are bigger, more complex and often require tailor-made covers. But the commercial market is moving forward and big steps have been made by some of the …<\/p>\n","protected":false},"author":10,"featured_media":96521,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_uag_custom_page_level_css":"","footnotes":""},"categories":[489],"tags":[521],"acf":[],"uagb_featured_image_src":{"full":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400.jpg",700,400,false],"thumbnail":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400-150x150.jpg",150,150,true],"medium":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400-300x171.jpg",300,171,true],"medium_large":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400.jpg",700,400,false],"large":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400.jpg",700,400,false],"1536x1536":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400.jpg",700,400,false],"2048x2048":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400.jpg",700,400,false],"image-publication":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400-390x223.jpg",390,223,true],"image-publication-large":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400-476x272.jpg",476,272,true],"jannah-image-small":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400-220x150.jpg",220,150,true],"jannah-image-large":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400-390x220.jpg",390,220,true],"jannah-image-post":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400.jpg",700,400,false],"featured-2":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400-530x340.jpg",530,340,true],"editors-pick":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400-219x115.jpg",219,115,true],"archive-thumbnail":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400-375x375.jpg",375,375,true],"mobile-thumbnail":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400-375x300.jpg",375,300,true],"single-feature":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400-700x400.jpg",700,400,true],"square-thumbnail-s":["https:\/\/www.commercialriskonline.com\/wp-content\/uploads\/2022\/12\/Digitalisation_shutterstock_1932042689_700x400-100x100.jpg",100,100,true]},"uagb_author_info":{"display_name":"Tony Dowding","author_link":"https:\/\/www.commercialriskonline.com\/author\/tony-dowding-2\/"},"uagb_comment_info":0,"uagb_excerpt":"It\u2019s fair to say digitalisation for commercial insurance has been lagging behind the personal lines sector. Part of this is simply because the risks are bigger, more complex and often require tailor-made covers. 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