Almost 150 professionals heard from senior industry executives including the heads of Cover Genius, HDI Global, QBE Ventures and NTI at the Insurance News insurtech seminar in Sydney last week. 

They say that in the future, the hidden details of “unstructured” data – for example, email attachments or handwritten notes – will be unlocked, making underwriter offers faster. Insurance will be bespoke. And jobs in the industry will change, but are safe. 

Here’s more of the expert advice on what advanced technology means for insurance: 

It’s all about the customer 

Cover Genius CEO Angus McDonald told the audience how he took the insurtech from a start-up a decade ago to be today’s leader in embedded insurance, with more than 35 million customers. 

“We were fortunate to be coming up at a time when there ... was a real gap in the market. Ten people in a camper van store in Kings Cross was kind of where we started,” he said. 

“We started getting regulatory approvals around the world to deliver the solution and we also got distribution partners excited. We were fortunate with Booking.com – it was a problem that really resonated with them. 

“They wanted to be able to offer car rental insurance globally, and so they supported us early and the business developed from there.” 

Mr McDonald says general insurance presents “massive opportunities for technology”.  

“What we’re seeing from an AI point of view is that a lot of people are investing on the customer side of the experience – are you able to give a more automated claims experience and customer service journey? That’s an area that we’re really investing in.” 

He says big digital platforms such as Amazon and Google are “building massive trust” across the consumer base, and so can offer different protection products throughout their services.

“I think in time, that’s probably a challenge for some of the direct consumer models in the insurance space and I think it’s an opportunity for the existing players to think about, how do I engage with that step? How do I work with those digital platforms, perhaps, to find ways to bridge that trust gap? By associating with these big digital platforms that are known and often loved ... I think it’s a really big opportunity.” 

Life and health will be a new area for Cover Genius, he says, and the business has been growing 100% year on year for several years. It now has 40% of its customers in Europe, 45% in the US and the balance in Asia-Pacific.  

“The business is really global and spread out. About 80% of our technology product management team’s here in Sydney,” Mr McDonald said. “We’re excited about the next 10 years. We think we’re a category-defining business.” 

Cover Genius is “not cannibalising broker channels”, he says. 

“We’ve won business from traditional providers but we are driving attach rates ... so we’ll get more people to be insured by our merchant partners. By expanding the market, we’re actually creating the market, and for our insurance partners on the other side it’s kind of a captive market – there’s no other way to get these consumers other than by working with us. People who are buying at point of sale ... are not going through any of your other channels. So insurance partners love working with us because of that.”

Consistent investment pays off for NTI 

NTI CEO Tony Clark says technology has improved the transport insurer’s expenses “dramatically”. 

“If we hadn’t made that consistent investment of 1.5 to two points of our expense ratio every year into technology, we wouldn’t be in the position we are now where business is done electronically with the industry across the board. 

“The ability to use data science and machine learning ... and moving towards AI, the analytics within our portfolios now blow my mind.” 

Five years ago, a team of University of Queensland students set up a trial to estimate claims using a decade of back data, and were about 98% accurate on the claims output. 

“We rolled that through all of our portfolios and reduced the amount of referrals,” Mr Clark said. “This means the brokers’ expectations being met faster. We’re not asking so many questions. Why ask a broker so many questions? 

“That year, we wrote $20 million worth of business we normally would not have won because of the algorithms that these young kids put in place.”

Ignore at your peril 

QBE Ventures global head of emerging technology Alex Taylor encouraged insurance businesses to tackle new tech, not ignore it. 

“I understand it can feel too big and can be hard to start looking at it, but I would encourage you to ... start your journey, making sure that you understand the power of the technology on publicly available data. Do experiments ... and figure out what the limitations are of what these systems are capable of – and making sure you always look at the capabilities of the technology versus what you want to do is highly important.”

See more of what Mr Taylor said here, and more reporting on the seminar here.