Sleeping giants awaken: how insurtech is picking up the pace
“The biggest single complaint I hear from insurtech and insurers alike is how slow the insurance sector is.”
This insight, from Insurtech Australia CEO Simone Dossetor, was shared last week with a 320-strong crowd at InsurtechLIVE in Sydney.
Long buying and partnership times mean it is not unusual for deals to take two to four years, and Ms Dossetor urged the industry to “be open to the external perspectives, not just internally focused on our own fantastic solution or bogged down in our inbox and all the inertia of our internal meetings”.
“We need to better understand and share our problems,” she said in an opening address. “We exist as Insurtech Australia to bring the future of global insurance right here.
“We really want to be able to work out, how can we work better between insurtech and insurers, how can we improve that customer experience and outcomes, and how can we really take advantage of the acceleration of technology that AI is bringing?”
Expert speakers at the full-day event gave examples of progress on these fronts.
Electric dreams
Zurich’s product owner commercial markets Katrin Stoecker said a recent agreement to be the preferred electric vehicle insurance provider for Tesla customers in Australia is evidence the global insurer has transitioned “from sleeping giant to agile”.
She said more than 20 “internal stakeholders” were involved in the project, including the leadership team, underwriters, and finance and actuarial experts, plus business analysts, customer experts, developers and the test team.
“There are a lot of stakeholders that need to be aligned,” she said. “It’s a big piece of navigation.”
The solution took about five months to put in place.
“To me, that’s super impressive. I’m so proud to be part of an organisation that can pivot from this sleeping giant to be an agile, nimble kind of insurance company.”
A tech tipping point
EY partner of financial services technology consulting Andy Parton, who ran a panel at the event, says technical change in insurance is accelerating. The cost of managing new demands from customers and regulators with “old, clunky systems” has helped.
“We just can’t meet those needs any further with the environment we have, and so we kind of came to a tipping point. I’ve been in this sector for many, many years and the rate of change and adoption of technology is the highest I’ve ever seen it across the market, particularly in Australia,” Mr Parton told insuranceNEWS.com.au.
All large players and many mid-tier insurance businesses are on major technology transformation journeys, moving off legacy mainframe systems to modern core platforms, he says.
“Gone are the days where you can get all new capabilities from just the core system – it’s the rise of ecosystems, the ability to integrate different bits of technology. And then take advantage of the innovation that’s happening in the insurtech sector with an architecture that allows you to plug in new things as they arise, and be much more nimble.”
The ‘dating app’ for start-ups and corporates
QBE chief data and analytics officer Sonya Crosby said the insurer is about halfway through “quite a big” modernisation program, and after using AI and language models for years is examining how to “use other and new information”.
“It’s not a start and a stop – it’s never going to end, it just becomes our new normal. We’ve invested in being able to have the tools to bring better data faster, to support decisioning and to drive it,” she said.
“I think what we’ll find is that we need to augment that a lot more. We’re already in the GenAI space – we’ve been running good ML (machine learning) and AI for a number of years, but ... how can we use other new information to help us to get to decisions quicker, both in terms of quality of pricing, solving some of the harder problems like affordability?
“For example, could you price better if you knew from an image what the building material is ... and you can connect back to the supply chain to get the claim in quicker?”
QBE underwriters are “super users” of geospatial data, Ms Crosby says, allowing more granular, accurate and faster pricing. It also helps speed the claims process.
“So, there’s two big problems that were solved with one technology.”
Ms Crosby told the conference the insurer created a blueprint to help mitigate “a lot of career risk associated with backing something new” and sell the idea within QBE.
“We call it the dating app for start-ups and corporates,” she said. “It’s really about understanding that we have the same problems in different ways.
“There’s a lot in common here ... We can be frustrated with each other or we can actually understand each other and just get much, much better at what we're doing.”