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Insurers, tech firms eye each other as sector prepares for upheaval


LAS VEGAS – The fusion of insurance and technology is at a tipping point that will lead to radical changes in the way insurance coverage is created, distributed and consumed, according to many speakers at the InsureTech Connect conference in Las Vegas last week.

Already, significant shifts have taken place – particularly in the personal lines sector – but advancements in data analytics, artificial intelligence and computing power will transform the whole industry over the next several years, they said.

Many of the speakers among the 6,000 people attending the conference agreed that the insurance market will look very different in 10 years, but there were some significant differences over the details. For example, one leading insurtech executive’s assertion that “bots will replace brokers” was quickly dismissed by a major brokerage incumbent who said human expertise will not be replaced anytime soon.

Despite differences on the details, most speakers agreed that insurers and technology firms can’t go it alone and need each other’s expertise to thrive in the new marketplace.

“The insurance industry can benefit greatly from the knowledge and experience and skill set the technology sector has, and the insurtech space can also benefit from the knowledge and experience of insurance,” said Pina Albo, CEO of Hamilton Insurance Group Ltd. in Bermuda.

Insurers need to recognize that generational differences are affecting the way all types of consumers buy insurance, said Mark Watson III, CEO of Argo Group International Holdings Ltd. in New York.

“The next generation is much more comfortable buying things digitally,” said Mr. Watson. “If we don’t have the digital solution, we’re probably going to be left behind.”

Collaboration between established insurance sector companies and insurtech firms will be key, said Tony Kuczinski, president and CEO of Munich Reinsurance America Inc. in Princeton, New Jersey.

“I believe that by joining forces, we have a better chance a leveraging new ways of thinking, new technology and data, and other areas,” he said.

Experts in various fields of insurance need to be involved in assessing potential insurtech partners, said Greg Hendrick, New York-based CEO of Axa XL, a division of Axa SA.

“When you have a team of colleagues that are very innovative and very hungry to do that, you don’t have to filter; they’ll filter for you,” he said.

Already insurtech companies have disrupted the sector but many more changes are coming, said Daniel Schreiber, CEO of Lemonade Insurance Co., a digital insurer that provides renters insurance, which has been at the forefront of the insurtech sector.

Start-up insurers using digital technology and artificial intelligence are gathering vast amounts of data that will revolutionize the way risks are assessed and priced, he said, provocatively adding “the next insurance leaders will use bots, not brokers, and AI, not actuaries,” he said.

Daniel Glaser, president and CEO of Marsh & McLennan Cos. Inc. quickly dismissed that notion as “nonsense”, saying he was on the other side of that bet.

Blockchain, or digital ledger technology, will play a significant role in the transformation of insurance, several speakers said.

“Blockchain is one of three main areas of focus for us,” along with artificial intelligence and the “internet of things,” said Sastry Durvasula, chief digital officer for Marsh LLC in Phoenix. “We see blockchain as a major force in disrupting the insurance and risk management industry.”

Initial deployments of the technology are underway.

“We’re actually changing our operations to be blockchain-driven,” said Truman Esmond, vice president of solutions and partnerships with the American Association of Insurance Services in Denver.

To view all of Business Insurance’s coverage of InsureTech Connect, click here.

 

 

 

 

 

 



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