Technologies

Insurtech Global Outlook 2021: Commercial & Specialty Lines

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NTT DATA
NTT DATA Insurance
~ 5 minutes

In regards to the Commercial and Specialty Lines there are challenges and opportunities to discover. At the second Round Table, it was analysed the latest trends in the Commercial and Specialty Lines, particularly focusing on how investment has been affected.

Data

Round Table Speakers: Deborah Bale - Director at NTT DATA EMEAL Insurance, Paolo Cuomo - Director of Operations at Brit Insurance, Silvi Wompa - Group Head of Portfolio Underwriting at Swiss Re, Matt McGrillis - CTO and co-founder at Send

Covid-19 Impact On Technological Innovation

"As we return to a more traditional way of working in over the next few months, we will see that those technology innovators will accelerate out but the technology laggards will necessarily pick up space."

Paolo Cuomo - Director of Operations at Brit Insurance

According to Silvi Wompa during the pandemic, the principal change was human behavior. The whole of the developed world went online overnight pushing for development in months that would otherwise have taken years or even decades to achieve. In addition to that, looking at the pressure to reduce costs, Silvi thinks that the pandemic has hit the P&L of most companies not only in insurance and cost efficiency although it's already been on the agenda for many years.

Paolo Cuomo offers the opposite view. The chaos of Covid has forced people to behave differently but, while staff at every level of every organization have realized the opportunities and importance of technology, Paolo emphasizes those companies who were prioritizing technology beforehand. They're doing the right thing and they will push it even harder. He explains that there will be some things that don't change but fundamentally as we return to a more traditional way of working in over the next few months, we will see that those technology innovators will accelerate out but the technology laggards, will necessarily pick up space.

How Traditional Insurers Are Responding To Technological Innovation?

Matt McGrillis distinguishes several categories. The first and more important category is hesitant. From his perspective, they're really waiting to see what happens seeing the direction of the travel, seeing the success and the update of the initiatives. Then, you have on the flip side the more innovative insurers that are out there in the market that are kind of countering those risks and uncertainties by really considering flexible solutions, more than ever kind of SAS solutions, solutions that are kind of built, for built, for change, often Cloud-first solutions that are suddenly kind of gaining traction and previously a lot of old technology that is still around the market.

Commercial Insurance: A Traditional Face-To-Face Approach

According to Paolo Cuomo, there's two ways of looking at commercial insurance. One is the more data you have in a more real-time manner. On the other hand, complex commercial insurance policies are still written for a 12-month period and are a result of many weeks of discussion before they're written or before the renewal so you could say it's absolutely the way we've all got to go or you could say well, it's completely irrelevant and that's why face to face will continue for a while. He explains the theory of the trapezium. A trapezium is drawn and in the back of the trapezium of those essentially commoditized products where a specialty insurer is going to be less interested because it's just about using that data doing it quickly and it's all about cost, all about speed and that's where you need a certain type of data. And then on the forward leaning edge of the trapezium is that sort of mouse that's searching for the new previously uninsured products either people had never thought to insure them they're completely new risks or maybe the data wasn't previously available. Now trying to automate and rush any of that is going to lead to disaster. These are completely poorly understood risks and therefore the best you can do is take together the experts who've got 20 or 30 years of experience to use an inadequate amount of data to make a decision and then what happens of course is over the next 2, 5, 10, 20 years is that they move along the trapezium until they become commoditized in turn and that's where speed and volume of data works. Thinking about it like that, it is observable the dichotomy of do we want lots of fast real-time data or do we want slow thoughtful face-to-face actually both of them play a role and both models will continue to exist.

Insurers Being Their Worst Enemies

"They are striving for let's set up an innovation department or let us do something completely new when in fact what they might start with is just saying, how can we use some of the changing world of tech and data to do what we do currently a little bit better."

Paolo Cuomo - Director of Operations at Brit Insurance

Paolo Cuomo claims that some legacy players are their own worst enemies. They are striving for let's set up an innovation department or let's do something completely new when in fact what they might start with is just saying, how can we use some of the changing world of tech and data to do what we do currently a little bit better.

Silvi Wompa refers to the talent. The insurance industry hasn't been the best at attracting data engineers and data scientists rather focusing on more sort of traditional profiles and that is really a scarce resource that we have to scratch our heads on and figure out how do we do that because without the talent the journey will be a lot tougher and will take a lot longer. So, according to Wompa, the key is to reconsider the attraction of talent.

Technology Companies, Insurers And Brokers Talking The Same Language

"It's so important that the technology companies need to speak to insurers and brokers in their own language."

Matt McGrillis - CTO and Co-Founder at Send

From the perspective of Matt McGrillis, the pandemic has changed everything. In a real change management revolution, the challenges from everyone all of a sudden working from home, challenges around the management of working, challenges around tracking that work and collaborating; technology helps fill some of those gaps and it really kind of kick-started some of those changes and obviously the data gained by some of these solutions to help track some of those work also helped the standard governance that they've got to put in in order to maintain the regulatory requirements of doing sanctions, checks and checking out the customers. In terms of Insurtech, he thinks it's so important that the technology companies need to speak to insurers and brokers in their own language. McGrillis recommends to those startups that are just starting to build up that knowledge or take on people who have that knowledge to be able to frame your proposition in the right way.