Category: InsurTech

Digital Disruption In Insurance: The Rise Of InsurTech

May 21, 2018

In the last few years, #InsurTech has increasingly proved to be a disruptive influence in the insurance sector, an industry which can be considered as one of the most complex in the world. #InsurTech with the help of technology and innovation has managed to immensely improve the efficiency of the existing operations, offering digital first customer-led services and enhanced customer experience. I had a very deep discussion with Dennis Grönger, InsurTech Professional, Author and Speaker at NextTo InsurTech, on the rise of #InsurTech and Digital-Led Product Innovation in Insurance. The detailed version of the conversation is given below. Every week we publish insights with a Q&A with CIOs, CTOs CMOs, and CXOs. See the link to the previous LinkedIn Q&As by Indus Net Technologies at the bottom of this post. Q1. What are the key trends in product innovation in the Insurance industry? Dennis: I am an InsurTech expert and this sector is full of surprising new ideas and concepts. Every conference I visit is full of exciting start-ups. And it’s the same on the incumbent’s side. Product innovation is a key component of Digital Transformation in the insurance industry. Despite regional characteristics, two general trends can be observed worldwide. First, there has been a shift from one-size-fits-all products to fine-grained components that can be combined individually for the customer. Second, more and more insurance services and products are being developed that add special value and benefits for using customer data. Q2. What are the key enablers and drivers of innovation in the insurance industry? Why NOW? Dennis: Two big changes have been essential for today’s innovative insurance industry to develop: a technological change and a cultural change. I wouldn’t dare to tell you guys at Indus Net Technologies about technological change as you’re much better than me in this area! As for the cultural change, I’m not aware of any insurance company that hasn’t radically changed how it uses the creativity and great ideas of its employees. When I started my career in insurances business, the whole industry was full of patriarchs at the top of companies and employees were just considered numbers on payrolls. Since then, things have fortunately changed, and many successful innovations would be inconceivable without committed employees. Q3. What are some of the interesting digital-led product innovations in the Insurance industry? Dennis: The time of new digital insurance products has just begun, and I am convinced that we are going to see a lot of exciting new and innovative ideas. For example, there is a new class of insurance products that wouldn’t work without full digital capabilities and niche products with low premiums. The combination of ‘niche‘ and ‘low premiums’ was out of the question for incumbents until now; Digital Transformation has changed that. Cyber Insurance is another good example of a different digital-led product trend: products as a combination of services that extend beyond coverage. In case of a cyber-attack, the most important thing is to find the best specialist to stop the attack as quickly as possible. How would this be solved without a digital platform that connects your customers with specialized service providers? It would be impossible! Q4. Why is user experience leading the way in Insurance innovation? What problem are we solving here? Dennis: Relevance and simplification are key terms in the case of user experience in the insurance industry. Customers want more personalized services and products that are individually tailored to their personal needs. Product relevance is also a question of when and how the customer wants to handle this product, before and after buying it. Insurers need to find answers to these customer demands. However, without simplified products that your customers can easily understand, the only user experience that you are going to get is bad user experience. Q5. How much of IoT and Big Data Analytics is being used to create new products? Has the IoT generated data attained statistical significance to be used for underwriting? Dennis: Well, I am a strategy expert and not an underwriter but there is no doubt that IoT and Big Data Analytics are going to disrupt the ways that underwriters analyze and model risks. Connected cars have already reinvented car insurance and, with Smart Home technologies in a bundle with home insurances, for example, insurers have the chance to offer real protection in addition to coverage. Q6. How can blockchain be used for disruption in the Insurance industry? Dennis: That’s the billion-dollar question right now, isn’t it? I think it’s still too early to make any reliable predictions about blockchain. However, for me, the biggest opportunities for insurance companies are in reducing costs, reducing errors, and reducing time by using blockchain-based technologies. Q7. Do you see a future for people-to-people (p2p) Insurance? How far (or near) is this from reality? Dennis: Great examples of P2P insurance, like Lemonade, have proven how far you can get with complete customer focus. But is a P2P business model profitable or even scalable? I don’t think so. The numbers from Lemonade that I’ve seen so far are reporting huge losses and Germany’s P2P pioneer Friendsurance was, due to its numbers, forced to switch their business model and have become more of an online broker with a few P2P-benefits for their customers. Q8. What are the constraints around innovation in the Insurance industry? Dennis: I want to answer this by quoting a friend of mine, Dr. Robin Kierra. “Insurers needs to do everything at once: do their homework, go out and play, and prepare for the exams in 10 years.” Would you like to try that with the 25+ year old legacy systems that most insurers are still using? Better not, but it is a fact that Digital Transformation and innovation are still at their beginnings in the insurance industry. Q9. How can Insurance and InsurTech collaborate to breed innovation at scale? Dennis: As long as insurers have the customers and InsurTechs have the technology, there is no other option than to cooperate with each other.

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#InsurTech

What #InsurTech Leaders & Influencers Are Talking About

April 27, 2018

The emerging #InsurTech industry is growing at a rapid pace. InsurTech refers to the application of new innovations and technology that are dramatically disrupting the insurance industry, from apps to robotics to blockchain and lots in between. With the application of new innovations and technology, InsurTech is dramatically disrupting the Insurance industry. The industry leaders and innovators across the global insurance ecosystem share their insights, tips, and techniques to thrive in this digitally driven world. Having been ranked 2nd in the @Insurance_Post & @TalltVentures too 100 #Insurtech firms; I chatted to Varun Dua the CEO of @AckoGI on everything from @amazon to being a #startup in #India https://t.co/owBTZ7I2o0 — Jonathan Swift (@InsuranceSwifty) April 18, 2018 Humanity is being digitized and #insurance will never be the same again! https://t.co/7rwM0gA1fe pic.twitter.com/kgaTRG7FEd — Daniel Schreiber (@daschreiber) April 3, 2018 Here is why insurers need to build ecosystems of tech/startups around them to build the next insurance services. #InsurTech #FinTech #AI https://t.co/sxN62aUqWb — Florian Graillot (@FGraillot) April 26, 2018 InsurTech: hype or hyperdrive? David Rush (@DeloitteUK_FS) hosted Sabine VanderLinden @SabineVdL Phoebe Hugh @HeyBrolly, Sam Evans @Sam_C_Evans and Christopher McDaniel of the RiskBlock Alliance at #IFGS2018 to discuss where InsurTech is heading https://t.co/z7kCKaXFWb — Innovate Finance (@InnFin) April 27, 2018 The Future of Insurance is Digital; Resistance is Futile!  Our Impact-Oriented Asia InsurTech Summit is exactly one week away. Really excited how it all came together with all the tremendous help from Asia Insurance Review, InsurTech Asia Association, an…https://t.co/XTZs5MgVnN — George Kesselman (@mr_insurtech) April 16, 2018 #MachineLearning -The Future of #Ecommerce & #DataScientist will work as a Batman for #FinTech & #InsureTech#AI4FinTech #AILabPage #Infosec #AI #DataIntelligence #VinodsBlog #ML #InfoSecurity #DataScience #BigData #Industry40 #Analytics #tech #Business https://t.co/4cICaiCs7y — Vinod Sharma (@vinod1975) April 21, 2018 New business models help Everyday Insurers bolster revenue: https://t.co/0jVaBrZeLf #fintech #insurtech #ecosystem@insurtechtalk @k_feldborg @nigelwalsh @SabineVdL @dennisgroenger @insurtechforum @NickMart_Insure @TunstallAsc @st_weiss @MCins_ — florian semle (@floriansemle) April 20, 2018 #Blockchain becoming more than just a science experiment in insurance? #insurtech https://t.co/S3ipJFt3st — Sam Evans (@Sam_C_Evans) April 26, 2018 Is insurtech maturing? It's hard to tell https://t.co/bdkg4C6cVy my latest blog — Mark Breading (@markbreading) April 10, 2018 https://twitter.com/sbmeunier/status/989496363544186886 “Future of #Insurance” published by @raconteur today in @thetimes. Wide range of topics including #insurtech, #cyber. Delighted to have made small contribution. https://t.co/JDlyUBNDPz — Nick Martin (@NickMart_Insure) April 26, 2018 It is amazing how #InsurTech industry is evolving. Make sure to check this space often, as we are coming up with more such updates on Technology & Digital.

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#TwitterChat: Digital-Led Product Innovation In Insurance

April 19, 2018

We organized yet Twitter Chat Session on Digital-Led Product Innovation In Insurance. As the discussion progressed we got some immensely relevant insights, trends, and learnings around #InsureTech & #DigitalSuccess Our esteemed panelists were Edmund Dilger and David Stubbs. In a highly competitive industry which is not known for digital innovations, changes in technology, product innovation, and newer business models are creating significant new opportunities for Insurance companies. Let’s us quickly go through this interesting discussion. @industech for me its personalisation — RightIndem (@RightIndem) April 19, 2018 Of course personalisation is a big step forward in terms of innovation in most industries including #insurance. However the current privacy concerns might slow it down a bit in near term. #digitalsuccess — Abhishek Rungta (@abhishekrungta) April 19, 2018 OK, bespoke in that specific risks for that person are covered, pooling for the risks. My worry about bespoke products is that we move away from pooling, which ends up with someone who has a claim being unable to afford insurance next year – the situation before Flood Re — Edmund Dilger (@EdmundDilger) April 19, 2018 The energy coming from the start up sector is incredible, and the growing sense that the industry will change is becoming self-fulfilling — RightIndem (@RightIndem) April 19, 2018 Really agree that there has been a big change in the last 2 years. Also some technical factors – becoming easier to use AI to analyse big datasets, so less "experience" based and more data based decision making — Edmund Dilger (@EdmundDilger) April 19, 2018 A3: Analytics, AI and ML enables predictive alerts and maintenance – which overall reduces the risk for the insured. Thus delivering continuous value through the lifetime of the cover, instead of just paying a claim when things go wrong. #DigitalSuccess — Abhishek Rungta (@abhishekrungta) April 19, 2018 When we talk to smart home device manufacturers one of the most interesting parts is the list of devices connected to wifi, and when they have last been used – proof that the claimant had the item. And also the opportunity to know that devices are working, and set as required — Edmund Dilger (@EdmundDilger) April 19, 2018 As they say People buy stories and not products, user experience is exactly doing this. It is helping insurers create an experience which entices a user to buy and a have a hassle free experience. #Insurtech founders are major drivers of this thought #DigitalSuccess — Syed Zainul Haque (Zain) (@syedzainulhaq) April 19, 2018 For far too long bad user experience has been accepted because legacy systems prevented anything better. Much like the banks. But we have passed the tipping point now, it has to improve to keep up with the customer's experience of other retail products — Edmund Dilger (@EdmundDilger) April 19, 2018 I would agree with your statement, but potentially disagree as to cause. Those systems would never have been signed off if the customer had figured in their thinking! — RightIndem (@RightIndem) April 19, 2018 A good amount of work has been done & within a couple of years we will see it’s global impact. #IoT will redefine the industry experience & if typical insurers lag behind then the todays customers i.e millennials wil do what they did to late digital laggers of #Fortune500 of 2005 — Syed Zainul Haque (Zain) (@syedzainulhaq) April 19, 2018 My favourite big data play at the moment is Concirrus in shipping. They can support underwriting and allow us to support or reject many claims – fabulous customer experience and a streamlined process for the insurer — RightIndem (@RightIndem) April 19, 2018 #blockchain is making its impact felt in every industry. I think with #P2P insurance coming up with companies like @Lemonade_Inc we are optimistic that it will bring a paradigm shift — Syed Zainul Haque (Zain) (@syedzainulhaq) April 19, 2018 Not impressed by P2P in underwriting, but not my areaAs a behaviorist though I find affinity claims groups an interesting tool against claims fraud — RightIndem (@RightIndem) April 19, 2018 That would make a very interesting loop back into underwriting – certain groups rarely claiming, but perhaps if members of a group were to discover that many claims have been made then they feel incentivised to claim as well? — Edmund Dilger (@EdmundDilger) April 19, 2018 Capital requirements and regulation are not going to go away. And in the consumer space we do have to remember that the product is not going to become exciting #digitalsuccess — Edmund Dilger (@EdmundDilger) April 19, 2018 Q9: How can #Insurance and #InsurTech collaborate to breed innovation at scale? A9: #Insurance companies can provide the solid regulatory framework and financial discipline, whereas #InsurTech can bring innovation, new products and experiences. And they collaborate through #API#PSD2 is a great step in this direction in banking industry#DigitalSuccess https://t.co/iOo2zGw1uV — Abhishek Rungta (@abhishekrungta) April 19, 2018 Insurance companies should not only test disruptive ideas, they also need to deliver business value at a lightning-fast pace by putting more focus on adjacent product innovations. Indeed a great session.We profusely thank all the participants for sharing their thoughts. We look forward to having such more power-packed session in the future on #DigitalSuccess

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How Big Data Improves Claims Process

April 19, 2018

For a long time, the insurance industry has struggled with the claims process. Manual verification of claims, processing of claims amount, and segmenting policyholders before claims are made to avert undesirable outcomes have all been cumbersome for insurance companies. Thankfully, data analytics have come to the rescue of insurance companies like the proverbial knight in the shining armor. With all that data available today, it has only become easier for insurers to carefully segment policyholders and provide better products customized for individual needs. This has helped not only to cross-sell and up-sell insurance products but also to enhance customer satisfaction. In addition, Big Data has helped insurance companies to process claims quickly and efficiently. While Big Data is inherently vast and contains extremely useful information, it is also its nature to be superfluous and chaotic. Too much information and data can actually cause difficulties for insurance companies which often seek specific information and data about customers and insurance trends. This is where data analytics comes riding on horses. In this article, let us take a look at how Big Data improves claims process and saves the day for insurers. Why do we need Big Data Analytics in claims process? Because claims is a complicated business. As an insurer can vouch for it, claims processing is no easy business. Most insurance professionals consider the processing of claims the most arduous and difficult part of their professional duties. Yet, it is also the most important and crucial aspect of policy handling and processing. Processing of claims consists of four important steps: Intimation or communication: The policyholder communicates his claims to the insurer Registration: The insurer makes note of this communication, and begins the process of approving or disapproving the claim Handling: In this step, the insurer has to verify and assess the nature of the claim, and its validity Settlement: If the claim is found valid, the settlement is made, and payments are processed While it may seem simple on the outside, it is a gnarly and prickly business for those who are actually involved in the claims process. This is because care needs to be taken that customers do not feel offended at any point and that each sub-step is smooth and transparent. We must also remember that each of these four steps have multiple ramifications for the insurer, intermediaries if any, and the claimant. The claims process and the four sub-steps involve a number of decision points all of which are based on verification of data and analyzing what is already known and predicting certain outcomes. These outcomes involve operations, management of risk, settling the final amount, and ensuring that customers remain loyal to the insurance brand. Claims analytics makes sure that all these steps in claims process are easily handled, and processed quickly and efficiently, without any errors. Claims Analytics to the rescue Claims Analytics is a unique technology that uses Big Data Analytics, Predictive Analytics and programming to make sense of structured and unstructured datasets during all the four steps of claims processing. Predictive analytics helps in recognizing trends and predicting outcomes, while prescriptive analytics helps insurers to take decisions quickly. Claims Analytics as a tool can be customized for each insurer so that their tool is perfectly tailor-made for their unique product and market requirements. Claims Analytics helps pick and choose relevant datasets from a seemingly chaotic Big Data, to arrive at solutions automatically. Claims Analytics helps insurers to : Detect fraud: Insurers no longer have to worry about unpleasant conversations, and wasted man-hours in trying to assess the veracity and authenticity of claims made. Claims Analytics can be programmed to automate the process, the verifications and detecting fraudulent claims. Track renewals: Insurers can quickly renew automatically and track when policies are not being renewed so that reminders can be sent. This step also involved predicting future risks and assessing if a policy is worthy enough of being renewed. Predict outcomes: This has a variety of implications. Predictive analytics helps insurers to predict if a customer is going to be high-risk or a desirable customer. It also helps to predict market trends and claim outcomes. Gain business and market insights: Market and sales forecasting are very important for insurers to gain a competitive edge. Big Data analytics helps insurers to look at the macrocosm of the insurance market and gain business insights, so that they serve their customers better, and also grow profitable. In which areas can analytics enhance insurance claims data? Claims Analytics can help insurance industry in a number of ways when it comes to enhancing insurance claims data. Let us take a look at some of the areas that are currently being supported by Claims Analytics. Fraud: Predictive analysis uses advanced statistics and programming to make use of Big Data and derive analytics. Fraudulent claims can be identified quickly at every step thanks to algorithms, data mining, and other methods. Subrogation: Insurers can initiate subrogation processes to claim losses caused by a third party to the claimant if the situation allows for it. Claims Analytics helps wade through medical and police records, adjuster notes, social conversations, etc. to identify subrogation opportunities. Sooner these opportunities are identified, the lesser the insurer’s losses will be. Predictive analytics helps identify such opportunities quickly. Settlement: Claims Analytics helps in analyzing claim histories effectively and shorten the cycle of processing. This enhances customer satisfaction and reduces insurers’ labor costs. It also has ramifications in claim settlements made. Loss reserve: Claims Analytics can also be used to predict the magnitude of a claim that is made. Similar claims made elsewhere can be compared with current claims, and losses and expenditure can be estimated. Activity: Claims Analytics comes empowered with powerful data mining techniques which help in assigning importance to claims so that each claim can be assigned to an adjuster appropriate for the situation. This helps avoid assigning seemingly complex claims to the most experienced adjusters, only to find out the claim could actually have been processed automatically. Litigation: Litigation

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Winds of Change in the Insurance Sector : Blockchain in InsurTech

April 4, 2018

When Kelly Thomas started to work as an independent insurance broker in 2003, she only had a brick-like cellphone and a clunky laptop on which she made her presentations to company directors, hoping they would buy policies for their employees. Fast forward to 2018, Kelly has a successful insurance consultancy in New York and is often asked when she is going to adopt blockchain technology. She feels overwhelmed but is constantly looking for ways to implement blockchain. Overview of Blockchain For the uninitiated, blockchain as-we-know-it-today began its journey in 2009, when crypto-currencies such as Bitcoin started to become popular. What was initially a vehicle for the digital currency, quickly metamorphosed into the next big thing after the Internet. In a Blockchain, transactions are stored in discrete data blocks. These blocks are stored on decentralized registers, also known as “ledgers”. Every transaction is immutable, which means, once a transaction is registered as “having taken place”, no one can edit it. This is the very premise of Blockchain and the reason why it is so secure. Human intervention cannot alter previous transactions, and every human intervention is recorded, and for it to take place, there needs to be the consensus of the sort. This consensus can be mutually agreed upon so that future transactions take place automatically, over a super-secure and decentralized network. In short, Blockchain makes sure that every event or transaction is recorded permanently, and the transaction goes through only when certain pre-agreed conditions are met, and there is absolutely no room for hacking, tampering, altering of facts, or unsupervised editing. Such a technology finds itself invaluable in various industry sectors such as insurance, banking, and finance, identity management, healthcare, etc. Evolution of Blockchain in the insurance industry The insurance industry is one of the most conservative environments in the world, alongside banking and finance. Insurance entities need to be conservative because claims handling are based on trust, and both insurers and policy-holders depend on mutual trust for creating an environment of security against various threats (against which policies are bought, and risks are underwritten). Insurance industry’s reluctance to adopt newer and innovative technologies is often viewed as its tendency to be recalcitrant towards innovation. However, this is not true. The insurance industry has traditionally adopted the “wait and watch” approach when it comes to making big changes, and this tendency has helped it to survive for centuries. The situation today is no different than when insurance agents were skeptical about using online methods and mobile applications to process policies and claims. The insurance industry consists of $1.2 trillion of global economy, and 74% of this space is dominated by online policy purchases. Technology adoption has so far been from the side of consumers, who have adopted IoT technology in cars, and incorporated “smart home” technology to lower their premiums and insurance costs. However, insurers and underwriters too have slowly adopted technologies such as data analytics, predictive analysis, and artificial intelligence to determine risk and assign premium costs accurately. These technologies are part of what is now termed as “InsurTech”, a space that consists of various technologies to help move the insurance industry forward. Blockchain is increasingly part of InsurTech because it adds a layer of trust and safety that other technologies simply cannot. Indeed, the most successful insurance companies have already begun to implement blockchain to validate transactions and to authenticate claims processing. Insurance giants which have remained reluctant to adopt blockchain stand the risk of becoming irrelevant or losing out to competitors. Let us take a look at how blockchain helps insurers. Insurance policy criteria are programmed into smart contracts Smart contracts determine if insurance claims are authentic and if they meet the criteria set by authoritative sources Once authenticated, Smart Contracts use Blockchain to process payments automatically. Blockchain eliminates biases and prejudices on the part of the insurer while processing payments, while it also eliminates false claims made by consumers. How Blockchain can be used in insurance Let us take a look at how Blockchain can be used by insurers, and why it is so important to begin now. Identity management The identity of the policyholder is one of the most crucial factors while processing claims. Blockchain is the safest and quickest way to authenticate an individual or a group of individuals’ identity. Using blockchain-based identity management helps insurers to eliminate identity thefts, impersonations, and errors in claims processing. Fraud detection Insurance frauds are etched in popular memory, with Hollywood noirs often using them as the basis of their plots. Billy Wilder’s 1944 film noir Double Indemnity comes to our mind. Whether it is a well-planned insurance heist or an unethical insurer trying to outwit a genuine claim, it is straight down the line for both the insurer and the policy-holder. Blockchain eliminates all kinds of frauds and helps reduce costs associated with fraudulent insurance claims. Peer-to-peer insurance P2P insurance consists of a group of individuals with similar interests, who pool their premiums to insure against a certain risk. Blockchain helps to authenticate claims processing in P2P insurance, and eliminates false claims altogether, and automates the process of claims processing. P2P insurance is also known as social insurance, and Blockchain can help increase trust in such P2P models. Minimize errors Claims processing is often riddled with errors, both intentional and unintentional. Blockchain helps to mitigate this by automatically cross-verifying with various data sources before authorizing transactions or events. This reduces the probability of errors and minimizes unwarranted payouts. Risk reduction Blockchain technology helps bring like-minded people together and work on a consensus basis to authorize transactions automatically. This means multiple insurers can come together and agree to share risks by taking a portion of the responsibility when huge losses occur. Participants in such a model can consent to use Blockchain as their reference data as it is immutable and transparent. Smart contracts One of the reasons why Blockchain is so popular is because of Smart Contracts. Smart Contracts work on the principle of Blockchain, and approve

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