For the last three years, ACORD has sought to accelerate digital transformation in insurance through its innovation challenge, a competition that highlights tech-driven solutions from some of the best and brightest in the business.
Boston played host to this year’s challenge, where competitors vied for a chance to win best in Industry Innovator — which was awarded to IVANS’ Markets app and Synechron’s risk scoring artificial intelligence (AI) underwriting technology — and best in Startup, which went to the Insurance Agency app.
While attending this event, a few things stood out:
- Insurance has embraced tech, but it remains slow to adopt it. This year’s winners are a further testament to the gap between mindset and deployment of technological applications. In each case, what stood out among the victors was their ability to compile data that’s widely available and generally desirable and use it in new ways. IVANS worked with carriers and third parties to build the largest database of carrier appetite and agency footprint to date. The data, conveniently stored and able to queried, facilitated an agency-carrier relationship, an evergreen goal in the industry. The Insurance Agent App accomplished the same goal by streamlining the flow of data between the two parties. And Synechron incorporated its pricing process with data from Yelp and google reviews to assess primary risk characteristics and the presence of ancillary liabilities on small commercial risks.
- Innovation and invention are two very different things. While the insurance industry has been slow to incorporate technologies, the marketplace has strongly embedded operational structures coupled with vast amounts of data and resource. So the question remains, how do we leverage technology to minimize inefficiencies in the supporting processes already in place?
- There’s too much focus on capacity deployment. For too long, the industry has been seeking growth through product development or distribution innovation. Only recently has the attention shifted toward improving underwriting and operational efficiencies.
- A greater balance of technology efforts across business processes would do the industry well. While individual InsurTech companies continue to become more specialized in the problems they address, the dispersion of the tech movement across all operations will foster greater cohesion in all segments of the industry. There’s already evidence of this on a global scale. As noted in Willis Re’s most recent InsurTech Briefing, for Q3 2017, Asian markets have become a recent hot spot for InsurTech. This growth has manifested partially due to a more lax regulatory environment. Consequently, it may give companies developing technologies in other countries a platform to deploy their innovations that would otherwise not get exposure. These interactions are the catalysts for effective globalization.
Several industry leaders estimate this initial boom in InsurTech will be the upslope toward a technological bubble. Bearing that in mind, encouraging collaboration via technology, both across business segments and geographies, is crucial in fostering an environment that will support stable industry growth following the inevitable pop.
While it’s clear the InsurTech horizon is still well in the distance, I’m reminded of the message ACORD panelists, one of whom was Willis Re’s Andrew Johnston, gave to attendees: Do not be afraid to fail, meeting resistance along the road to innovation is the best evidence of progress.
Dan Foster is a reinsurance analyst based in Willis Re’s Boston office and graduate of the REACH program. In addition to recently joining the Willis Re InsurTech team, he aids in the placement of property catastrophe and multiline per risk treaties for nationwide carriers.