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INSURTECHISSUES & ANSWERS:
Technologists, service providers, insurers, reinsurers and consultants explain the latest developments in insurance technology and how insurers are using technology to gain an advantage in today’s highly competitive market.
Interviewed Inside:
Michael FloodPhiladelphia
Insurance Companies
Kevin Gregson Willis Towers Watson
Jennifer LawNationwide
William DrakeNationwide
Brona MageeSCOR Global Life
Amit Tiwari Xceedance
Brad ButlerReinsurance Group
of America
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BEST’S REVIEW • NOVEMBER 2018
Michael FloodVice President for the Accident and Health Division Philadelphia Insurance Companies
“PHLY has the strongest marketing talent in the industry when it comes to property and casualty, and now accident and health as well.”
Michael Flood, vice president for the accident and health division at Philadelphia Insurance Companies said their focus is on participant accident insurance and student accident insurance. “The reason that we’re focused in those areas is because it supplements and complements the products that PHLY offers on the package side,” he said. The following are excerpts of an interview.
What are the challenges in underwriting accident and health?It’s a high volume business and we need to be very efficient with that business. We’re also asked to turn around quotes on this business very quickly. We need to be able to do that usually within the same day, or certainly within the next day in most instances. Lastly, we find that the agent population and the brokers that request these quotes don’t have a very strong knowledge in many cases with this type of product. We spend time educating the agent so that they can speak intelligently to their customers.
Is there a relationship between participant accident insurance and other lines?There’s a very strong relationship, and it’s really the foundation for what we’re trying to build here at Philadelphia Insurance Companies. We feel that the participant accident insurance product ties in directly with the general liability insurance that Philadelphia also underwrites. What that means is that when an organization is sponsoring an activity, if somebody gets hurt while they’re under their jurisdiction, we can help pay the medical bills for those injuries. It reduces the chance that that organization will be sued by the participant that was injured.
Is technology changing the face of participant accident and health?It is to some degree. It’s helping us to quote business very quickly compared to the past. Administratively, it’s helping us to issue policies, invoice and handle other administrative functions very effectively. We continue to work with our IT partners to make sure that we’re doing the best we can in those areas. Alternatively, we are constantly looking to try to find ways to allow agents to quote this type of business themselves. However, it’s pretty difficult because of the niche nature of the business, and the fact that it requires some expertise that the agents may not have.
Accident & Health Leader
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BEST’S REVIEW • NOVEMBER 2018
Kevin GregsonGlobal Leader, Commercial and Client Development Willis Towers Watson
“We see a lot of innovative technology that enables us to find new ways to create value for us and for our clients.”
■ Provides a powerful combination of advisory services.
■ Integrated with leading-edge technology solutions.
■ Unparalleled analytic capabilities.
A Leader in InsurTechKevin Gregson, global leader for commercial and client development at Willis Towers Watson, helps insurance clients innovate with new technology. Says Gregson, “In partnership with Plug and Play and emerging insurance technology players, we offer a tremendous line of sight for companies exploring InsurTech solutions.” The following Q&As are excerpts from a recent interview.
How should InsurTech be thought about?The way we think about InsurTech at Willis Towers Watson is in terms of the entire insurance value chain. We sit in a unique position that way, advising insurers across the globe on all aspects of value creation and risk management. High on insurance company agendas right now are technology solutions to: improve customer experiences, unlock the potential of advanced analytics and drive cost savings with automation. We can help insurers harness technology to either unlock or create value in any part of the value chain.
What do you see as the biggest disrupters as a result of technology in insurance?It’s a great question and one that we get a lot. If you would have asked me that question a few months ago, I think the answer may have been artificial intelligence (AI) because everyone has been talking about AI and automated machine learning. It’s a very important dimension. What we’re seeing now is that AI has become table stakes. Everyone is embedding AI into other platforms and other technologies. Where the most disruption is actually going to occur is in an emerging category — low-code and no-code platforms that take the very powerful technology in AI and automated business processes and make it accessible to non-developers and non-technicians. The ability to build great solutions that leverage AI and automation without having to be a coder will be a tremendous industry disrupter over time.
How does Willis Towers Watson leverage InsurTech to create synergy across businesses?We focus a great deal on the start-up-driven community and ways that we can enhance our own business platform using new technology to create value for clients. We also apply our existing insurance technology more broadly in noninsurance environments, including human capital and other areas where we’re looking at risk and value. Our insurance technology is very well suited for wider applications as well as integration with a company’s existing technology.
Go to the Issues & Answers section at bestreview.com to watch an interview with Kevin Gregson.
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Issues & AnswersSPECIAL ADVERTISING SECTION
Issues & Answers
BEST’S REVIEW • NOVEMBER 2018
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Jennifer LawAVP Head of Specialty Operations
William DrakeDirector of Research and Analytics
■ Fortune 100 company.
■ A.M. Best rated A+ (Superior) FSC XV.
■3rd largest domestic specialty (Excess and Surplus) commercial lines insurer.
Analytics Reimagined
What is one of the key coefficients in your modeling?There is immense value in excess claims data. Rigorous analytical studies of loss history allow us to spot developing trends faster and consequently make decisions sooner. Evolving complicated legal environments pose challenges to typically long-tailed lines. Sophisticated implementation of text-mining models allow us to develop insights from our rapidly-growing unstructured data sets.
What do you hope to achieve using data and analytics?Predictive models based on deep learning algorithms allow us greater insight into customer-quoting patterns and different markets’ seasonality patterns. Coupled with models that monitor quote-binding ratios, we are able to spot evolving market forces and market reactions to events in real time.
Jennifer Law, associate vice president and head of Management Liability and Specialty Operations for Nationwide, said “evolving machine-learning based algorithms allow us to make connections in historical data, and then consequently feed those features into our predictive models.”
William Drake, director of research and analytics at E&S/Specialty, Nationwide, added that this is important in the company’s transportation book, where telematics and emerging descriptive statistics about drivers and vehicles is becoming more prevalent. “Understanding what drives crash frequency for a small versus large fleet is critical to being able to remain profitable,” he said. The following are excerpts of an interview.
Why use data and analytics in underwriting?One of the most difficult challenges for underwriters is the organizing and processing of available underwriting information. Analytics can assist underwriters by consolidating vast quantities of relevant quantitative and qualitative financial data and analyses in an end-to-end, underwriter desktop platform. At Nationwide, several technologies are utilized to aggregate and summarize the available information and analyses for underwriters to help support informed underwriting decisions. It is not intended to replace underwriting logic or experience, but instead it is intended to supplement the underwriting process with better information. Further analysis can then be completed by the underwriter, given the detailed reports that are driving the predictive analytics. Deep-dive investigations are routinely conducted and new relationships from historical data are formulated.
How do underwriting experience and analytics coexist?Decision-makers partner with data scientists to blend qualitative and quantitative relationships in the data. Some excess books are thin on data, and a blend of statistical evidence combined with underwriting knowledge allows us to form more intuitive prescriptive statistics. This has greatly enhanced our ability to gut-check and scenario-test the predictive models. The collaboration between analysts and underwriters results in a more intuitive model and leads to increased adoption. Increased model adoption allows a faster cycle time for model updates, and quicker “is-this-working?” pass/fail results.
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Empowering people to live longer
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www.scor.com
SCOR Global Life is committed to helping people live long and healthy lives.Through SCOR Life & Health ventures, we are developing a community of trusted partners to provide our clients with services that improve the health and wellness of their policyholders. These innovative offerings increase engagement opportunities and empower policyholders to make healthy lifestyle choices.
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Empowering people to live longer
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www.scor.com
SCOR Global Life is committed to helping people live long and healthy lives.Through SCOR Life & Health ventures, we are developing a community of trusted partners to provide our clients with services that improve the health and wellness of their policyholders. These innovative offerings increase engagement opportunities and empower policyholders to make healthy lifestyle choices.
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Brona MageeDeputy CEO, SCOR Global Life
“The focus on wellness is especially exciting because it promotes longer, healthier lives for policyholders and better business performance for life insurers–truly a win-win.”
■ Partnering with insurtech companies.
■ Leveraging the benefits of data & technology.
■ Making its value available to our clients.
Brona Magee, Deputy CEO for SCOR Global Life, is deeply involved in innovation at SCOR. She is particularly focused on strategic partnerships with clients and insurtech players to advance development of data and technology driven solutions. “These partnerships enable us to support clients in their efforts to offer products and services that promote healthy lifestyles and meet the needs of the next generation of consumers.”
How transformative are the changes taking place?It’s undeniable that as we look around the world of life insurance markets, the ecosystem is changing. The traditional value chain—consumer, agent, life insurer, reinsurer—is being replaced by new models driven by consumer needs and behaviors. New players are operating within these models, disrupting approaches to distribution, sales, product development and underwriting. This is creating a challenging environment but it’s also unleashing much needed innovation.
Who are the new players and how are they embedded into the ecosystem?We see insurtech start-ups in data aggregation and technology sectors as well as medical and statistical science. They are keen to break into the life insurance market and, far from being competitors, they are partnering with traditional players (insurers and reinsurers). While we see innovation in all areas of life insurance, activity in wellness platforms is a fast-emerging disrupter. The focus on wellness is an especially exciting development because it promotes longer, healthier lives for policyholders and better business performance for life insurers.
What role are reinsurers playing in the changing ecosystem?The reinsurer’s success is tied intrinsically to the success of its ceding company clients. To stay relevant, reinsurers need to be more than a traditional risk taker. Given our unique relationship with carriers, we are natural partners in innovation: we understand the business, share in the risks and possess a wealth of data on our clients’ business.
What is SCOR Global Life doing specifically?We have been forming partnerships around the world to advance innovation in accelerated underwriting and health and wellness initiatives. Earlier this year we formed SCOR Life & Health Ventures to oversee partnerings that can bring value to our clients and
complement SCOR’s in house R&D initiatives. For example, we have partnered with iBeat, the company that created the iBeat Heart Watch. We are working with U.S. clients on pilots to provide the watch to policyholders. We’ve also partnered with Vivametrica, a Canadian insurtech company, to develop a Biological Age Model that uses real time data from wearable devices to underwrite and empower consumers to make informed lifestyle choices. We’re also working with a health management company in Asia that developed an app for monitoring blood glucose levels. Through this partnership, our client can offer life insurance to diabetics at reasonable rates.
It’s important for SCOR Global Life to be at the forefront of the insurtech movement…to help leverage the benefits of new data and technology and make its value available to our clients.
Partners in Innovation
Go to xceedance.com/SOS to get your SOS [email protected] • +1 (617) 531-2158 (USA) • +44 (0) 203 786 1225 (UK)
Boston, USA London, UK Krakow, Poland NCR & Bangalore,India Sidney, Australia
SOSIs your organization treading water operationally?
SOS is not a distress signal. It’s Strategic Operations Support.
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BEST’S REVIEW • NOVEMBER 2018
Go to xceedance.com/SOS to get your SOS [email protected] • +1 (617) 531-2158 (USA) • +44 (0) 203 786 1225 (UK)
Boston, USA London, UK Krakow, Poland NCR & Bangalore,India Sidney, Australia
SOSIs your organization treading water operationally?
SOS is not a distress signal. It’s Strategic Operations Support.
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Amit Tiwari Chief Technology Officer Xceedance
“Industry expertise, combined with extensive knowledge of intelligent technologies, drives the value Xceedance brings to re/insurers.”
■ Industry-focused consultancy and managed services company.
■ Strategic partner for operational transformation.
■ Enables process and technology optimization for re/insurers.
Amit Tiwari, chief technology officer at Xceedance, said insurtech firms may be technology experts, but many lack deep domain knowledge and familiarity with the global nuances of the insurance business. “What distinguishes our capabilities for strategic operations support of re/insurers is a multifaceted understanding of insurance business functions and the enabling role of insurtech.”
Why is insurtech all the buzz now? A continuing soft insurance market and low interest rates compel re/insurers to focus on cost control and expense reduction. Technology can help in cutting frictional costs, creating efficient distribution channels, providing better services to re/insurers, and boosting policyholder retention and renewals. Also, technology continues to improve business processes with artificial intelligence and robotics process automation among the prime elements of insurtech innovation. Generally, technology is much more affordable and adoptable now, especially considering the range of modern IT tools. Finally, interactive technology enables the kind of responsive service consumers increasingly expect. So, it’s up to re/insurers and their partners to address such expectations and leverage insurtech for competitive advantage.
Is competitive differentiation about technology? Technology is usually the answer to a how question, rather than a what question. I’ll use Xceedance as a case in point: What we do is provide strategic operations support—expertise and consultative services that improve every aspect of the insurance lifecycle, from the boardroom to the back office. How we do it is, in part, by deploying appropriate and advanced technological tools. Essentially, technology assists the people and processes with which we excel in supporting our clients. A similar mindset about the role of technology in competitive differentiation is likely prevalent among re/insurers.
Is Xceedance an insurtech company? Yes. But Xceedance is more than, and different from, typical insurtech companies. We see Xceedance as insurtech-plus; that is, we’re a provider and a strategic employer of insurtech. We supply insurtech in the process of delivering SOS—Strategic Operations Support—which includes our resources and capabilities in process optimization, technology transformation and digital enablement. Our vast problem-solving proficiency derives from serving a wide range of insurance organizations, across diverse regulatory jurisdictions and business environments worldwide.
How can re/insurers leverage advanced technology? Technology and data sciences make pricing highly personalized, as more and more risk-specific data becomes available. For example, the insights from driving behavior, health matrices, connected homes, loss detection and prevention tools—mechanical system alerts, water leakage alarms, and roadside assistance programs—add new dimensions to risk management, insurance product design and policy service. All-in-one policies will become more feasible and popular. Intelligent automation will transform operations, removing redundancies and inefficiencies in underwriting, claims processing, back office operations—the length and breadth of the insurance lifecycle.
Xceedance Is Insurtech-Plus
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BEST’S REVIEW • NOVEMBER 2018
Brad ButlerVice President, Chief Technology Officer AURA Technologies, Reinsurance Group of America
“In a lot of solutions today, the disclosure and interview process is very highly coupled with the decision process. We’ve completely separated those.”
■ Makes instant decisions on clean cases.
■ Enables underwriters to focus their attention on more complex cases.
■ SaaS offers economic future-proof solutions to underwriting.
Ask Brad Butler what the future of underwriting looks like, and he’ll tell you without hesitation: The Vice President and Chief Technology Officer AURA Technologies, Reinsurance Group of America says that AURA’s cloud-based system makes this proprietary e-underwriting platform and rules engine easier to deploy as well as more cost-effective and more widely available. Following are excerpts of a recent interview explaining the move to a software as a service (SaaS) model.
What is the future of underwriting automation? We believe insurers want a complete, accurate, timely and informed digital view of an applicant. That will take a lot of new data sources. Some are available today and some are becoming more available. It’s going to take a dramatic change in the types of technology needed to help inform underwriters and to best enable that process. Our goal is to empower the underwriters of the future. Once we are able to take in all of these new data sets, the next step is to assist underwriters in analyzing that data so they can make better and more informed decisions.
How is AURA going to be part of that future? We’ve re-platformed our software and technology from the ground up with a complete vision in mind. The fundamental question is: How do we help insurers prepare for a digital transformation that is still in its infancy? We’ve defined strategic approaches for both how we transform technology itself and how we deliver that technology—and even the scope of the technology that we want to explore. Our vision for AURA is to become the underwriting brain of the industry. That means leveraging the strength of RGA— its mortality insights and expertise, its underwriting insights and its actuarial skills—and baking that in to an underwriting automation solution that will allow carriers to make better and more informed decisions on applicants as they come through the process.
We’ve heard that AURA is future-proof. How so? A big part of our strategy involves staying ahead of the platform curve and designing a decision management solution that will work well into the future. There will be advances in availability of data sets in the future that are not yet envisioned today. Our view is that those will continue to accelerate and will become a more vital part of the process. That will require a new and different approach to technology to both take in and make sense of that data, and then apply mortality and actuarial insights to help inform the life
Building the Future of Underwriting
insurance underwriting process. We’ve taken huge strides forward in that regard and have laid out a clear road map with a leading commercial decision management platform as our strategic partner.
Will AURA improve the customer experience? Absolutely. It will help make the disclosure process much more informed. Instead of asking all the questions up front, sorting through the evidence, and then figuring out how to connect it all—we could flip that order to help insurers streamline the process through better questions and more informed decisions. This will really shorten the lead time to closure and recommendation. The more you can do with an automated solution, the easier you’ll be able to reach a decision and the quicker you can get back to an applicant.
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