Tag Archives: Global Insurance Symposium

Looking to Future of Insurance, Insurtech

Carriers, regulators and solution providers in the insurance industry continue to seek innovative solutions to some of the most pressing issues facing the industry. Following are five priorities for insurance leaders to consider, in tandem with insurtech-driven solutions:

Priority 1 – Global risk: Even before the pandemic, volatility in global risks stemming from climate change, economic uncertainties, cyber attacks and more were at the forefront of long-term concerns for insurance providers. The pandemic has accelerated those debates, bringing both urgency and added complexity to forecasters and those evaluating the macro and micro impact of those risks.

Insurtech Response: Better understanding of weather volatility from storms, drought/wildfire, etc., has long been a focus in the insurtech sector, with firms such as Hazard Hub, Opterrix and Athenium Analytics, to name a few, giving insurers greater insights for underwriting and claims. Insurtech cyber solutions are really just starting to take root and grow. A great example of new cyber solutions is Global Insurance Accelerator (GIA) alum Cowbell Cyber, which is providing AI-driven, customized cyber coverages.

Priority 2 – Diversity, equity and inclusion: The increased focus and awareness around DE&I offers many challenges and opportunities for our industry. From very specific challenges such as the “red-lining” issue facing the mortgage industry and risks of biases in AI applications to macro questions about whom and how we serve, DE&I concerns are just beginning to be explored.

See also: How Insurtech Thrived in the Pandemic

Insurtech Response: While much has been discussed at the industry level about the long-term implications of AI bias, insurtech solutions are just starting to bring new tools to market to assist with not only gaining insights from our data but also helping understand and be on the lookout for unintended consequences based on how we are using that data.

In the nearer term, it is very exciting to see new insurtech solutions providing access and new products to support those who have been underserved by traditional means. For example, Caregiven, an Oregon-based startup and GIA alum, enables providers to offer real-time, curated guidance to individuals and families managing end-of-life care for an aging or ailing loved one.

Priority 3 – Managing expenses: The automation revolution coupled with digital-native upstarts is challenging every carrier to rethink their back-end platforms and processes, staffing and other overhead. Choosing from a long list of solutions to help reduce or mitigate expenses with lofty ROI promises is easier said than done for most carriers.

Insurtech Response: While some carriers are waiting for Internet of Things (IoT), robotic process automation (RPA) and AI to fully prove out their ROI, there is still a lot of activity that promises great returns. The top three approaches are:

  1. The acceptance of chatbots for customer service and sales;
  2. Automation solutions to eliminate some of the repetitive tasks associated with old processes; and
  3. Cost-avoidance solutions to mitigate claims, fraud and legal/medical expenses.

Priority 4 – Growth: The industry as a whole is looking beyond traditional insurance products to add value and attract new customers. Some of these solutions are geared around a better understanding of what policy holders need and strive to make a more engaging customer experience. Others are looking to add coverage for risks historically not covered by traditional policies.

Insurtech Response: There has been a wave of new insurance-backed or insurance-related products that are helping consumers and businesses get the protection they require, often at the exact point in time they need it most. Carriers are starting to provide the paper to managing general agencies (MGAs) or developing their own products for risks such as instant-on travel or experience insurance, insurance-backed warranties for consumer products, home warranties and even specialty coverage for solar panels and other environmentally-friendly products.

See also: Why Open Insurance Is the Future

Priority 5 – Transformation: Just a few years ago, insurtech wasn’t taken seriously by most carriers. Today, more and more are realizing they could be facing “adapt or die” scenarios. The bottom line is carriers that are not becoming more agile and digital-first could soon be extinct.

Insurtech Response: One of the main reasons carriers are hesitant to engage with start-ups is the risk associated with the unknown. Statistically, only one in 10 makes it, and 70% fail within the first five years. Fortunately, more and more carriers are responding by not only investing and nurturing these companies to help them be successful, but also redesigning their own systems to be digital-native and enabled by application programming interfaces (APIs), allowing greater agility to plug-and-play new or different solutions as the market changes.

Not coincidentally, all five of these priorities will be explored during the 2021 Global Insurance Symposium, to be held on June 28-30, with the first two – global risk and DE&I – as key themes for keynotes and panel discussions. For a full line-up of speakers and conference information, visit www.globalinsurancesyposium.com.

Using Data to Improve Long-Term Care

In the last 20 years, the insurance industry has rapidly become one of the most data-driven and complex industries in our global economy. With the advent of wearable technologies, improved data-collecting capabilities and the increasing dominance of behavioral economic theories, insurance companies are inundated with data. Used well, these large sums of data can greatly benefit insurance companies and consumers. Returns on policies will increase, along with efficiency, while risk and overall costs will decrease.

However, using all this data well is extremely difficult and requires years of work and expertise. Through my more than 25 years of actuarial and statistical modeling experience, I have seen insurance companies use data well, increasing their profitability in the process. Big data can be a significant asset for insurance companies over the next 100 years, or it could bog down the industry, exacerbating issues that are currently affecting companies across the globe. All this really depends on how the insurance market adapts to and uses big data today, in the early stages of this big data era.

See also: Understanding New Generations of Data  

My current focus is the application of behavioral psychologies to build predictive models to maximize the effectiveness of insurance technologies in the design of new products. Insurance is becoming mediated more and more by mobile, wearable and artificial intelligence (AI) technologies. As generations become more connected through media technologies, leveraging media psychology, actuarial science and data science will be vital to the predictive future of insurance. This is particularly true with regards to attracting new, younger customers to life insurance and other insurance products. Young people are demanding a customer experience centered on quick and easy app-driven solutions over traditional, slower, life insurance models.

There is great potential for the long-term care industry to benefit from innovative technologies that leverage big data, machine learning and artificial intelligence. For example, home care can be improved through the use of robotics and interactive telehealth technologies to mediate the interaction between patients and medical professionals in real time, improving patient outcomes. Wearable technology to monitor biometrics, other than steps, in real time can instantaneously inform of a pending health event requiring medical attention. Big data and computing power are exploding at factorial rates, enabling algorithms to search for significant correlations in seconds rather than months, and the difference has proven to be life-saving. However, it is critical to understand how these algorithms work to prevent abuses of consumer protections.

The GIS advanced regulator training will equip regulators with a conceptual understanding of the machine learning algorithms leveraging big data being used to develop consumer insurance rates. They will learn how to test the appropriateness, power and validity of these statistical modeling tools against the data companies that are using it to build pricing algorithms and fuel AI algorithms. Regulators will also receive training in how to interrogate data for completeness and how to identify hidden biases that may unfairly discriminate against consumers. This training will also engage regulators in discussions of the ethical use of big data, machine learning and AI in preparation for a future where insurance is nearly 100% mediated by technology.

See also: Healthcare Data: The Art and the Science

Companies will have to become good digital citizens and work with regulators to ensure an industry that fosters innovations beneficial to consumers without compromising legal standards and the ethical treatment of all consumers. A future of insurance mediated by big data, predictive algorithms and AI will have great benefits for the human experience. The industry and regulators through cooperative efforts can ensure this promising future for consumers.

I will be moderating the “Can Big Data Save Long-Term Care” breakout panel on Wednesday, April 24, and am organizing and leading the big data and advanced modeling training on April 22-23 and April 25-26 at the 2019 Global Insurance Symposium in Des Moines. To register to attend GIS please go to: https://globalinsurancesymposium.com/register/

Model for Collaboration and Convergence

The Global Insurance Accelerator, based in Des Moines, Iowa, has just participated in the fourth Global Insurance Symposium. Two of the big takeaways are that the insurtech movement is maturing, and there is indeed convergence happening between the traditional industry and the entrepreneurial startups that have new ideas and business models. For the insurance industry to advance, there must be a great deal of collaboration between all types of participants in the marketplace. The GIA represents a great example of how this collaboration can be facilitated.

Since its inception, the GIA has promoted collaboration instead of disruption. There is a clear focus on insurtechs and their potential to bring transformative ideas to the industry, but not with the objective of displacing the existing industry players. The model is designed to look for mutual benefit for insurers and insurtech startups. Insurance companies, regulators, investors, academia and other industry experts like SMA are actively involved with insurtechs to guide and support them as they mature.

See also: Insurance Coverage Porn  

The idea is that there is a win-win situation when the strengths of the traditional industry (capital, regulatory experience, scale, risk knowledge, etc.) can be blended with the strengths of insurtechs. The startups bring an entrepreneurial spirit, speed, innovation and new business models to the game. The best ways to partner and take advantage of these combinations require hard work and are enhanced by facilitating organizations like the GIA.

As the transformation of the insurance industry continues, more and more insurers are seeking to actively partner with insurtechs, leverage emerging technologies and institutionalize innovation. At the same time, the insurtech community in general is maturing and has a greater understanding of the insurance industry and the need to collaborate than it had a couple of years ago. This evolving formula creates the potential to provide new ways to deliver the customer experience, improve operational efficiencies and assist customers in risk management and wealth accumulation, resulting in success for insurers, insurtechs, and other market participants.

Startups Take a Seat at the Table

In an industry where experience matters, and where specific domain knowledge has traditionally been prized above all other things, startups are increasingly being included in strategic conversations, and given a seat at the insurance table. Insurtech startups are bringing important emerging technology innovations and smart business solutions to a stalwart industry, and interest and investment in insurtech is climbing steadily. With the pace of change and competition increasing, as well, leading industry incumbents are beginning to pursue collaboration with fresh partners and platforms.

Age Is Just a Number

There is no right age for launching a startup, or for undertaking an innovation initiative, but many naively assume that younger is always better. In fact, some mix of experience in the industry being targeted along with an innovative idea and entrepreneurial state of mind are likely the best combination.

The Global Insurance Accelerator (GIA) in Des Moines, for example, provides support to insurtech startups worldwide through a mentoring system that matches industry professionals with startups for a chance to better focus product-market fit. The average age of program participants working from Des Moines has increased each year since inception in 2015. The average age was 35 in the first year. It bumped one year to 36 in 2016, and jumped to 40 in 2017.

See also: Will Startups Win 20% of Business?  

This mix of new voices and seasoned experts proves that innovation doesn’t have to come exclusively from one generation. Leveraging industry knowledge and experience with ideas from newcomers can lead to great things when attacking problems worth solving.

Everyone Needs Mentors

Over the course of three cohorts at the GIA, a shift has occurred in the amount of insurance experience the entrepreneurs had coming into the program. In 2015, only a couple of participants had worked in the industry. Now, in 2017, the pendulum has swung to the other end of the spectrum, and almost every member of the cohort has worked in insurance at some point during his or her career.

However, this prior industry experience hasn’t diminished the impact the GIA’s mentors have on any given startup’s evolution. The amazing pool of mentors who have raised a hand and taken a front seat in helping these early-stage InsurTech startups navigate a complex industry remain critical to the program’s success. Although the mentor role is largely to guide and advise, almost all of the GIA’s more than 100 mentors have reported learning as much from the startups.

Collaboration Is Key

There are six companies currently participating in the 100-day GIA program from a combination of the United States, Canada, Germany, and Serbia. The ideas and products offered by these InsurTech startups differ, as do the technologies powering the innovation, but these startups are all entrepreneurs who understand the vast opportunities within the insurance sector.

Moving to the main stage, GIA’s InsurTech startup cohort members gain a seat at the table this Spring during the fourth annual Global Insurance Symposium in Des Moines. Sitting alongside peers in one of the global hubs of the insurance industry, these startups will be able to both learn from seasoned industry experts and share wisdom as well.

See also: 5 Challenges Facing Startups (Part 5)  

The Global Insurance Accelerator experience will culminate in a panel discussion at the Global Insurance Symposium which will discuss lessons learned, and provide an opportunity to network with leaders from around the industry. This experience will allow GIA’s cohort to better understand the industry so transformation can continue from the inside out.

Collaborative efforts like these will not only allow insurance industry players to remain relevant and competitive, but to transform the insurance industry by meeting customers’ needs through new and improved methods.

Q&A With Iowa’s New Commissioner

Q: Congratulations on becoming the new Iowa insurance commissioner. You’re a Missouri native with 30 years of experience in the industry. What brought you to Iowa?

A: Thank you very much. About four years ago, I met Nick Gerhart, who was beginning his tenure as Iowa’s insurance commissioner. We had really good discussions at NAIC meetings, and he needed another member for his senior leadership team. Things really just fell into place. I’ve spent my entire career in consumer protection, and I shared Nick’s values of making government work for the people we serve — in our case, the consumers of insurance products.

Another draw for me was that Iowa is a huge insurance hub. From the outside looking in, I knew that Iowa’s regulatory culture was open communication with the regulated industry. We protect consumers and have high standards for the industry we regulate, but we communicate openly. We may not always agree with insurers, but we are willing to talk about it. I feel many states don’t have that mindset. It makes a big difference to have a focus on consumers while also working with industry in a fair, flexible and positive way. Industry ultimately wants stability and to be treated fairly, and I think that is why Iowa is home to so many insurance companies.

See also: A Commissioner’s View of Innovation  

Q: How does it feel to have the title of insurance commissioner once again? Not many can say that.

A: I am confident that those insurance commissioner statistics are not kept, but in the 150 years of state insurance regulation, I may be the sixth or seventh to serve as insurance commissioner in two separate states. Perhaps I’ll be the answer to a Jeopardy question someday. I’m very pleased to have been appointed by Gov. Branstad and Lt. Gov. Reynolds so that I can continue working to help protect consumers. We have a really, really good staff here at the Iowa Insurance Division, and I consider it an honor to lead them.

Q: What’s your vision for the Iowa Insurance Division moving forward?

A: Consumer protection will be the main focus. Our multi-faceted team is in place to make sure that Iowans are protected.

We have a market regulation team that works with consumers on complaints, enforcement attorneys that ensure companies and producers who are doing what they are supposed to be doing, a fraud bureau that consists of law enforcement officers that investigate insurance fraud and a Senior Health Insurance Information Program (SHIIP) that helps Iowans on Medicare get the information they need to make informed decisions.

Another huge part of consumer protection is ensuring that the insurance companies are solvent to be able to pay claims when needed. Our financial team works hard every day so consumers are protected that way.

We also just recently launched a new website, which really puts consumers first so they can quickly and easily get the information they need.

Q: There’s always talk during a new president’s term about the first 100 days and discussions about the cabinet picks. Is it the same for a new commissioner taking over?

A: Well, in my case, I’ve been appointed by the same administration that my predecessor was. On one level, much stays the same. Early on in Commissioner Gerhart’s tenure, he knew there was a crisis coming as much of our staff was retirement-eligible in the coming years. We put in a lot of work in terms of strategic hires, putting our younger staff in positions to both learn and lead and reorganizing as necessary. We’ve been able to add necessary staff to those regulating company solvency to keep up with the growing and increasingly complex nature of our domestic industry. Still, we may look to continue adding to our senior leadership, whether that be from inside Iowa or outside given the strategic plans put in place under Commissioner Gerhart. I will work with industry, our universities, Lt. Gov. Reynolds and Gov. Branstad to help make Iowa an attractive place to do business and a home for talented insurance professionals.

As for the first 100 days, I think a lot depends on what happens at the federal level in a few areas. What happens with the ACA is yet to be seen but will have a huge impact on what we do here in Iowa. The DOL fiduciary rule is also out there as something we are waiting to see how the new administration deals with. There’s also FIO, and I suppose the list could go on. We’ll continue to be active at the NAIC level to bring ideas forward and work for the best interest of Iowans.

See also: What Is the Right Innovation Process?  

Q: Iowa has generally been very forward-thinking in terms of innovation in the industry. ITL has even joined as a partner to the Global Insurance Symposium that the Iowa Insurance Division helped create. What should we expect at this year’s event?

A: The Iowa Insurance Division has been a founding partner of the Global Insurance Symposium, which is held each spring in Des Moines. This year will be the fourth year, and I think it will be the best one yet. There really is something for everyone. Many of the topics such as artificial intelligence, blockchain, corporate strategy, risk mitigation and innovation in the industry truly transcend all types of insurance. This event brings together top thought leaders in industry from around the world, industry executives, regulators and insurtech startups. I think this event is in a caliber of its own, and I’m really proud to be in a position to help the event grow and showcase all we are doing in Iowa to the rest of the insurance world.

This will be an event that folks won’t want to miss.