Tag Archives: insurer of the future

The Insurer of the Future – Part 12

Given that the customer of the future wants solutions rather than products, the employee benefits provider of the future will offer a wider range of products, all designed to work together.

Knowing that careers are becoming to be more fragmented (shorter tenure, parallel income streams, the gig economy), the employee benefits provider will also reduce its dependence on employers.

See also: The Insurer of the Future – Part 10  

The employee benefits provider of the future will offer a broad platform with multiple products (not least life, retirement, health, auto and home) open to employees of multiple companies. That doesn’t mean every employer’s scheme will be the same, as there will still be specifics tuned to the desires of individual companies. But all of the core covers will be the same, allowing the benefits provider to leverage massive buying power, securing excellent deals for employers and employees alike.

Because the core benefits are the same across companies, they’re also portable – very helpful in a world where employees hop regularly from job to job. When an employee leaves company A, he or she can port the entire benefits package to company B. If there’s any premium shortfall, the employee can pay that personally. And the employee benefits provider retains the employee as a customer for longer.

But the new proposition goes even further – because the model recognizes the gig economy and is therefore open to one-person businesses such as Uber drivers as well as employees of larger companies. This, of course, further broadens the customer base served by the provider.

See also: 4 Hot Spots for Innovation in Insurance  

In time, workers’ loyalty will perhaps become more focused on their employee benefits provider than on their individual employers – re-positioning this segment of the industry and opening up further opportunities for innovation.

Earlier articles in this series can be found here.

The Insurer of the Future – Part 11

As I indicated in Part 10, I’m expecting the future role of the broker or agent to be severely curtailed. But that’s not to say there’s no role for intermediaries of a different type.

In commercial lines, I expect to see an expansion of the push that some of the brokers have already made into broader risk management. The Risk Manager of the Future will provide a holistic risk management service to its biggest corporate clients – drawing heavily on IoT and big data analytics to predict risks real-time and prevent them from crystallizing.

Only a small part of the risk manager’s service will involve insurance, but the risk placement process will be highly efficient. The risk manager will be seamlessly integrated with a wide network of insurers that, together, can meet all of the insurance needs of clients.

See also: The Insurer of the Future – Part 10  

The risk manager will place business in two ways: standard and bespoke. However, those terms describe the relationship not with clients, but with partner insurers.

If a risk is standard, such as marine or aircraft cover, the Risk Manager of the Future will already have made arrangements to place pre-agreed percentages or exposure bands with a range of different insurers. And those business rules will be built into a “risk placement hub” linked directly into those insurers’ core systems. This means that the risk can be underwritten in accordance with those pre-agreed arrangements, and policy documents generated, in a matter of seconds.

If, on the other hand, the risk doesn’t match previously agreed arrangements, the Risk Manager of the Future‘s “cognitive placement engine” will swing into action. This will pull together all the information it can on the risk, trawling multiple internal and external sources. It will then automatically pass that data to the underwriting systems of multiple different insurers, negotiating pricing with the AI engines of those individual Insurers and constructing the optimum cover for a client — making trade-offs between the different insurers as appropriate.

Again, once the cover package has been designed and placed, policy documents will be generated automatically and issued to the client.

See also: Innovation: ‘Where Do We Start?’  

Using the power of data analytics and AI, this entire process, end-to-end, will take no more than a couple of minutes.

The Insurer of the Future – Part 10

The earlier articles in this series can be found here

Last year, I moved from the U.K. to the U.S. I tried to arrange insurance directly with the brand names I knew best – but it quickly got difficult. I didn’t have a U.S. credit history, I didn’t have a U.S. insurance history, and I’d only just got a U.S. job.

I realized I needed a broker.

See also: How to Support the Agent of the Future  

That broker was Michelle, and she worked wonders for me. She got me the covers I needed, at a good price, at the right insurer for my circumstances. She was thoughtful, courteous and speedy, and I’ve been delighted by her service. As far as I’m concerned, Michelle earned every cent of her commission.

But I never met Michelle. I never even spoke to her. Everything we did, we did by email.

Which got me thinking – how do I know Michelle isn’t an artificial intelligence (AI) system?

For the Insurer of the Future, I think she will be. In the future, there’s nothing Michelle did for me that couldn’t be done by a properly trained, and properly connected, machine. In the Insurer of the Future’s world, human brokers won’t be needed any more.

I can guess what many of you are thinking: “Hah! Let’s see how much he likes a remote machine when his basement floods.” And you’re probably right. In those circumstances, I might indeed want someone to come and (metaphorically) hold my hand.

But if my basement floods, and a real person does turn up, and she tells me her name’s Michelle – won’t that give me what I need?

I think so. If I need a real person, I’ll be happy that a real person turns up. They don’t even need to be an agent or broker – the Insurer of the Future’s on-site claims handler will be fine, thank you very much.

See also: Insurtechs: 10 Super Agents, Power Brokers  

Some tell me I might be right for personal lines, but commercial lines is more complicated. Well, yes – a lot more data will typically need to be located, analyzed and acted upon. But locating, analyzing and acting on data is exactly what machines can usually do better than humans. Which means it’s even more likely that commercial lines brokers will be disappear.

The Insurer of the Future – Part 9

The other entries in this series can be found here.

As we’ve seen in previous parts, the Insurer of the Future will have far fewer employees in pricing and underwriting, in claims, in product development and in the back office.

Overall, therefore, the Insurer of the Future will have far fewer employees per million of premium than its predecessors. Many tasks previously performed by humans will now be delivered by software.

See also: The Key to Digital Innovation Success  

But that means that the remaining humans, fulfilling key strategic and risk management roles, are far more important than they were.

They will have to be the very best professionals available. Their recruitment, training, development and motivation will have to be top-notch.

They’ll need the very best of support to help them be successful.

They’ll have self-help tools at their fingertips, expert systems support, world-class knowledge management capabilities and collaboration tools to ensure they can deliver to their full potential.

They’ll be part of a culture that is dynamic and exciting, in an environment of constant change – and they will relish every minute of it.

Chances are that, on average, they’ll also be significantly better paid.

See also: Where Are All Our Thought Leaders?  

The Insurer of the Future — Part 8

The other installments in this series can be found here.

So far, I’ve talked about the specifics of claims, underwriting and product development, but I haven’t really talked about the back office administration functions.

If you’ve been with me so far, you won’t be surprised to hear that I think AI, robotics and other automated systems will transform those functions, as well, and empty them of people.

See also: Advanced Telematics and AI  

The Insurer of the Future will reorganize its back office using automation – but it will do so smartly. By smartly, I mean that it will figure out how and where to automate to gain the greatest commercial benefit.

Some processes will need to be transformed by using stronger, more automated, core systems.

Some processes, or sub-processes, will gain most from the use of AI/cognitive capabilities: chatbots, vocalbots, machine learning, recommendation engines etc. And any gaps might best be filled using robotic process automation (RPA) or even non-technology tools such as Lean.

There will be instances where it makes sense to use more than one of these techniques – perhaps capturing short-term efficiency gains through interim RPA of a sub-process, while a more comprehensive longer-term solution is being developed.

See also: 3 Keys to Success for Automation  

The source of success for the Insurer of the Future, however, will be figuring out (smartly) exactly what to apply where, and in what order, to create the highest return on investment.