Speaking at S&P Insurance’s 38th Annual Conference in June, Jack Roche, President and CEO of The Hanover Insurance Group, said: “I’ve learned not to underestimate smart people who have a real advantage in terms of software and technology knowledge, and have an accurate view of customer preferences and demands, and their evolution.”
“Although the first and second round of insurtechs didn’t quite achieve what they set out to accomplish, I think they were a major catalyst for all of us to think more about innovations throughout the value chain,” he said.
“I’m one of those who believe that if we don’t make more meaningful progress over the next five years in terms of creating real efficiency and better customer service with all the tools we have, than some of them [insurtech] people, or the next round of those people, will refocus on disruption, probably in the more commoditized areas,” Roche added.
Roche was responding to a question from Brian Suozzo, director of P/C Insurance for S&P Global Ratings, who asked Roche and two other CEOs of P&C insurance organizations to share their views on insurtech innovation. Insurtech “was a buzzword a few years ago, but it’s somewhat failed,” Suozzo observed, asking executives to assess the long-term benefits of tech innovation from different waves of insurtechs – past and future.
Suozzo first posed the questions to Markel Corporation co-CEO Richie Whitt, and Whitt introduced the idea that partnerships with insurtechs make sense for carriers, even if insurtechs’ track record in public markets is n didn’t live up to the buzz described by Suozzo.
“It’s probably clear at this point that a bit of the shine is out of the insurtech market. But that’s not to say the insurtech market hasn’t added [value] to the insurance industry. There have been a lot of innovations from the different insurtechs that have been created. There’s been a lot of investment there, obviously, that may have funded some of that innovation. And while at this point at least they haven’t taken over, which might have been the original goal at least for some of them, it’s more of a partnership model.” , said Whitt. “That’s really the approach we’ve taken. We work with a number of insurtech partners who we believe have come up with great innovations, and [we] combine that with our product knowledge, our distribution knowledge, just our industry knowledge and work together to deliver better solutions to customers.
Whitt concluded, “While valuations probably aren’t that great today, I wouldn’t underestimate the impact insurtechs have had and will continue to have on the innovation they’ve brought to our business. , the partnership that continues to occur between traditional insurers and these insurtechs, and just the fact that it all leads to hopefully better solutions for customers.
“That’s really how we approached him. We seek to partner with people who have great ideas and can create great solutions for our customers. »
Referring to past waves of insurtechs, Roche said: “If they learned one thing [it’s] that underwriting and generating good loss ratios is a little more complicated than some thought.
“But that will change over time as data and technology advances and the opportunities to become more efficient and to underwrite in a unique and different way really start to emerge,” he added.
Roche said The Hanover has dedicated resources, “business-related but not concerned with the day-to-day operations of the business,” carrying out focused explorations of the InsurTech landscape.
Across the industry, he predicted that partnerships will bear fruit over the next few years. “You’re going to see significant progress from a number of carriers to get data moving, better claims propositions, and possibly some movement on the customer acquisition side, although that’s clearly the hardest part.”
Kristof Terryn, CEO of Zurich North America, distinguished between the personal and commercial insurance space when asked by Suozzo to assess the opportunities and threats of insurtech. “The ability to disrupt on the personal lines side through technology is just much greater,” he said. “Some of these platforms have enormous market power. And also when consumers shift to, instead of owning a car, carpooling, or when insurance becomes integrated into a broader home security offering, it it will be more difficult for us to capture this relationship with the consumer.
“So on the retail side, I think the potential for disruption is much greater.”
“In commercial insurance, it is simply difficult to replicate a network of risk engineers – an international network -[and] all the regulatory complexity that comes with it. Agreeing with Whitt, Terryn said the impact of insurtech in business lines has been much more involved in activating existing carriers than disruption.
“There, the race will be between existing carriers. Who best uses new technology in risk selection, in customer service, in driving greater efficiency and in creating new products as well? »
“So I don’t underestimate the impact of technology. It’s going to be huge, but I don’t think you’ll see any disruptors in the commercial insurance space that will take the end-to-end value chain. I think it’s going to be a lot more who gets the most out of this technology in certain parts of this value chain,” Terryn said.
Source: Europe Time News