Adopting technology does not require the loss of humans in insurance

Bringing in technology does not mean cutting down the number of jobs, instead, it frees humans to do what they do best, innovate, according to a panel at the Global InsurTech Summit.

Technology is taking over more and more parts of our lives, from helping us fill out forms through to delivering us parcels. Questions around whether humans will be replaced by a superior piece of technology is only natural. Although, through history, whenever fresh technology has been developed new jobs are always found. The panel at the Global InsurTech Summit came together and agreed that technology should be the top of the priority list for insurance firms. While it will automate some roles, technology is about improving society and will not be the end of jobs.

The panel consisted of Slice Labs co-founder and CEO Tim Attia, Vitality CEO Neville Koopowitz, Swiss Re chief technology and operations officer Pravina Ladva, Legal and General Insurance CEO Bernie Hickman, and Pukka Insure CEO Sam White.

Slice Lab’s Tim Attia chaired the discussion and pitched the question ‘what issues are top of the agenda for CEOs and COOs of successful insurers,’ to his fellow speakers.

The debate was kicked off by Pukka Insure’s Sam White who put an emphasis on how insurance has lagged behind areas like banking, in terms of digitalisation. Both insurance and banking are notoriously slow to change and the adoption of new technologies, with each being held back by legacy systems. However, banking has seemed to get on the digitalisation train a little quicker, leaving insurance in its metaphorical dust. White expressed, “We should be concerned about the consumer journey. The question is are we digitalizing quickly enough? I don’t think we can. Everywhere else the market is moving so quickly and the experiences that people are getting used to are, on a common place basis, so good.”

Giving an example, White explained how a consumer can go on their mobile banking app and find simple and streamlined processes for various different needs, such as, payments, account monitoring, transfers, and many others. These simplified services are all still yards ahead of the insurance industry and what most players are offering their customers.

Insurance firms cannot get complacent and believe they will get there in time. Consumer do not want to wait. They demand these improved and instant solutions now, because this is what they are getting used to in other industries and providers.

On top of everyone, the incumbents are the ones which should be most fearful, White said. New players will identify the gaps and because they are not reliant on old technology, they can offer the consumer everything they are becoming used to in other sectors. InsurTech is clearly starting to feel the waves of opportunity, with the volume of investment capital increasing at a staggering rate, according to FinTech Global data. Last year witnessed $3.1bn invested into the sector, a figure which is almost double the $1.6bn which had been funded over the course of 2017.

A lot of the technology coming into the insurance industry, or other areas of finance, are around automation, AI and deep learning. These solutions all offer the potential for businesses to remove the need of manual oversight.

White said, “We always talk about removing jobs, but whilst people are doing a job, they can’t think about something new. Technology can do lots of stuff, but it can’t conceptualize something new. The thing for me is if you embrace a technology and you make the boring jobs easier then actually you’re freeing up people to do the magic of being human, which is the art imagining something that could be an even better experience for the consumer that hasn’t ever existed before, like AN Uber or Air B&B.”

General Insurance CEO Bernie Hickman agreed that just because a company is introducing technology solutions to automate certain back-end jobs, this does not mean there are no places for humans in a company. Technology still needs people to work alongside it. Currently tech is not in a stage where it can do everything a human can. Instead, businesses can see strong growth through a hybrid approach.

He said, “What we found is when you are deploying robotics, don’t get tech people doing it. The robotics is good enough these days that we have a team of ex-customer service people [running it]. Every single person deploying robotics in our customer service operation has fielded calls from customers.

“We haven’t seen 10x [growth] but over the last 10 years we’ve seen a 5x improvement in productivity and we haven’t had to lose one job. We haven’t had to recruit as many people but, with natural attrition we have not had to lose a single person. It’s been really empowering for the team because it’s their own colleagues who have been building and constantly innovating with the processes to actually deliver that 5x improvement in productivity.

“You end up with more interesting jobs and the mundane have gone away. So, it’s been a positive experience for us and that’s what we’re looking to maintain,” he added.

Technology is clearly something which should be at the top of CEOs and CCOs to-do list. However, equally White believes firms should be looking to help the world. She said, “I think insurance has this wonderful opportunity to really be a force for good. The whole concept of it in the first instance was that many people would come together to help that one vulnerable individual when an event occurred that they couldn’t handle by themselves. I think we as an industry and as leaders in the industry need to really get back to that and get back to the core of what’s good about what we do and do it in a way that consumers actually want to engage with.”

For insurance firms to go back to their core of helping people, they need a more consumer centric approach to understand their struggles. Vitality’s Neville Koopowitz backed the sense insurance firms need to do more on the front-end side. He said, “the big issue on our agenda is that the traditions of transactional insurer of just paying claims has to transform and it’s about customer engagement.”

Making a business shift perspective towards what a consumer wants is going to be the best way in keeping up with changing consumer demands. There is no point looking at the market from the viewpoint of an insurance firm, when what the customer is actually demanding does not align with this. Shifting this mindset can simply be achieved by communicating with customers and understanding them – rather than just speaking to them during a claim.

Rolling on to the idea of insurance pioneering the sense of good and helping to change the world for a better place, Koopowitz stated that these firms can help encourage better lifestyles. The nature of risks is changing and is heavily dependant on the behaviours of policyholders. Previously, insurance seemed to assume the level of risk when a policy is underwritten will remain static for its duration, but this is not the case, people change. Taking health insurance as an example, people could join a gym, or leave, they might take up dangerous sports or hobbies, or they could become ill, these all impact risk.

Bringing in technology which can leverage behavioural data, companies can begin to adapt to changing regimes or even encourage healthier ones. He said, “It is about incentivizing people to live a healthier life because we understand what the impact of that will be on our bottom line and it will improve retention, it improves risk, risk profits and it’s better for society. I would argue that even though that’s a very difficult thing to measure but with healthier people, the spin off for society is more productivity, less drain on resources on the NHS, etc.”

CEOs and CCOs need to ensure they are looking at bringing in technology, but the question is, what is the best way of doing this. Incumbents can either buy, partner or build it in-house and choosing which one largely depends on cultures within the firm. Swiss Re’s Pravina Ladva believes that diversity is key within the workforce and can help firms decide what’s the best direction for their digitalisation efforts. Getting people involved from different areas of the business can help a business understand what is needed. But it is also good to get outside perspectives and looking into other industries and what they are doing with technology can help.

She said, “Many organizations take different approaches. They set up separate tech hubs and some build it within the house. We firmly believe that tech doesn’t need to be in the garage, it needs to be in the main house. Ultimately you set up a different dynamic and people always look at the cool people over there and they go well, we can’t do that because we’ve got all this rigor that we need to deal with. If we’re going to drive that cultural change, it’s about making technology in the main house to drive the business change for growth but ultimately then making it safe for people.”

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