Technology is viewed as a daunting disruptor by some and a huge opportunity by others. One thing’s for sure – it cannot be ignored.
Fearing or snubbing technology will push insurance companies into the slow lane – something they cannot chance in a world of ever-changing risk, according to Munich Reinsurance America’s innovation executive Bob Mozeika.
“My main piece of advice is for insurance companies and brokers to start small,” he said. “Insurance professionals are naturally risk adverse. Start small with technology and concentrate on one or two areas that will help the whole chain.
“You must start somewhere and right now. This is not the time to be a fast-follower, because that means everyone else is one step ahead. You’ve got to start using technology to collect new data and build a broader knowledge base to move your company on.”
Mozeika spent two years at Plug and Play in Silicon Valley working with start-ups to get to grips with new technology and learn how it’s applicable to the insurance industry.
He described insurtech as being split into two generations. The first generation saw lots of entrepreneurs from various industries attempting to improve customer experience and efficiency. We are now in the second generation, according to Mozeika, which is more focused on collecting new data sources, and getting better at risk assessment, risk selection and underwriting technicalities.
“New technology often sounds amazing, makes sense on paper and seems like a logical business investment – but companies struggle to commercialize it and they don’t have the loss history to prove point that technology,” Mozeika told Insurance Business. “There’s lots of good, simple technology out there that can help improve your claims efficiency process and possibly lower your expense ratio by one or two points.
“Everything is changing, and since we are insuring this ever-changing world, we need to change with it. Embracing technology and using tools that get us more data is going to be the real foundation for change in the future.”
New and emerging risks like cyber require the touch of tech-savvy insurance companies. The only way to get a handle on new and emerging risks is through technology, so it’s vital that everyone’s involved, according to Mozeika.
“I don’t think there’s anything truly disruptive out there,” he added. “Technology is evolutionary. The important thing is for companies to keep up with the times, start small with tech and let it grow.
“Even things that have been deemed truly disruptive didn’t start out as a great big idea. They started out small and they pivoted and turned, and all of a sudden we look back at it and say ‘Wow, that was a small idea that changed everything’.”