Embracing a digital mindset and partnership accelerate risk protection
I've just come back from our family summer break and one observation I took away from this trip was just how differently members of my family use and rely on digital technology. Ask members of our household what they consider to be optimal screen time in a day and you'll quickly discover two diverging camps.
While my wife and I subscribe to a "less is more" philosophy, our kids consider limits on screen time as an opportunity to hone their negotiating skills or a time to exercise bravery by breaching the limit. As digital natives, they get much essential information online when they connect online on social media and gaming platforms with their friends. They plan and navigate their day by digital means and prize the easy access to information, and the convenience and connectivity that comes with it.
It struck me that digitalisation in business has a lot to do with the very same concepts of accessibility and personalised data that define the digital native's user experience. To succeed, companies will have to find ways to integrate easy, intuitive and convenient access and personalisation into their core products and offerings. And the insurance industry is no exception.
Adopting the mindset of a digital native
Digitalisation is basically an intelligent form of analysing, connecting and reacting to the data acquired. The crux of the matter is how we apply it. I am certain that if the re/insurance industry exploits the full potential of digitalisation, we can raise our handling of risks to a whole new level.
To transform our industry, we need to adopt the mindset of digital natives: For them, being connected is normal, thinking in silos runs counter for them. This generation intuitively incorporates technology into their daily activities. They have a relaxed approach to new tech tools, as I observe with my children when they explore a new game or program on a smart phone
Significantly, digital natives tend to ask not "what" they need to do, but "why" they need to do it. For the insurance industry, the "why" of digitalisation is clear: it helps us overcome the barriers that prevent us from acquiring risks and makes it easier to reach a broader range of the population in an efficient manner. It also means that we can question the traditional business model and how we reorder or eliminate steps that are not optimal and does not improve the customer experience. If used smartly, we believe digitalisation has enormous potential to help close protection gaps and make the world more resilient.
I see two levels where digitalisation is reshaping re/insurance for the benefit of society. First, by better integrating the entire value chain, with clear benefits being greater efficiency which leads to reduced cost, and a consumer who feels considered. This can make end products more accessible and affordable to more people. Second, the new technology increases the proximity of re/insurance to the consumer. With more granular data and analytics, consumer needs can be more accurately identified and met in a timely manner, allowing customer-friendly product design and pricing.
Digitalisation is extremely efficient because it enables the creation of networks where we can interact seamlessly with partners and create scalable services of mutual value. There are a myriad of opportunities to advance this concept and there are some real examples where we bring this to life:
Integrating an ocean of health records for underwriting
Our partnership with Diameter Health addresses one of the perennial inefficiencies in life and health risk assessment: Our customers shared with us the vexing problem of finding about half of the data in electronic health records unusable for underwriting. We work with Diameter Health on digitising and organising vast amounts of medical documents to make the underwriting assessment much more efficient. So when consumers apply for a life insurance or health insurance policy, they no longer have to wait three to four weeks for someone to review all these documents. Digitalisation reduces the processing costs which should result in lower premiums, while also reducing risks from errors.
Touchless speedy loss assessment
Our screens have been inundated with historic flood events this summer, raising the need for an urgent response. We have taken another new approach to flood risk protection through rapid data analysis with ICEYE, the largest commercial synthetic-aperture radar (SAR) satellite operator and flood monitoring provider. The partnership advances flood risk management, supports disaster response and speeds up claims payments globally by addressing the areas where today's flood models falls short. We can access ICEYE’s SAR data on flood events on a global basis within 24 hours of these events occurring, thereby enabling clients' faster loss assessment and payouts.
Claims journey becomes a digital end-to-end process
Moreover, digital technologies allow us to massively simplify and accelerate the claims process. Swiss Re Smart Claims digital end-to-end solution with OneConnect, a unit of China's Ping An Group, utilises image-based recognition technology and cost prediction algorithms. Within minutes of receiving a picture of the incurred damage it identifies an appropriate repair strategy and cost. If requested, it can trigger an optional immediate cash payout as well.
New solutions for new risks
The beauty of new digital business models and solutions is that they allow us to create more personalised services that adapt to consumers' needs and financial capabilities – so that more people have access to insurance. At the same time, connectivity allows us to share data insights directly with clients to mitigate risk.
However, successful digitalisation requires more than applying new technologies to our business and it doesn’t follow a fixed plan. It’s an ongoing process that will be enabled by advancements in technology, but also by crafting the right partnerships and networks. A digital mindset is essential to design entirely new solutions that mitigate and cover the risks of future generations.