Insurance industry needs to build tracks for a digital future

Blog -- 30 August 2022

Author: Marketing

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Insurers have been told that they need to “build the rail tracks” of digital channel delivery if they are to meet the needs of the brokers and clients of the future. In a panel discussion at the Verisk Vision 2022 event, Richard Hartley, CEO of commercial insurance specialist Cytora, said the lessons learned from the rising demand for cyber insurance from SMEs had the potential to be implemented in other areas of the insurance business.

When asked about how Cytora worked with its insurance clients, Hartley said the situation highlighted the need for underwriters to communicate and work with their brokers in the way in which best suited the intermediary. “I think there is a spectrum of digital awareness in the insurance and brokers with which we work,” he explained. “Some will have a forward thinking vision. They want to lay the digital train tracks to more business.

“There are others who are passive and are thinking ‘well that is not our job, others can do that.’ They do not want to move to what they see as being closer to being a tech company. “I think the winners will come from the first camp.”

Hartley added: “Build the train tracks to the brokers to make it easier to receive their risks. There is an exponential opportunity to write more business and also identify the better risks.

“The key will be those train tracks. If you have them you will see more business and you will see risks which you have not seen before. If you do not mind how you receive the risks you will see more of them. It is all part of the move towards and omnichannel approach for the future.”

James Wright, Head of Technology at Beazley Digital went on to explain that the underwriter’s digital operation created at Beazley found greater demand for speciality products from SMEs which wanted cover but not at the scale of the major clients and as such the insurers needed to deliver the product with a greater level of cost efficiency to reflect the size of the exposures and limits involved.

He was asked if the move to a digital future had seen brokers express fears of future disintermediation?

“We are 100% broker led,” he explained. “We are not simply building technology because we can. We are building it with our distribution partners, the brokers.

“In meeting with our brokers, I am not getting those fears.

“We produce the product, we provide advice, and pay the claims. We will let the brokers do what they do best.

“Our success has been based on the ability to work with the digitally minded brokers. If they want a train track we will build it, but we will also fully support the brokers who are not on the tracks.”

Wright added: “Our operating model is attuned to light touch.

“Looking to the future we think two things will happen. Small companies will become big companies and some of the enablers we are currently using and building for high volume business will move up the market to larger risks.”

Hartley added: “If the brokers engage in the emerging channels they may see as disintermediation, it will help them, as there are opportunities for them, they should not feel threatened.

“In the case of cyber insurance there is enormous value in the broker stepping up to work on the solutions.”

Andy Thomas, CEO of KYND which, alongside Cytora, has worked extensively with Beazley Digital added the benefits of a move from analogue to digital will start with the underwriters.

“We all know poor underwriting decisions lead to higher claims, and it is a lesson that needs to be learned when new products come onto the market,” he explained. “We believe there is a tied relationship between the client and insurer, and it is a constant relationship. It is not simply a case of contact maybe once or twice a year. It should be across the year. If the communication is more flexible it can drive greater efficiencies.”

Thomas added: “As a client, if Beazley has insured me for 12 months, why should I need to supply any more information at renewal unless there have been fundamental changes. I should be able to say, ‘you have the information you understand my risk.’

“In reality I should not need to go through the same lengthy process every year. If insurers can grasp that concept and can make the renewal process far less onerous it is sure to enhance the attraction from the clients to remain.”

Tim Rayner, Chief Experience Officer at Verisk Specialty Business Solutions, who facilitated the panel discussion, commented that Verisk is proud to be supporting Beazley Digital and bringing an ecosystem to life through the Sequel Hub and working with partners such as Cytora and KYND.