Insurance Industry Trends from DIA Prime Time

Next Gen Insights | Robert Anderson |
15 December 2020

INTRODUCTION

What are the latest technology trends in the world of insurance? This is exactly what DIA Prime Time was designed to answer. The Digital Insurance Agenda (DIA) conference went online this year, being rebranded as DIA Prime Time to reflect this approach, and it offered four hours of informative content daily for five days.

HIGHLIGHTS

There were many things that struck me about the conference this year. Let’s take a look at just three of the highlights.

Mixing InsurTechs and established players

One of the most impressive things was the great representation, not only of InsurTechs but also of established players. You had the likes of GeoX, CyberCube, and Snapview mixing with Hiscox, Generali, and Allianz. This shows that there are not only new companies trying to shake things up in the insurance industry, but that the big names are willing to experiment as well.

As has been said by many experts in the past decade, the insurance industry is going through a marked time of transition and transformation. If you don’t keep up with the pace of change, you will likely become obsolete. DIA Prime Time has shown that some insurance companies have listened to the cautionary tales of the likes of Kodak, who aren’t afraid to cannibalise existing products in order to launch new ones. If ever there was an exciting time to be in insurance, it is now.

Mixing technology and people

There is an increasing emphasis on using customer experience as a differentiator between insurance providers. This includes thinking about how we can use technology to, somewhat ironically, provide a more human touch.

There are horror stories of companies that got this wrong in the past. For example, the story of Ciaran O'Neill and his family getting stranded for two days in the middle of winter because their car recovery service only included repatriation of their car, but not of the family. My own experience of a car recovery service has likewise been dismal. The one time I had to use it, I was stranded on the side of the road for over eight hours while my car recovery service kept sending me automated texts every hour saying that they were coming imminently. In March of this year, Ei Group, the UK’s largest owner of pubs, found that, while their insurance covered notifiable diseases, they weren’t covered for Covid-19 because the policy didn’t explicitly mention Covid-19 by name.

People don’t want to be caught out by the fine print. They want to know that they are valued and to receive the service that they are paying for. InsurTechs are using technology to try to balance things back in the customer’s favour. One of the highlights of DIA Prime Time was the session on the importance of empathy for the insurance industry. It’s interesting, though, that we are only now focusing on something that should have been fundamental all along.

Mixing theory and product demonstrations

The final highlight of DIA Prime Time that I’ll mention is the mix between theory and product demonstrations. It’s one thing to say that you know how to do something, but it’s another to show it. DIA Prime Time had a nice balance between theory and product demos and therefore was informative on both the intellectual and the practical level. It was great to not only hear about so many new products and services but also to see how they could be applied to real-world use cases.

TRENDS

The following trends became apparent during the five days of the conference.

Embedded insurance

People don’t like to buy insurance; instead, they see it as a “necessary evil”. The more we can hide insurance from the end consumer, the easier it will be to sell it. This is not a new idea, though. For example, look at a car manufacturer’s warranty, which is just a specific type of car breakdown insurance in a different guise. If something breaks in the first three to five years, they agree to fix your car “free of charge”.

However, as we all know, nothing in life is free. The warranty cost is actually priced into the total cost of the car. Embedded insurance is taking this concept and applying it to other use cases. Wakam and Penni.io were just two of the InsurTechs that presented how their products can help embed insurance.

Data augmentation

In this information age, data is everything. The theory is that the more data you have, the more competitive you can be. However, this theory needs to be refined: the more insights you can derive from your data, the more competitive you can be. It’s not about providing more data; it’s about augmenting the data that you have in an intelligible way.

GeoX is one InsurTech that stood out here. They take aerial imagery and, using AI, render three-dimensional models of an area. Thus, they know how tall a building is and whether there are any hazards nearby, such as tall trees or a river that’s likely to flood. This gives property insurance companies actionable intelligence that they can use to refine their rating models.

Artificial Intelligence / Machine Learning

Artificial Intelligence (AI) and Machine Learning (ML) have been touted for a while now as the next big thing in insurance, but they really started to gain traction in recent years. AI/ML is all about identifying normal trends and building use cases for outliers.

For example, LocalTapiola uses AI to identify water usage patterns in partnership with Grohe. When an outlier happens, such as a burst water pipe, AI can immediately flag it and thereby greatly reduce the amount of water damage. This is especially important for church buildings, which often remain unoccupied for a majority of the week.

There are other areas where InsurTechs are using AI/ML, such as:

Blancco for fraud reduction
CyberCube and F-Secure for internet security
Kasko2go, Vesttoo, and A4E for rating and underwriting support
CamCom for remote inspection for instant claims settlement

The message is clear: we can use AI/ML to do things faster, cheaper, and better than when solely relying on manual effort.

Insurance in a box

Insurance platforms have been around for a while, but they remained rather traditional. Granted, some of them have recently added a ‘digital’ front end or moved to the cloud. But without the required changes to the underlying architecture and infrastructure in order to make these services truly digital, such cosmetic changes amount to little more than smoke and mirrors.

However, there are InsurTechs that offer truly digital insurance platforms, like CCS, INSTANDA, and ELEMENT. They can scale on demand, offer the user interface and experience expected by today’s customers, and provide the customisation required by insurance companies to differentiate themselves from their competitors. These digital platforms free insurance companies from having to maintain legacy IT platforms and enable them to focus on what truly matters, which is to provide a great customer experience for the two key touchpoints: policy onboarding and claims management.

CONCLUSION

We have seen more insurance companies wanting to adopt a digital agenda recently, and attending conferences like this one is a way to keep abreast in a rapidly changing landscape. While all the trends highlighted here can help businesses, the best way to have an immediate positive impact on your customers is by improving the user engagement and experience. Leveraging the potential of data augmentation and AI/ML could be very valuable here.

DIA Prime Time was a rather informative and at times entertaining conference. Conditions permitting, DIA will move to Munich next year and will coincidentally be held during Oktoberfest. I already have my beer stein out in anticipation of it – the conference, not Oktoberfest. I hope to see you there.

Robert Anderson

Principal Architect

Robert is an enterprise architect with 20+ years of IT experience and Endava’s principal architect for the insurance industry. His focus is on emerging IT trends, specifically those supporting customer experience, and ensuring that business objectives are met through strategic architecture. Robert has a proven track record of driving change through the adoption of best practices and industry standards. In his spare time, he is a photographer and has had his photos published in magazines, newspapers and photography sites around the world.

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