Our industry experts shared actionable advice on how insurers can win in the new digital age and outlined the types of investments they should make to capitalise on the opportunity presented by technology.
So just how are data and technology transforming insurance? And why does it matter now?
Software can give insurers a durable and compounding advantage in the digital age. According to Thomas Soulez, Chief Product Officer at Cytora, Marc Andreessen’s view that “software is eating the world” has never been more relevant than in insurance today.
Using software, incumbents can move closer to achieving the unit economics of a technology company, with zero marginal and transactional costs. Software can also be built in a flexible and cost effective way, meaning more business problems can be solved through technology.
Consultant and entrepreneur Liuben Siarov explained that microservices enable us to reuse existing software to build new applications quickly through APIs. Looking at Stripe’s APIs demonstrates the revolutionary power of today’s software – you can spin up a new company or adapt to changing business processes at the drop of a hat.
We can combine reusable pieces of software together to build entirely new applications very quickly. Think about that in practical terms, what did Stripe’s API do for businesses? Suddenly, using tools that every programmer knows, in one day you could have a business that is able to send and receive payments.
The idea that software is eating the world isn’t new – we’ve seen it transform industries like consumer lending in the past, where change was driven by the need for an improved customer experience. Our speakers anticipate a similar change in insurance, driven not only by software but by data too.
In insurance, a lot of the data you need for underwriting can be accessed through APIs. Hamzah Chaudhary, director of deployment at Cytora, explained how this can work in an e-trade environment, with APIs increasing quoting capability on e-trade platforms with no increase in transactional cost.
Insurers have relied on judgement for a long time, but relationships and intuition can’t always be something to fall back on. Access to internal and external data means underwriters can bolster their expertise with data and automate low-level risks, enabling faster and better-informed decisions.
Cytora CEO Richard Hartley explained that data is at the core of being an effective tech-enabled insurance company, enabling better decision making across risk selection and pricing operations. Insurers need to update their data, aggregate it together and make the best possible decisions in a flywheel.
The insurance industry has been going through a huge period of change and innovation, driven by access to high quality data and the emergence of new software. While every company needs to digitally transform to compete, the real winners will be those doing things differently.
We heard from Jacqueline McNamee, CEO of digital MGA C-Quence, who explained the opportunity presented by starting with a blank sheet of paper. C-Quence, which has partnered with Cytora on its P&C offering, decided to take control of its own destiny very early on. The company built its own technology stack to solve the specific set of challenges faced in the insurance industry.
But it’s not just new-age MGAs that have the opportunity to innovate. The industry already has a massive exposure to technology, as we heard from Will Hawkins, Co-Head of European Research at KBW. Large global insurers have huge technology budgets and take digital transformation initiatives very seriously, but much of this resource goes on “feeding the machine” and keeping the old systems alive.
Insurers must look at how to use tech to improve bread and butter activities like underwriting, but also need to look at more creative solutions – structuring products for the gig economy, for example – if they are to stay relevant.
We’ll be sharing more insight from our expert speakers on the Cytora blog and social channels over the coming months. In the meantime you can find #CytoraSummit2019 highlights here and can get in touch with the team about future events here.
Finally, we’d like to extend a huge thank you to all of our speakers and attendees, whose expertise and enthusiasm made the Summit such a success! Here’s to Cytora Summit 2020!
