The Chief Executive Officer (CEO) of reinsurance giant Swiss Re, Christian Mumenthaler, believes advanced technology, such as artificial intelligence (AI), can help to close the global protection gap.
Addressing an audience during the PwC breakfast at the 2017 meeting of the reinsurance industry in Monte-Carlo, Mumenthaler spoke about the increased digitisation of the insurance and reinsurance industry, a sector that appears ripe for disruption from technology.
The protection gap (disparity between economic and insured losses post-event) is evident in emerging markets, such as parts of Asia and Latin America, and also in more advanced markets such as the U.S.
As an example, Mumenthaler highlighted the severe lack of earthquake protection in California, and told the audience how the lack of trust consumers have for the insurance industry is supporting the protection gap in many parts of the world.
Industries across the world are becoming increasingly digital as the technology advances to a stage where it can boost efficiency, and the insurance sector is one of the industries expected to be widely disrupted.
Mumenthaler feels that AI, such as a personal assistant as seen with Siri, is one area of tech that will advance to a stage where it is “very useful,” and feels that it could help increase insurance penetration across the globe.
With such an advanced personal assistant, Mumenthaler explained that trust will be built between the user and the AI, which is when it can start to impact the finance world.
“Once trust is established, over two or three years, people will say ‘Siri, I don’t trust insurance, what do you recommend?’ And i think that moment will come, and what that means is that the customer will become much more powerful.
“I think most people would love to be able to say Siri, you just choose my motor insurance, and I don’t want to do anything with.”
Then, says Mumenthaler, the personal assistant (which is by no means confined to Siri), will find a policy, and ask whether you want to close on that. Ultimately eliminating the need for the consumer to search for the solution and have any interaction with the actual insurance company.
“I think for a lot of people this will be a huge relief, because they don’t like the interaction with our industry, unfortunately,” continued Mumenthaler.
“I think this could fundamentally alter our industry, and it will also fundamentally close a lot of the protection gap, because once people trust something like that, they will get insured against things they should be insured against,” he added.