Brian Duperreault, the President and Chief Executive Officer (CEO) of American International Group (AIG), believes that making better decisions with better data is key to the future of the insurance industry.
Speaking with Toni Waterman on the inaugural business show launched by Bermuda Broadcasting, called The Breakdown, Duperreault discussed blockchain and other technological advancements that hold the potential to disrupt and alter the global insurance and reinsurance industry.
“I can’t tell you whether blockchain has legs, I don’t know. I think, you can never be sure. I do think we as a country (Bermuda) need to have a more balanced economy between what we do in the insurance industry, and what’s happening in tourism, etc. And having other sources of revenue and other economic activities makes all the sense in the world. We are a little place, our natural resources are our people, and so how do we utilise the place we’re in and the people we have to create economic wealth and GDP, and growth.
“So, I think experimenting with blockchain, I think that makes all the sense in the world. We should look at some other things too, I guess,” said Duperreault.
For the insurance and reinsurance industry, it’s expected that distributed ledger technology such as blockchain will improve efficiency and lower costs in some parts of the business chain. And while Duperreault underlined that he’s certainly no expert on blockchain, he explained that if you can find a way to utilise blockchain to speed up the process with contracts that go from hand-to-hand, and how you keep track of that, it’s beneficial.
“There should be a frequency of activity in order for you to use a blockchain. If you have an occasional contract that’s quite complicated with lots of wording, it’s like overkill, blockchain doesn’t really help you,” he said.
But while blockchain might well be on track to disrupt and revolutionise parts of the insurance and reinsurance chain, Duperreault said he’s more worried about different types of technology.
“I think data science and algorithmic approaches to decision making, discovery of information, how we go about finding out what’s out there and how do we sift through it and come up with useable information. To me, that’s the real issue in our business,” he said.
The global re/insurance industry has, for a very long time, had a certain way that it collects data, makes analysis on that data, and then comes to a conclusion. However, the world has moved so rapidly, said Duperreault, that there’s now so much data out there that the industry has never looked at, and that actually might “give us a better answer to the question than the ones we are using.”
“So, how you sort all this myriad of information out, how do you distil it, and how do you draw conclusions from it, that’s the whole thing with Artificial Intelligence, machine learning, data science. To me, that’s the key to the future of the insurance industry. Making better decisions with better data,” said Duperreault.