Swiss Re’s Chief Executive Officer (CEO) of Reinsurance, Moses Ojeisekhoba, has pointed to “encouraging” signs that technology is shifting global perception and awareness of insurance, as it simultaneously transforms the industry’s products into shorter-term, bite-size, and more cost-efficient solutions.
Ojeisekhoba suggested people’s perceptions of insurance and its use is the “most important thing that has to change,” adding that use-based products were allowing for greater availability as customers embrace the concept of more flexible insurance protections for shorter periods of time, the Canadian Underwriter reported.
However, he added; “We’re still a long way from actually getting to the point where, on a global scale, people are far more aware of what things are and they look at insurance in the way that, in their eyes, makes sense.”
He underlined a sharing economy approach, or parametric-related products, as keys to the re/insurance future; “We go with simple products. We pay at a certain period of time if certain things hit. It allows for the ability and the structure of the product to change completely, which then improves affordability as well.”
Veronica Scotti, president and CEO of Swiss Re Canada, said micro insurance – originally developed for the simple insurance ecosystems and distribution of some of the poorest countries – had now also become a blueprint for re/insurance solutions in developed markets.
“If you use technology as a backbone to your organization and you embed it in all the key processes, I can’t imagine why you couldn’t be delivering policies, for instance, that are on-demand, where the policyholder can say I only want to get that type of coverage.”
“You can assemble a package of solutions that are really bespoke to your needs for a period that is bespoke to your needs, the cost does goes down. Most importantly, the flexibility is enhanced. So it’s not just about is it affordable, but is it doing something for me that I actually value?” she suggested, as reported by the Canadian Underwriter.
Scotti commented on use of smart phones for insurance payouts in schemes developed for emerging markets, as another technology-driven method being adopted by the wider re/insurance market.
The focus, for the Swiss Re experts, is in enhancing insurance penetration and client’s perceptions by breaking down costs through simplifying product offers and payout processes.
And for re/insurers across the globe, who are having to compete in the innovation race, adapting to technological disruption will remain a key to survival over the next five-ten years in a market where traditional institutions have to contend with competition from innovation both within their ranks and from fintech and insurtech start-ups that are revolutionising customer experience.
At the 2017 World Economic Forum in Davos, David Rubinstein, Carlyle Group Co-CEO and Co-founder, spoke of the competition in both lines of the industry; “I don’t know today if the existing organisations will prevail or if these new organisations, we haven’t even heard of, will prevail 5-10 years from now.”
“You have the existing services companies we’re all familiar with, they are innovating and a lot of the Fintech revolution is making it possible for them to provide their services more efficiently and more cheaply; then you have another Fintech revolution which is trying to completely disrupt the banks and the insurance companies – and say we have a whole new way of doing things.
“Will the banks be revolutionised and changed but still be banks and insurance companies that people will be familiar with but just be much more user friendly and cheaper, or will new organisations like Alipay – which is an organisation in China which provides enormous opportunities for people to pay their bills through that system – prevail over the existing institutions, we don’t know, but both are moving forward at exponential rates of change because there’s a lot demand by customers, young people particularly.”
