Advancing technology accelerates change in industry
The short-term insurance sector is undergoing fundamental change, mainly driven by rapidly advancing information technology, according to Edward Gibbens, executive head of commercial and personal at Santam.
He contends that besides for the technically competent people companies employ, data is likely the most important asset in any insurance business today.
“We believe that the technological abilities to assist us in obtaining, managing and analysing the wealth of data we have access to may be what distinguishes the game changers in our industry from the rest. Not only does high quality data enable us to refine our assessment and pricing of risks, thereby improving our underwriting margin, it also allows us to focus on improving our risk management strategies.
MEASURES
“As risks become more complex, so too the measures that are meant to be put in place to protect individuals or businesses from it. We know that cyber security has become a global issue, with still relatively limited data available about cyber attacks.
“In this regard, our specialist insurer, Stalker Hutchison Admiral, spent quite some time designing a comprehensive insurance product that covers the entire life span of a cyber attack (ie to negate the losses to a business in terms of reputation by covering fees for a public relations service, getting a network up and running by offering access to skilled IT professionals and covering the financial losses a business may have experienced).”
Gibbens says that in response to the growing popularity of remotely piloted aircraft systems, the Santam aviation team developed an insurance product that provides the full spectrum of cover for drone owners and operators within the private and commercial space. Santam is one of the few players willing to insure this niche area.
“Over the years, we have built significant expertise and capability in data analytics, relying extensively on external data sourcing, GIS coding, topographical mapping, weather forecasting, predictive modelling and product development, to name a few, all of which serves to strengthen the value we’re creating for our clients, business partners and society as a whole.”
Edwyn O’ Neill, CEO at Bryte Insurance, agrees that technology is accelerating change in the financial services sector — in operational agility, customer expectation and the regulatory requirement. However, he says while technology can be helpful in optimising systems and processes in an insurance business, when it comes to practical insurance costs, such as the cost of car repairs because advancing electronics components need to be imported or result in additional complications, it impacts insurance business’ sustainability and customer premiums.
New technology is becoming available that is allowing companies to enhance the insurance offering in ways that were previously not thought possible, says Douglas Haig, MD at CIA Building Insurance.
“Being part of the worldwide Hannover Re group has provided us with a lot of insight on how technology and data are being used across the globe. This will definitely be a key focus area over the coming period,” says Haig.
Jonathan Rosenberg, CEO at Renasa Insurance Company, says it is technology that differentiates the company from competitors.
IN THE CLOUD
“Renasa operates one of the most advanced cloud-based IT platforms in the industry and has pioneered initiatives which make possible for the first time in the intermediated segment true actuarial pricing in the fashion of direct insurers.
“Renasa’s technology has contributed significantly to its exceptional claims cost efficiency (approaching that of direct insurers) and the ability to bind quickly,” he says.
Furthermore, advanced technology and information systems that make it possible to segment markets according to the smallest details have supported customer trends of personalisation and customisation, which are gaining traction, according to Thomas Kieck, business development director at Tial Technologies.