How technology could change the rules of the game

Technology is one of the biggest areas of opportunity for the global insurance sector. My own prediction is that during the next five years we will see a fundamental shift in the use of technology – everything from advanced data analytics, to artificial intelligence, to digital and mobile platforms and real-time risk pricing. 

All of those will not only transform the way the insurance sector does business, but will also transform its relationship with customers. 

The rapid technology advancements could also be a game-changer when it comes to accessing harder to reach markets that have mobile-driven economies.

In short, technology will be the fuel that drives the insurance sector forward in a hyper-connected, digital world.

Insurance companies are on the front foot, and heavily investing in InsurTechs, with 2017 insurer and reinsurer investment breaking records. In total USD 2.3 billion[1] was raised in InsurTech funding last year – a 39% increase on 2016 and the second highest yearly total on record.

Insurers are looking at how they can use digital mobile technology to cut costs, improve customer service and sell direct without the need for brokers. Others are looking at web-based brokerages, which can be faster and cheaper than established networks. All are using data to improve risk-assessment and customer service.

Artificial intelligence (AI) and the internet of things (IoT) now account for almost half of total investment in InsurTech start-ups globally, according to research from Accenture[2]. And last year there were 120 private technology investments made by reinsurers[3] – the highest number recorded for any year to date.

The reality is that we have never had so much data and rapidly advancing technology available to us. In a digital world, their applications will continue to expand and so with it their value. 

A few years ago, I invited a few promising FinTech start-ups into Lloyd’s, before “InsurTech” had been born, and asked them help us find disruptive new technologies to fast-track our 330 year old market into the future of insurance. They came in, took one look, and didn’t come back.

Why? My best guess is that they innovate and disrupt in small chunks, they don’t disrupt the whole eco-system. Seeing how unique and complex our market is, they were baffled as to how they could implement something to cater to the more than 80 insurance businesses competing and collaborating to underwrite the world’s biggest, most complex, and newest risks.

For that reason, we knew that to enable the Lloyd’s market to harness the potential of InsurTech, we needed to partner with and support technology experts. 

We knew we couldn’t simply sit around waiting for solutions to find us and so the idea to create the Lloyd’s Lab was born.

Following a global search for technology talent that drew more than 200 applications from 36 countries, and a competitive pitching process, Lloyd’s has revealed the teams that will be offered a spot in the founding Lloyd’s Lab cohort, kicking off on 8 October. These include:

• ZASTI, an AI technology platform built using proprietary Deep Learning algorithms to provide predictive and diagnostic solutions to solve multiple business problems
• Qnity, a digital insurance that allows individuals to design their own insurance solutions
• Parsyl, a supply chain data platform that combines low-cost sensing hardware and large scale data mining to allow insurers to better anticipate risk and improve the claims process
• Layr, an AI powered insurance platform providing faster access for small businesses buying liability insurance
• Insurercore, a digital-based risk appetite directory for those seeking to place and write risks quickly and conveniently
• iCede, a cloud-based platform that enables large insurance companies to interact across borders in order to arrange insurance cover for multinational corporations
• Geollect, creators of proprietary intelligence software for businesses to improve efficiencies, safety and security
• DropIn, an on-demand live video streaming platform to streamline insurance inspections and catastrophe response assessment using mobile phones and drones
• CargoSnap, a mobile transportation inspection app connected to a powerful online platform to collect, analyse, and share information in the supply chain, speeding up claims
• BelMead Tech, a claims support platform using blockchain and other technologies, to improve the insured’s claim journey whilst also improving efficiencies for the claim handling team

The teams joining the Lab will gain unparalleled access to the world’s largest market for specialist insurance and reinsurance, in support of its digital evolution. This tech talent will help deliver innovative solutions to some of the key challenges the Lloyd’s market faces and make a real impact on the market’s performance in a fast-track fast-fail environment.

The launch of the Lab represents a significant milestone for Lloyd’s as we continue to modernise and harness the opportunities that advanced technology can offer to the 330-year old market, helping Lloyd’s accelerate our evolution into a technology-driven market.

But harnessing technology does not mean letting go of what makes Lloyd’s one of the world’s most trusted insurance brands. It has and will always be the people – the extraordinary talent – who make the Lloyd’s market what it is. Those relationships, and the expertise and innovation that sits within the minds of the thousands of people who work in and contribute to Lloyd’s success, will remain our greatest strength. 

[1] https://newsroom.accenture.com/news/investment-in-insurtech-industry-surged-in-2017-with-europe-emerging-as-key-insurtech-hub-accenture-analysis-finds.htm

[2] https://newsroom.accenture.com/news/artificial-intelligence-and-internet-of-things-attract-almost-half-of-insurtech-funding-globally-in-2016-according-to-accenture-research.htm

[3] https://www.reinsurancene.ws/reinsurers-set-records-2017-insurtech-investment/