“We reconfigured our entire office space.”
“Demand for APIs has risen considerably among our brokers.”
“Low-code/no-code is a priority for us, especially for complex products that require more rapid change.”
These were among several notable trends that emerged from a conversation among the five insurer panelists at Novarica’s Specialty/Large Commercial Special Interest Group meeting on April 15th. The panelists had several insights into what the future holds for the specialty/large commercial space as the pandemic subsides and beyond.
Expansion of Digital Interactions and Video
The coronavirus pandemic meant that digital connectivity needed to improve, not only between employees at insurers, but also between insurers and brokers, agents, and policyholders. One panelist observed that, “A lot more business has been transacted this year with a lot less time wasted on airplanes.” Video calls are a big part of that, as they encourage better communication than voice calls would on their own.
Is this a shift through a virtual “one-way door”? The panelists agreed that, “Putting this tech back in the box would be like putting a comforter back in the bag.” Video calls are probably here to stay, but so are offices. “We’re not ratcheting back real-estate holdings—even if they’re slightly less occupied,” another panelist explained. “People will still prioritize in-person meetings where they make sense.”
And what makes sense depends on individual factors. Those with plenty of space at home may prefer working from home—those without space often do not. Furthermore, groups that need to interact with office-based staff are more likely to want to be in the office themselves. In the end, it’s about flexibility. “If we want to retain the best talent, they need the choice of where and how to work,” one executive asserted.
On-Demand Insurance, IoT, and Third-Party Data
Some specialty/large commercial carriers are exploring products for “rented” goods or services, but the offerings are still rather niche; they mostly remain restricted to areas like travel insurance and municipal fairs and festivals. Some panelists noted they would like to explore additional such products but that legacy technology is a hindrance. The Internet of Things (IoT) has seen some adoption among specialty/large commercial insurers in loss control, and there is particular interest in the scope for wearables to reduce claims counts and severity in workers’ comp.
Data from IoT has so far been overtaken by offerings from third-party data providers. One attendee brought up an intriguing question: Can this data be shared better within the insurance value chain? After all, distributors, carriers, and reinsurers likely all look up much of the same information to get a single policy underwritten—and pay for it each step of the way. Some carriers are already cooperating with distributors and reinsurers on such efforts.
At the same time, saving money on third-party data can be as much an architecture problem as it is a sharing problem. Insurers should have rules in place ensuring a new inspection is not ordered if one was recently performed. This applies as much to (cheaper) virtual inspections as it does to in-person ones.
Software M&A
M&A activity continues apace in the insurance technology space. This brings both benefits and costs for insurers. On the plus side, you have greater investment in improved products, larger companies with stronger balance sheets, and products with a more global reach. But there are potential downsides as well, such as being a small fish in a now larger pond or losing vendor resources you might have worked well with for years.
One panelist suggested hedging against such risks by taking a “best of breed” approach to software selection. Another also noted that “the best hedge is great architecture.” Smaller bits and pieces put together with services allow individual elements to be replaced as needed.
Emerging Tech
“COVID proved that we can move faster, and people want more speed,” one panelist observed. As part of moving faster, several panelists expressed interest in low-code/no-code platforms to increase flexibility in complex products that require rapid change. They also noted the potential for AI/machine learning to handle unstructured data and RPA as a “gateway technology” for increasing speed and efficiency in higher volume/lower complexity lines.
If you are interested in joining us on August 19 for our next specialty/large commercial meeting, please email us. For more information on all of Novarica’s upcoming virtual events, see our webinars page.
Add new comment