InsuranceHope in a Burning Building: 5 Key Takeaways from Insurtech Insights USA 2023

Insurtech Insights USA 2023 brought together industry leaders, innovators, and experts to discuss the transformative impact of emerging technologies on the insurance industry. From June 7th to June 8th, the event showcased inspiring sessions, engaging panel discussions, and the opportunity to learn about some of the incredible innovation shaping the insurance industry in a rapidly changing world.

The conference itself came at a pivotal time, an inflection point of an industry reinventing its role in helping the world navigate crisis after crisis. The convergence of global dynamics presents both challenges and opportunities for insurers and insured companies.

Read on to learn more about some of the key insights shaping the conversation at the conference and beyond, as thought leaders from around the world gathered to discuss this transformation in great disruption.

 

Photo: Scene at Javitz Center, NYC, June 7, 2023 captures the stark realities of natural catastrophe and cybercrime.

The Elephant in the Room

While insurtech has primarily been associated with digital transformation, customer experience, and product innovation, the inherent vulnerabilities in operational processes and the potential impact of unexpected events have often been underestimated. However, as the backdrop of unprecedented wildfire haze made startlingly pointed, recent developments such as cybersecurity breaches, natural disasters, climate change, service chain disruption, and impacts of pandemic have made obvious the criticality of operational risk management and resilience in ensuring the long-term viability of insurance businesses.

Recognizing the importance of operational risk and resilience opens up new avenues for insurance innovation. By leveraging technology, data analytics, and automation, insurtech startups such as iluminr and established insurance companies can provide and leverage solutions that proactively identify, assess, and mitigate operational risk and events. This proactive approach not only helps prevent financial losses but also enhances operational efficiency, customer trust, and regulatory compliance for the insurer.

An emerging application of risk and resilience technologies in insurance is leveraging data and technology to make clients more risk-aware and resilient. Insurance companies can offer innovative tools and platforms that provide real-time context, build the muscle memory of resilience through scenario planning and simulation, and offer enhanced connectivity in disruption with response insights, playbooks, and communication.

 

 

Partnerships such as the one between QBE Ventures and iluminr allow insurers to leverage a purpose-built engagement platform to assess a wider range of potential risks, including those arising related to business operations, natural catastrophe, cyber vulnerability, or service and supply chain. These solutions can enable clients to evaluate their overall risk profiles, identify gaps, and implement appropriate risk mitigation measures. By proactively addressing operational risks and enhancing resilience, insurance companies can build stronger partnerships with their clients, provide value-added services beyond traditional coverage, and ultimately create a more risk-aware and resilient customer base.

 

Photo: QBE Ventures, Munich Re Ventures, LM Strategic Ventures Cars and Cocktails Event

Unlocking an Ecosystem’s Potential

Collaborative cross-sector partnerships have the power to transform the landscape by fostering innovation, enhancing customer experiences, and addressing industry challenges collectively. By bringing together public sector entities, private insurance firms, technology providers, and data experts, stakeholders can develop innovative solutions, streamline processes, and enhance risk management strategies. This collaboration leverages the regulatory knowledge of public entities, the industry-specific expertise of private insurers, and the cutting-edge tools and analytics offered by technology and data providers.

These partnerships enhance the purposefulness of innovation by exploring emerging technologies and in the context of tangible problems, present and future. Innovative firms see partnerships like these as a force multiplier for growth. 

“There is hope in this burning building. Imagine the potential if we could only work together.” – Peter Hancock, Former CEO, AIG

In this way, collaborative cross-sector partnerships prioritize customer experiences. By utilizing secure data sharing, advanced analytics, and personalized digital solutions, stakeholders offer tailored insurance products, seamless interactions, and services that help their clients more proactively manage risk. These partnerships emphasize prevention, education, and customer-centricity, providing exceptional experiences that meet evolving customer needs and expectations, building a more resilient ecosystem.

 

 

Agility is Learning

In today’s fast-paced and ever-changing world, success no longer solely belongs to the big fish with a legacy. Instead, it is the fast fish that thrives. This transformative shift in mindset challenges the conventional belief that established entities have a natural advantage over smaller ones. Klaus Schwab’s thought-provoking quote encapsulates this idea: “In the new world, it is not the big fish which eats the small fish, it is the fast fish which eats the slow fish.” Legacy is undoubtedly valuable. A rich history and a strong reputation can provide a solid foundation. However, the key lies in not succumbing to a “legacy mindset.” Stagnation and resistance to change can hinder progress and prevent organizations from adapting to the demands of the modern era. Recognizing that legacy alone is not enough, we must shift our mindset towards embracing agility and continuous learning.

Bill Pappas, the EVP and Head of Technology and Operations at Metlife, emphasized the significance of agility in building business resilience. He explains that agility is more than just speed; it encompasses the ability to learn, unlearn, and relearn. By fostering a culture of continuous learning, organizations can stay ahead of the curve and respond effectively to shifting customer needs, industry trends, and technological advancements.

Agility and continuous learning go hand in hand. They require openness to new ideas, a willingness to challenge the status quo, and a commitment to innovation. In this dynamic environment, businesses must be proactive in seeking knowledge, experimenting with new approaches, and embracing a growth mindset. The ability to learn, forget outdated practices, and learn again becomes a vital competitive advantage.

 

 

The Balancing Act: Risk and Innovation

In the ever-evolving landscape of data strategy and technology, finding the delicate equilibrium between innovation and risk management is crucial. Industry luminary Lisa Wardlaw and Prudential Financial Chief Data Officer Kjersten Margaret Moody brought this concept to life during their session Redefining Rapid: The Power of Data and Technology to Drive Instant Transformation, making the observation: “Brakes are on a car to allow you to go faster.” 

In the digital age, data has emerged as a valuable asset, revolutionizing industries and driving business growth. However, the increasing volume, velocity, and variety of data bring forth challenges that must be addressed to ensure its effective utilization. This is where governance steps in. Governance refers to the framework, policies, and processes that govern the collection, management, and usage of data within an organization.

Governance acts as the brakes on the car of data strategy, providing a necessary mechanism to manage risk and maintain control. It establishes a set of guidelines and principles that enable organizations to harness the power of data while mitigating potential pitfalls. By defining clear roles and responsibilities, ensuring data quality and accuracy, and complying with regulatory requirements, governance creates a foundation of trust and reliability.

However, the role of governance extends beyond risk management. It also enables organizations to accelerate their growth and innovation. Just as the brakes on a car allow for greater speed, effective governance practices empower businesses to navigate through challenges with confidence, make informed decisions, and seize opportunities.

Effective governance sets the stage for the seamless integration of technology within data strategy. As organizations embrace advanced technologies such as artificial intelligence, machine learning, and predictive analytics, governance becomes essential to ensure ethical and responsible use of data. By establishing ethical frameworks and monitoring algorithms, organizations can leverage the transformative potential of technology while safeguarding against unintended consequences.

The convergence of governance, risk, and data strategy is vital for all organizations seeking sustainable success in the digital age. It requires a comprehensive and holistic approach that encompasses data governance frameworks, risk assessments, compliance protocols, and continuous monitoring. Collaboration between business leaders, data professionals, and risk management experts is essential to strike the right balance between innovation and control.

 

Designing Experiences that Delight

The value organizations wish to create for stakeholders should be the driving force behind architecture and decision-making processes. Just as the fixtures in a home shape its overall design, the needs and expectations of stakeholders should shape the framework and strategy of organizations transformation journey. By understanding what your stakeholders truly need and aligning on the desired experiences, organizations lay a solid foundation for successful and impactful transformation.

A key aspect of this approach is designing data that is fit for purpose. Just as every fixture serves a specific function in a home, every piece of data collected and utilized within a transformation regime should have a clear purpose and value. By ensuring that the data supports the experiences and outcomes desired by organizational stakeholders, teams can optimize decision-making, enhance efficiency, and drive meaningful results.

The notion of “doing more with less” is worth considering. A well-designed home optimizes space and functionality; similarly, transformation programs should strive to achieve efficiency and effectiveness with limited resources. This requires thoughtful planning, prioritization, and optimization of processes, technologies, and resources. By focusing on the core experiences and outcomes desired by stakeholders, organizations can streamline your efforts and deliver impactful results while utilizing resources judiciously.

 

A Constellation of Possibility

Insurtech Insights USA 2023 provided valuable insights into the ongoing digital transformation of the insurance industry. As insurers lead the way by embracing emerging technologies, forging strategic partnerships, building the muscle of agility, and reimagining the process of value creation, they are charting new pathways of possibility, bolstering an entire ecosystem in a rapidly evolving operating climate.

Interested in learning more about the convergence of risk, resilience, and insurance and how iluminr supports both insurance organizations and insured companies in navigating disruption? Visit us at iluminr.io and watch more more details on our upcoming August webinar.

 

Author

Paula Fontana

VP Global Marketing, iluminr