Why a ‘blanket investment approach’ to tech solutions isn’t the way forward

How one global insurer is wading its way through the crowded insurtech landscape

Why a ‘blanket investment approach’ to tech solutions isn’t the way forward


By Alicja Grzadkowska

The golden ticket to success in the insurtech space might be a focus on data, based on the insurance industry’s needs and insurance clients’ demands. Take it from one executive, who spoke with Insurance Business at InsureTech Connect (ITC) in Las Vegas and revealed where he’s seeing technology companies bring the most value to insurance.

“In insurance, data is fundamental to what we do in terms of assessing risk and pricing, and there’s been an awful lot that’s gone on with regards to data, particularly as it applies to commercial insurance,” said Sean Ringsted (pictured), executive vice president, chief digital officer, and chief risk officer for Chubb Group, pointing to the small business segment that has been traditionally underserved by insurance. “You have a growing number of small businesses and if you think about an entrepreneur or a start-up, they don’t have much time, cash flow is important, and they want to be able to buy that policy and get it wrapped up quickly. That is really driving a lot of the innovations and advancements around the use of data.”

Simplifying the customer experience is likewise important, especially when it comes to small businesses. Asking only five underwriting questions of a florist or a new online clothing store relies on having a solid foundation of data to work with.

“The customer experience becomes very important – being able to explain in plain English the type of coverages that you should have from a regulatory point of view,” said Ringsted. “We think of cyber, as an example. Most of these businesses are probably unaware or underinsured with regards to cyber, [but] they store personally identifiable information or they may use an outside service for payroll. Packaging all of that up and explaining it to the small business, that is [also] driving, I think, a lot of innovation.”

Walking around ITC 2019, the sheer number of insurtech booths was overwhelming to many insurance experts. However, Ringsted offered up insight on Chubb’s approach to sorting through the many technology offerings today.

“We’re thoughtful [and] we know the type of problems that we’re looking to solve, and then what solutions are out there that we can bring to bear on that,” he told Insurance Business. “There’s a lot of competition out there, and we’ve not sought a blanket investment approach to insurtech. We’ve got a number of investments that we’ve announced, but they’ve been done in a thoughtful way with partners that we’ve worked with that we think are worth backing further.”

There are nonetheless still challenges in navigating a packed insurtech marketplace and identifying the technology trends that incumbents can actually apply in their day-to-day processes.

“I would describe it as that last operational mile. Some of these concepts around the use of data and artificial intelligence, I think everyone gets that high-level concept, but when you actually want to apply it and practice it, at the end of the day there’s a lot of work to take that and apply that to the business,” said Ringsted.

“You can talk about machine learning as a concept, but to actually make that operational, you have to go through and label all your data, and that is such hard work and it takes time. If you think about IoT, you have to now install that device, say in a hospital, so you have to put it behind drywall, for example, [and think about] how you’re going to connect that up to systems. How do you think about data security, how do you think about privacy? There’s a lot that has to happen to make these things operational, and all of that is a breaker on speed.”

Traditional insurers, as well as MGAs and brokerages, can, however, do a few things to best position themselves for long-term success in this technology-driven marketplace.

“I think having a very clear understanding of your customer base and their needs, and then making sure that as an organisation you are organised around those needs with technology [is important],” recommended Ringsted. “I think it starts there, and then you can figure out how you deliver that, whether that’s an internal model or using insurtech.”

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