Duck Creek Technologies says it is “making a significant investment” in Australia and the region and describes APAC as its “fastest growing market.”
As a US-based firm that supports the insurance industry, Duck Creek Technologies can offer an important perspective on Australia’s industry, how it compares to the US and what to expect Down Under in the years ahead.
In late 2022, CEO Michael Jackowski (pictured top left) was in Australia for his firm’s Sydney conference. Insurance Business asked him to identify industry trends in the US that he expected to gather pace in Australia. Jackowski identified three.
In November, Jackowski was back in Sydney. IB asked the Duck Creek Technologies CEO if his answer would be the same?
“Yes, 100%,” he said. “The trends I mentioned last year are even more relevant now.”
He suggested at the end of last year, that some drivers behind these trends were more entrenched and had become “business as usual” rather than a phase.
“Trends come and go, but we’ve had recent increases in reinsurance costs, restrictions in supply and no end in sight to natural disasters, inflation and increased costs of funds,” said Jackowski. “So taking these trends and applying them as ‘business as usual’ is going to be one of the best ways for insurers and their distributors to navigate the foreseeable future.”
He said insurers “everywhere,” including in Australia, have taken significant steps to manage and maintain insurance coverages, “particularly on the business side.”
“We can see this with increased participation in the Cyclone Reinsurance Pool and increases in reinsurance coverage,” said Jackowski.
However, he said “more can and needs to be done on the customer side.”
“There’s the opportunity and need for insurers to take a more significant role in helping their customers manage and mitigate risk,” said Jackowski. “With customer-side risk reduced or mitigated, this benefits the insurer.”
Jess Keeney (pictured top right), Duck Creek Technologies’ chief product & technology officer, said insurers’ starting point on the customer side could be providing practical ideas and visibility in terms of what could create risk.
“So that customers can proactively mitigate their risks by having heightened awareness about their own properties and taking action by removing or mitigating risks that could impact them,” said Keeney.
She said insurers’ access to satellite imagery and risk zoning data, for example, could be used more widely to help assess policies and prompt suggestions.
“Such as cutting back encroaching bush and trees or making material changes to their dwelling or features that help them reduce fire or storm damage,” said Keeney.
Jackowski said insurance firms’ ongoing embrace of data and analytics has gathered pace over the last year.
“The most significant change is probably the accelerated use of artificial intelligence and machine learning as these technologies advance,” he said.
Keeney said her firm has partnered with Microsoft to use generative AI capabilities through Azure OpenAI Service. She said this can facilitate “smoother implementation processes, faster speed to market, and better customer experiences” for insurers.
However, Keeney said insurers could increase their use of data and advanced analytics for mitigation and resilience.
“There is so much data available, whether it be through partners or publicly available sources such as the Australian Fire Danger Rating System, the Natural Hazards Disaster Resilience Index, or even Local Government Area maps,” she said. “Consuming and incorporating this readily available data into decision-making can be done at a minimal cost and yet help significantly enhance mitigation or prevention.”
One concern from some local brokers about insurers’ digital transformations is how new technology can shield insurance firms from dealing directly with brokers.
“Insurers would only be doing themselves a disservice if they were using technology to shield themselves from their brokers and customers,” said Jackowski, “rather than bringing them closer and building stronger relationships through technology that improves transparency and collaboration and makes it easier for them to do business together.”
He described brokers as the “custodians” of the more personalised services and products that customers, particularly SMEs, are now wanting.
Jackowski also said that his firm’s insurer customers, who work with SMEs, are taking on broker feedback and offering new products in response much more quickly – in weeks rather than months – compared to other insurers.
He suggested that the delivery mechanism for the digital upgrades that insurance firms need has to be the cloud.
“Brokers and insurers who persist with upgrading their legacy technology to continue to keep it up-to-date are not only incurring monumental costs now; they’re turning their technology into a Frankenstein’s Monster that’s prone to major outages and are going to be even more costly to remedy in the future,” said Jackowski.
What are some of 2024’s insurance industry trends? Please tell us below
