Helping contractors to embrace technology

Helping contractors to embrace technology | Insurance Business America

Helping contractors to embrace technology

Among the notable panels at this year’s Insuretech Connect conference in Las Vegas, was one that focused on insurers creating digital ecosystems to deliver more value to policyholders. Leaders from EY, Nationwide, Celent, Travelers and AXA XL touched on different segments that will benefit from ongoing tech adoption and innovation.

Rose Hall, vice president and head of construction innovation at AXA XL, spoke to Insurance Business about digitizing commercial insurance like the industry does on the personal side. Hall is working towards helping the construction industry embrace technology and become more comfortable using it in their businesses.

Read more: AXA XL appoints new head of construction innovation

“The first thing contractors need help with is figuring out what to buy,” she explained. “The problem 10 years ago was that there’s no tech for construction, the problem now is there’s too much.”

The value is in curating the solutions and best practices to adopt technology and helping contractors best utilize data – and that involves ongoing education.

“We decided that since we’ve been a partner in risk, we want to be that partner in the next evolution in risk management which is tech adoption,” she said. “If I assess all the different technology use cases for construction, the top three would be telematics for vehicles, water mitigation, and 360 imaging.”

“The four risks that contractors are concerned with are: safety, cost, quality and scheduling. They have to deliver a quality product, on time and on budget as safely as possible,” Hall added.

“If we think about telematics and imagery, it covers all of that at once. When you have digital imagery, you can tie the progress to the payment and therefore have a better feel for your cost,” she said. “There’s magic in that.” 

Predictive analytics and technology holds a lot of power contractually, and translated into construction makes jobs safer and more efficient.

AXA XL uses a Tech Adoption Maturity Index (TAMI) to assess a client’s use of technology. “I’ve seen all ranges. 2.1 is the lowest we’ve seen, 7.2 is the highest. When you look at that range, it’s going to shift but it will take three to five years before we see more adoption in the construction industry,” Hall noted. 

The biggest challenge in the construction space, according to Hall, is that contractors want an ROI immediately when it comes to tech adoption.

“You can’t look at tech and risk management like that,” she noted. “Twenty years ago, risk management in construction was where tech adoption is today. Risk management wasn’t a buzz word, but we started to realize that managing your risk could make or break profitability.”

“If you’re a contractor building a high rise and you’re making 3% fee, but you lose on claims on the backend, you’re unprofitable not because you’re a bad builder but because you didn’t manage your risk,” she added.

“AXA XL looks at risk as a partnership with our customers, we know that when they adopt technology, they will be more profitable,” she said. “We call it a pair-to-partner play; we’re trying to move from being a pair of claims to a partner in risk.”

As soon as the construction industry has a handle on tech adoption, the next step will be leveraging data. Then the key will be to integrate everything cohesively to have a holistic approach to insuring contractors.

“The ones dedicating themselves to innovation and technology going forward for the value they offer, not for their buck, are going to be the winners in the end,” said Hall.