10
2018: MAKING INSURTECH A REALITY Put the buzzwords aside, stop talking about “digitisation”, and make space for the reality of InsurTech.
2018 MAKING INSURTECH A REALITY Put the buzzwords aside stop talking about ldquodigitisationrdquo and make space for the reality of InsurTech
2
CONTENTS
INSURTECH RISINGLindsey Tis
Strategy Director
Oisin Merrins Editor-in-Chief InsurTech Rising
Charlie Burgess Digital Content Editor
Lindsay BaxterBusiness Development Manager
CONTRIBUTORSRalf Dreischmeier
Senior Partner amp Managing Director Global Leader The Boston Consulting Group
Jennyfer Yeung-WilliamsLeading the UK and European Partner
Engagement at MunichRe Digital Partners
P3 Redefining your digital strategy ndash crucial lessons for insurers Why you should already be on your digital journey
P4 Every day in insurance is a journey of discoveryHow some companies believe they are ldquoreinventing insurancerdquo
P5 Insurance whatrsquos it to you The millennial editionWhat does this lucrative age bracket have to say about the future of insurance
P7 Co-bots not robots ndash the next big step for AI in insurance Many proclaimed 2017 would be ldquothe year for AIrdquo so how right were they
P8 Working together how partnerships are paving the wayThe key word on the scene is collaboration not competition in this case study
Insurance is transforming at light speed into a digital and data-driven business What is likely is that insurers who do not move to adapt and succeed through rapid innovation are destined to be left be-hind perhaps permanently
Responding to the disruption doesnrsquot have to mean over-hauling the entire business model though many companies are turning to this Insurance providers are now modernizing current offerings by lever-aging new technology and developing new propositions to custom-ers as expectations shift and competition increases
In our first of the insurtech 2018 quarterly ebook series we focus on the hurdles and solutions that are driving insurtech and disrupting the industry
Enjoy The InsurTech Rising Team
INTRODUCTION
REDEFINING YOUR DIGITAL STRATEGY ndash CRUCIAL LESSONS FOR INSURERS Ralf Dreischmeier
I was asked to kick-off Londonrsquos InsurTech Rising 2017 conference talking about how insurers can refine their digital strategies Below are some of the key points from the session
During the time in which global GDP has doubled the GDP of the technology industry has multiplied by fourteen Corporate IT spending has reached approximately six trillion dollars making technology the third largest economy in the world So why do productivity gains remain stagnant Of course the technology revolution can create a step-change in the insurance industry but only if insurers think about both lsquothe whatrsquo and lsquothe howrsquo not just technology but organisational structure Going digital in silos will not be enoughIn 2005 there were approximately 1400 InsurTech companies and $27 billion in funding In the 12 years since the proliferation of data and analytics has drawn a great deal more attention to the market Today it is increasingly crowded with approximately 4700 companies and $485 billion in fundingIf insurance companies hope to survive in the throng of new talent fresh ideas and diversifying customer demands they must digitalize But if they wish to flourish they must also meet three key challenges speed scale and value
SpeedSpeed is perhaps the issue that large incumbents struggle with most long-running business practices are deeply ingrained at every level Even those incumbents who have progressed with their digitalisation process still take too long to change the way they underwrite Meanwhile InsurTech start-ups who do not come with the baggage of a legacy are able to quickly adapt to customer needs
Scale All major insurers have put in some effort to digitalize but in todayrsquos market a lsquodigital departmentrsquo or lsquodigital labrsquo will not suffice Within the next half-decade digital will be the standard Running 5 of a company like a digital start-up and keeping the rest unchanged does not make an insurer a digital player From PR to marketing every department needs to be digital-ready and working together as a cohesive unit
ValueWith ever-more competition incumbents cannot rest on their laurels satisfied with adding value at the end of the process Insurers need to start looking at uplift revenue and core savings as measurable concrete benefits The whole customer experience needs to be reimagined in a way that makes added-value clear to both company and customer alikeIf incumbents maintain the status quo productivity loss is inevitable To combat this some companies are enacting technological changes whereas others are implementing organizational ones To choose just one of these is to underestimate the challenges the industry faces Fundamentally changing both is essentialInsurers must adapt to meet the challenges of the industryrsquos digital future The customers of today and tomorrow expect nothing less than a fully-digital customer-centric agile approach that responds to their latest needs This change is not unrealistic it has been successfully implemented by countless other industries By meeting the challenges of speed scale and value through multi-dimensional change incumbent insurers can ensure that the future belongs to them
3
The technology revolution can create a step-change in the insurance industry but only if insurers think about both lsquothe whatrsquo and lsquothe howrsquo
EVERY DAY IN INSURANCE IS A JOURNEY OF DISCOVERY InsurTech Rising
Feedback loops data quality ethics and lsquoreinventing insurancersquo are all topics that insurers are finding jumping onto their radar this year At InsurTech Rising London a key point of discussion was how to best implement AI and lay the foundations to become an intelligent insurer
Nikhil Kaithwal group chief analytics officer at Tryg Michael Natusch global head of artificial intelligence at Prudential and Babak Ahmad CEO at insurersai outlined the complex and labour intensive journey most insurers need to take to start the process of including machine learning into an AI analytical layerldquoWe are on a journey with AIrdquo said Kaithwal ldquoa lot of our resources are dedicated to getting the data flow right from our legacy systems There is a lot of validatingrdquoNot only must the data be validated or lsquocleanedrsquo to populate the analytical engines each set of data must be timely and properly labelled with the event a business wants to predict adds NatuschEach process of cleaning and labelling needs to be paired with the correct set of questions before the ldquofeedback looprdquo of machine learning on top of AI can be complete agrees Ahman ldquoEven if you have good data ndash it may not be the right data to answer your questionsrdquo
What can AI unlock for insurersBut what is the purpose of AI and machine learning in insurance Moderator Chris Sandilands partner at Oxbow Partners pressed the panel to give relevant examples ldquoWhat does it unlockrdquo he askedKaithwal pointed to work at Tryg where the insurer is piloting the use of AI in conjunction with its Salesforce-based sales pipeline Not only did the pilot signpost lsquohot leadsrsquo for the sales people to follow the system also paired certain leads with specific sales people who would be best placed to make the deal The results of the pilot saw conversation rates increase by ldquothree to four timesrdquo he said
However questions around inherent biases in AI were also discussed focusing on the ethical implications If AI were to target certain groups of people for example young people
when marketing car insurance as too expensive ndash what is the ethical implications of pricing certain people out of the market asked SandilandsNatusch veered away from questions around ethics and instead focused on creativity He said ldquoThe reason we are pricing people out of market is because we are lacking the creativity to find a solution to include those peoplerdquoQuestions about inherent biases around sex or race which may find themselves embedded in AI was also given a practical answer Both Natusch and Kaitwal confirmed that an AI algorithm is not built and then set to run without monitoring Algos are constantly monitored to look for and correct any inherent biases At Tryg there is an independent body that conducts these regular audits says KaithwalldquoAs soon as we start trading with historical data we will be susceptible to historical biasesrdquo said Natusch Because of this a team running an AI-based model need to be active to combat those historical biases ldquoNo model is just build and then runs All models need to be reviewed ndash not just for ethical reasons but for business reasonsrdquoThe next few years the panel predicts a world where lsquoAIrsquo is no longer on a job title but is instead viewed as a commodity like electricity The end goal commented Natusch is to ultimately ldquoreinventing insurancerdquo
As soon as we start trading with historical data we will be susceptible to historical biases
5
More news More insight
More fintech discoveryIntroducing the new and improved FinTech Futures a digital
publishing platform for the worldwide fintech community
Built on the renowned Banking Technology brand the industryrsquos go-to news resource for over 30 years FinTech Futures provides daily updates in-depth analysis and expert commentary across a broad range of areas
FinTech Futures also incorporates the monthly Banking Technology magazine and Banking Technology Awards ndash an annual event recognising excellence and
innovation in the use of IT in financial services and the people who make it happen
Find out whatrsquos happening ndash visit us online and subscribe to our free daily newsletter
LendTechWealthTech
Contact Alec Gost Email alecgostknect365com | Tel +44 207 017 6122
FinTech_Futures
wwwbankingtechcom
Many proclaimed that 2017 was to be lsquothe year of AIrsquo with a 300 increase in investment in its technologies predicted compared with 2016 In 2018 start-ups with AI at the core of their business in particular will be looking to benefit from this surge in investment capital as they did last year when 550 raised $5 billion in funding While efforts at embedding human intelligence into machines has a long history recent years have seen a rapid evolution of the technologies captured under lsquoartificial intelligencersquo spurred on by decreasing costs in computing power advances in memory capacity and cloud computing and the necessity borne of the generation of evermore quantities of structured and unstructured data Naturally the ability to quickly and automatically process this data and derive actionable insights is creating a lot of excitement across multiple industries yet there remain a number of obstacles to AI adoption many business leaders cite the lack of a defined business case or required skills or the need to first modernize internal data management platforms
You want to automate whatAdvances in AI are also fundamentally challenging assumptions about what is automatable repetitive rules-based processes are no longer the sole focus as AI opens up the possibility of automating activities that require knowledge and experience Predictably this has led to anxiety around the wholesale replacement of employees by machines This is an anxiety that can in part be challenged by a shift in focus from the automation of occupations to the automation of activities where processes are transformed and roles are redefined rather than made obsolete That machines can complement the capabilities of employees affirming the value of expertise while enabling them to dedicate more time to higher-value work will soon become
clear first in sectors such as financial services where automation will be mostly software-based For many then and in contrast to well-reported events in Japan the near future will be defined more so by the arrival of co-bots in the workplace rather than the sudden and dramatic disappearance of colleagues
Whatrsquos so special about insuranceData rich and characterised by routine processes the insurance industry is ripe for transformation using artificial intelligence and its potential cuts across all lines The ability for example to generate a continuous stream of insights through the automated analysis of both structured and unstructured data could provide a clear view of shifting customer needs at a level of granularity not possible in the past However in order to arrive at this point insurers must align themselves with AIrsquos rise from a cultural technological and organisational perspective Carriers will require an integrated and fully digitized environment the capacity to gather and effectively manage data from a variety of sources and a culture of innovation guided by senior leaders attuned to the pace of change and transformational potential of AI in order to succeed In terms of automation systems that simply lsquodorsquo such as RPA have delivered efficiencies in the back office across the insurance industry providing a scalable way to carry out administrative tasks for example in data entry and notifications 2017 saw a greater emphasis placed on mapping a route to systems capable of learning harnessing technologies like machine learning for their capacity to analyse large amounts of data from various sources and feed into both processes that are dynamic and unbound by rules and 2018 is set to follow suit
CO-BOTS NOT ROBOTS - THE NEXT BIG STEP FOR AI IN INSURANCE Oisin Merrins
I was asked to kick-off Londonrsquos InsurTech Rising 2017 conference talking about how insurers can refine their digital strategies Below are some of the key points from the session
7
8
Insurance the co-bots are comingMachine learning is attracting such attention in the insurance industry as well as in other sectors because it dramatically reduces the cost and increases the quality of prediction Considering that tasks can be broken down into four parts (data prediction judgment and action) ML relates to one input of automation and as the technology matures the predictions of humans will increasingly be displaced However employees in the insurance industry will be in a position to complement prediction by exercising their capacity for judgment This means for example that while ML will lead to the automation of standardized underwriting across auto home commercial and life insurance it could also be deployed alongside employees in the identification of emerging risks Data analysis could be combined with human judgment as part of an iterative process that would see feedback and reinforcement given to an ML component tasked with analysing trends and identifying risks the significance and growth of which would then be monitored by employees with sufficient domain expertise
Roles redefinedShifting the focus to the automation of activities rather than occupations throws up some interesting questions should we really be preparing to bid farewell to underwriters or should we instead be thinking about how their roles might be redefined as the predictive power of AI increases Could the role of the underwriter become more sales-oriented given their extensive domain expertise and deep product knowledge While both opportunities and uncertainty abound exploiting technologies like ML will require strong leadership guided by a strategic vision oriented towards becoming a truly data-driven business C-level insurance executives should be encouraged to recognise the increased importance of data insights relative to domain expertise and the potential of artificial intelligence to work alongside and enhance the performance of their companiesrsquo employees
May 9-10 2018Boston
WErsquoRE LOOKING FOR SPEAKERS FOR INSURTECH RISING US
If you want to get your voice heard get in touch with Oisin Merrins on +44 (0) 20 7017 7200 or OisinMerrinsknect365com
How are partnerships beneficial to you at Munich Re Digital PartnersMunich Re Digital Partners are partnering with start-ups and companies looking to improve the way insurance is transacted by innovating the customer journey making insurance more accessible more tailored and making emerging risks insurable these are being done by leveraging new technologies currently available data and newly sourced data Alone we would not be able to achieve a fast and efficient way of doing this thus partnerships are a crucial part of our strategy We are getting through our partnerships access to the latest technology a deeper understanding of the end customers a closer engagement with them and this enables us to continue to be able to better design insurance products to meet the evolving needs and expectations of the public Internally our unit is bringing a different dimension to the existing book of Insurance of Munich Re and are contributing to the long term strategy of keeping up with digitilisation
How is MunichRe Digital Partners leading the wave of InsurTech within the insurance sectorOur unit has been set-up with the sole purpose of working with InsurTechs the start-ups with an insurance product that they wish to distribute in either a b2b b2b2c or b2c concept We are a team of professionals from a mixture of backgrounds including insurance as you would expect but also technology project management and start-ups We thus talk the language of the start-ups we understand their needs and their ambitions and we are set-up to respond to these We may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territories we are helping our partners launch innovative products to use new distribution channels and to experiment on new pricing techniques We enable our partners to achieve this by providing them not only with primary insurance capacity globally but also a tech platform with modular services (mostly back-end operational services) from which our partners can pick and choose to complement and complete their offering to their customers We also provide access to VC funding to the InsurTechs Most importantly we operate at a pace consistent with the start-ups themselves ndash execution is key We believe our offering is unique in the market and we believe such a model provides the InsurTechs with further means to achieve speed to market Additionally we are also teaming up with digital verticals to allow them to access the insurance market
What challenges have you encountered with partnering InsurTech
We didnrsquot expect that there would be such a demand for our support We had initially planned to work with InsurTechs on all insurance lines of business but we had to limit our offering to property and casualty up to now We will look at opportunities on the other lines of business in the near futureOne has to also bear in mind that MRDP is in itself a start-up we have been in operation only since last May and we have officially already announced 8 partnerships We are currently working with circa 20 partners in different lines of business territories and with different requirements It is very demanding but the strength of our team both in term of expertise and team spirit and more importantly the energy that drives the start-ups who we are partnered with helps to make it all worthwhileWe also do sometimes face challenges in the new risks we are bringing into Munich Re Grouprsquos portfolio but there again the cooperation and support we have internally from our Munich Re colleagues is unrivalledWe fortunately do not face the limitations that legacy systems or ldquolegacy thinkingrdquo might bring to start-ups with innovating ideas in that space I can say we are in a different position compared to some incumbentsLastly and more importantly we are fortunate to have the Munich Re Board of Management support and understanding for our business model
What does the future hold for partnerships and InsurTechWe believe that partnering is crucial if we want change to happen InsurTech holds expertise that us incumbents donrsquot and vice versa We believe each stakeholder should concentrate on what they do best and find the right partners so as a team they can innovate intelligently within the insurance market The lsquopartnersrsquo will evolve beyond what we see now new entrants would not necessarily be from the insurance industry We see the team behind the InsurTech evolve to include more and more insurance professionals who are seeking to bring changes to the insurance market and cannot do so within their current role
WORKING TOGETHER HOW PARTNERSHIPS ARE PAVING THE WAY FOR INSURTECHS InsurTech Rising
ldquoWe may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territoriesrdquo Leading the UK and European Partner Engagement at Munich Re Digital Partners Jennyfer Yeung-Williams talks to us about how her team are making an InsurTech success story out of their partnerships
JOIN THE CONVERSATIONINSURTECHRISING
2
CONTENTS
INSURTECH RISINGLindsey Tis
Strategy Director
Oisin Merrins Editor-in-Chief InsurTech Rising
Charlie Burgess Digital Content Editor
Lindsay BaxterBusiness Development Manager
CONTRIBUTORSRalf Dreischmeier
Senior Partner amp Managing Director Global Leader The Boston Consulting Group
Jennyfer Yeung-WilliamsLeading the UK and European Partner
Engagement at MunichRe Digital Partners
P3 Redefining your digital strategy ndash crucial lessons for insurers Why you should already be on your digital journey
P4 Every day in insurance is a journey of discoveryHow some companies believe they are ldquoreinventing insurancerdquo
P5 Insurance whatrsquos it to you The millennial editionWhat does this lucrative age bracket have to say about the future of insurance
P7 Co-bots not robots ndash the next big step for AI in insurance Many proclaimed 2017 would be ldquothe year for AIrdquo so how right were they
P8 Working together how partnerships are paving the wayThe key word on the scene is collaboration not competition in this case study
Insurance is transforming at light speed into a digital and data-driven business What is likely is that insurers who do not move to adapt and succeed through rapid innovation are destined to be left be-hind perhaps permanently
Responding to the disruption doesnrsquot have to mean over-hauling the entire business model though many companies are turning to this Insurance providers are now modernizing current offerings by lever-aging new technology and developing new propositions to custom-ers as expectations shift and competition increases
In our first of the insurtech 2018 quarterly ebook series we focus on the hurdles and solutions that are driving insurtech and disrupting the industry
Enjoy The InsurTech Rising Team
INTRODUCTION
REDEFINING YOUR DIGITAL STRATEGY ndash CRUCIAL LESSONS FOR INSURERS Ralf Dreischmeier
I was asked to kick-off Londonrsquos InsurTech Rising 2017 conference talking about how insurers can refine their digital strategies Below are some of the key points from the session
During the time in which global GDP has doubled the GDP of the technology industry has multiplied by fourteen Corporate IT spending has reached approximately six trillion dollars making technology the third largest economy in the world So why do productivity gains remain stagnant Of course the technology revolution can create a step-change in the insurance industry but only if insurers think about both lsquothe whatrsquo and lsquothe howrsquo not just technology but organisational structure Going digital in silos will not be enoughIn 2005 there were approximately 1400 InsurTech companies and $27 billion in funding In the 12 years since the proliferation of data and analytics has drawn a great deal more attention to the market Today it is increasingly crowded with approximately 4700 companies and $485 billion in fundingIf insurance companies hope to survive in the throng of new talent fresh ideas and diversifying customer demands they must digitalize But if they wish to flourish they must also meet three key challenges speed scale and value
SpeedSpeed is perhaps the issue that large incumbents struggle with most long-running business practices are deeply ingrained at every level Even those incumbents who have progressed with their digitalisation process still take too long to change the way they underwrite Meanwhile InsurTech start-ups who do not come with the baggage of a legacy are able to quickly adapt to customer needs
Scale All major insurers have put in some effort to digitalize but in todayrsquos market a lsquodigital departmentrsquo or lsquodigital labrsquo will not suffice Within the next half-decade digital will be the standard Running 5 of a company like a digital start-up and keeping the rest unchanged does not make an insurer a digital player From PR to marketing every department needs to be digital-ready and working together as a cohesive unit
ValueWith ever-more competition incumbents cannot rest on their laurels satisfied with adding value at the end of the process Insurers need to start looking at uplift revenue and core savings as measurable concrete benefits The whole customer experience needs to be reimagined in a way that makes added-value clear to both company and customer alikeIf incumbents maintain the status quo productivity loss is inevitable To combat this some companies are enacting technological changes whereas others are implementing organizational ones To choose just one of these is to underestimate the challenges the industry faces Fundamentally changing both is essentialInsurers must adapt to meet the challenges of the industryrsquos digital future The customers of today and tomorrow expect nothing less than a fully-digital customer-centric agile approach that responds to their latest needs This change is not unrealistic it has been successfully implemented by countless other industries By meeting the challenges of speed scale and value through multi-dimensional change incumbent insurers can ensure that the future belongs to them
3
The technology revolution can create a step-change in the insurance industry but only if insurers think about both lsquothe whatrsquo and lsquothe howrsquo
EVERY DAY IN INSURANCE IS A JOURNEY OF DISCOVERY InsurTech Rising
Feedback loops data quality ethics and lsquoreinventing insurancersquo are all topics that insurers are finding jumping onto their radar this year At InsurTech Rising London a key point of discussion was how to best implement AI and lay the foundations to become an intelligent insurer
Nikhil Kaithwal group chief analytics officer at Tryg Michael Natusch global head of artificial intelligence at Prudential and Babak Ahmad CEO at insurersai outlined the complex and labour intensive journey most insurers need to take to start the process of including machine learning into an AI analytical layerldquoWe are on a journey with AIrdquo said Kaithwal ldquoa lot of our resources are dedicated to getting the data flow right from our legacy systems There is a lot of validatingrdquoNot only must the data be validated or lsquocleanedrsquo to populate the analytical engines each set of data must be timely and properly labelled with the event a business wants to predict adds NatuschEach process of cleaning and labelling needs to be paired with the correct set of questions before the ldquofeedback looprdquo of machine learning on top of AI can be complete agrees Ahman ldquoEven if you have good data ndash it may not be the right data to answer your questionsrdquo
What can AI unlock for insurersBut what is the purpose of AI and machine learning in insurance Moderator Chris Sandilands partner at Oxbow Partners pressed the panel to give relevant examples ldquoWhat does it unlockrdquo he askedKaithwal pointed to work at Tryg where the insurer is piloting the use of AI in conjunction with its Salesforce-based sales pipeline Not only did the pilot signpost lsquohot leadsrsquo for the sales people to follow the system also paired certain leads with specific sales people who would be best placed to make the deal The results of the pilot saw conversation rates increase by ldquothree to four timesrdquo he said
However questions around inherent biases in AI were also discussed focusing on the ethical implications If AI were to target certain groups of people for example young people
when marketing car insurance as too expensive ndash what is the ethical implications of pricing certain people out of the market asked SandilandsNatusch veered away from questions around ethics and instead focused on creativity He said ldquoThe reason we are pricing people out of market is because we are lacking the creativity to find a solution to include those peoplerdquoQuestions about inherent biases around sex or race which may find themselves embedded in AI was also given a practical answer Both Natusch and Kaitwal confirmed that an AI algorithm is not built and then set to run without monitoring Algos are constantly monitored to look for and correct any inherent biases At Tryg there is an independent body that conducts these regular audits says KaithwalldquoAs soon as we start trading with historical data we will be susceptible to historical biasesrdquo said Natusch Because of this a team running an AI-based model need to be active to combat those historical biases ldquoNo model is just build and then runs All models need to be reviewed ndash not just for ethical reasons but for business reasonsrdquoThe next few years the panel predicts a world where lsquoAIrsquo is no longer on a job title but is instead viewed as a commodity like electricity The end goal commented Natusch is to ultimately ldquoreinventing insurancerdquo
As soon as we start trading with historical data we will be susceptible to historical biases
5
More news More insight
More fintech discoveryIntroducing the new and improved FinTech Futures a digital
publishing platform for the worldwide fintech community
Built on the renowned Banking Technology brand the industryrsquos go-to news resource for over 30 years FinTech Futures provides daily updates in-depth analysis and expert commentary across a broad range of areas
FinTech Futures also incorporates the monthly Banking Technology magazine and Banking Technology Awards ndash an annual event recognising excellence and
innovation in the use of IT in financial services and the people who make it happen
Find out whatrsquos happening ndash visit us online and subscribe to our free daily newsletter
LendTechWealthTech
Contact Alec Gost Email alecgostknect365com | Tel +44 207 017 6122
FinTech_Futures
wwwbankingtechcom
Many proclaimed that 2017 was to be lsquothe year of AIrsquo with a 300 increase in investment in its technologies predicted compared with 2016 In 2018 start-ups with AI at the core of their business in particular will be looking to benefit from this surge in investment capital as they did last year when 550 raised $5 billion in funding While efforts at embedding human intelligence into machines has a long history recent years have seen a rapid evolution of the technologies captured under lsquoartificial intelligencersquo spurred on by decreasing costs in computing power advances in memory capacity and cloud computing and the necessity borne of the generation of evermore quantities of structured and unstructured data Naturally the ability to quickly and automatically process this data and derive actionable insights is creating a lot of excitement across multiple industries yet there remain a number of obstacles to AI adoption many business leaders cite the lack of a defined business case or required skills or the need to first modernize internal data management platforms
You want to automate whatAdvances in AI are also fundamentally challenging assumptions about what is automatable repetitive rules-based processes are no longer the sole focus as AI opens up the possibility of automating activities that require knowledge and experience Predictably this has led to anxiety around the wholesale replacement of employees by machines This is an anxiety that can in part be challenged by a shift in focus from the automation of occupations to the automation of activities where processes are transformed and roles are redefined rather than made obsolete That machines can complement the capabilities of employees affirming the value of expertise while enabling them to dedicate more time to higher-value work will soon become
clear first in sectors such as financial services where automation will be mostly software-based For many then and in contrast to well-reported events in Japan the near future will be defined more so by the arrival of co-bots in the workplace rather than the sudden and dramatic disappearance of colleagues
Whatrsquos so special about insuranceData rich and characterised by routine processes the insurance industry is ripe for transformation using artificial intelligence and its potential cuts across all lines The ability for example to generate a continuous stream of insights through the automated analysis of both structured and unstructured data could provide a clear view of shifting customer needs at a level of granularity not possible in the past However in order to arrive at this point insurers must align themselves with AIrsquos rise from a cultural technological and organisational perspective Carriers will require an integrated and fully digitized environment the capacity to gather and effectively manage data from a variety of sources and a culture of innovation guided by senior leaders attuned to the pace of change and transformational potential of AI in order to succeed In terms of automation systems that simply lsquodorsquo such as RPA have delivered efficiencies in the back office across the insurance industry providing a scalable way to carry out administrative tasks for example in data entry and notifications 2017 saw a greater emphasis placed on mapping a route to systems capable of learning harnessing technologies like machine learning for their capacity to analyse large amounts of data from various sources and feed into both processes that are dynamic and unbound by rules and 2018 is set to follow suit
CO-BOTS NOT ROBOTS - THE NEXT BIG STEP FOR AI IN INSURANCE Oisin Merrins
I was asked to kick-off Londonrsquos InsurTech Rising 2017 conference talking about how insurers can refine their digital strategies Below are some of the key points from the session
7
8
Insurance the co-bots are comingMachine learning is attracting such attention in the insurance industry as well as in other sectors because it dramatically reduces the cost and increases the quality of prediction Considering that tasks can be broken down into four parts (data prediction judgment and action) ML relates to one input of automation and as the technology matures the predictions of humans will increasingly be displaced However employees in the insurance industry will be in a position to complement prediction by exercising their capacity for judgment This means for example that while ML will lead to the automation of standardized underwriting across auto home commercial and life insurance it could also be deployed alongside employees in the identification of emerging risks Data analysis could be combined with human judgment as part of an iterative process that would see feedback and reinforcement given to an ML component tasked with analysing trends and identifying risks the significance and growth of which would then be monitored by employees with sufficient domain expertise
Roles redefinedShifting the focus to the automation of activities rather than occupations throws up some interesting questions should we really be preparing to bid farewell to underwriters or should we instead be thinking about how their roles might be redefined as the predictive power of AI increases Could the role of the underwriter become more sales-oriented given their extensive domain expertise and deep product knowledge While both opportunities and uncertainty abound exploiting technologies like ML will require strong leadership guided by a strategic vision oriented towards becoming a truly data-driven business C-level insurance executives should be encouraged to recognise the increased importance of data insights relative to domain expertise and the potential of artificial intelligence to work alongside and enhance the performance of their companiesrsquo employees
May 9-10 2018Boston
WErsquoRE LOOKING FOR SPEAKERS FOR INSURTECH RISING US
If you want to get your voice heard get in touch with Oisin Merrins on +44 (0) 20 7017 7200 or OisinMerrinsknect365com
How are partnerships beneficial to you at Munich Re Digital PartnersMunich Re Digital Partners are partnering with start-ups and companies looking to improve the way insurance is transacted by innovating the customer journey making insurance more accessible more tailored and making emerging risks insurable these are being done by leveraging new technologies currently available data and newly sourced data Alone we would not be able to achieve a fast and efficient way of doing this thus partnerships are a crucial part of our strategy We are getting through our partnerships access to the latest technology a deeper understanding of the end customers a closer engagement with them and this enables us to continue to be able to better design insurance products to meet the evolving needs and expectations of the public Internally our unit is bringing a different dimension to the existing book of Insurance of Munich Re and are contributing to the long term strategy of keeping up with digitilisation
How is MunichRe Digital Partners leading the wave of InsurTech within the insurance sectorOur unit has been set-up with the sole purpose of working with InsurTechs the start-ups with an insurance product that they wish to distribute in either a b2b b2b2c or b2c concept We are a team of professionals from a mixture of backgrounds including insurance as you would expect but also technology project management and start-ups We thus talk the language of the start-ups we understand their needs and their ambitions and we are set-up to respond to these We may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territories we are helping our partners launch innovative products to use new distribution channels and to experiment on new pricing techniques We enable our partners to achieve this by providing them not only with primary insurance capacity globally but also a tech platform with modular services (mostly back-end operational services) from which our partners can pick and choose to complement and complete their offering to their customers We also provide access to VC funding to the InsurTechs Most importantly we operate at a pace consistent with the start-ups themselves ndash execution is key We believe our offering is unique in the market and we believe such a model provides the InsurTechs with further means to achieve speed to market Additionally we are also teaming up with digital verticals to allow them to access the insurance market
What challenges have you encountered with partnering InsurTech
We didnrsquot expect that there would be such a demand for our support We had initially planned to work with InsurTechs on all insurance lines of business but we had to limit our offering to property and casualty up to now We will look at opportunities on the other lines of business in the near futureOne has to also bear in mind that MRDP is in itself a start-up we have been in operation only since last May and we have officially already announced 8 partnerships We are currently working with circa 20 partners in different lines of business territories and with different requirements It is very demanding but the strength of our team both in term of expertise and team spirit and more importantly the energy that drives the start-ups who we are partnered with helps to make it all worthwhileWe also do sometimes face challenges in the new risks we are bringing into Munich Re Grouprsquos portfolio but there again the cooperation and support we have internally from our Munich Re colleagues is unrivalledWe fortunately do not face the limitations that legacy systems or ldquolegacy thinkingrdquo might bring to start-ups with innovating ideas in that space I can say we are in a different position compared to some incumbentsLastly and more importantly we are fortunate to have the Munich Re Board of Management support and understanding for our business model
What does the future hold for partnerships and InsurTechWe believe that partnering is crucial if we want change to happen InsurTech holds expertise that us incumbents donrsquot and vice versa We believe each stakeholder should concentrate on what they do best and find the right partners so as a team they can innovate intelligently within the insurance market The lsquopartnersrsquo will evolve beyond what we see now new entrants would not necessarily be from the insurance industry We see the team behind the InsurTech evolve to include more and more insurance professionals who are seeking to bring changes to the insurance market and cannot do so within their current role
WORKING TOGETHER HOW PARTNERSHIPS ARE PAVING THE WAY FOR INSURTECHS InsurTech Rising
ldquoWe may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territoriesrdquo Leading the UK and European Partner Engagement at Munich Re Digital Partners Jennyfer Yeung-Williams talks to us about how her team are making an InsurTech success story out of their partnerships
JOIN THE CONVERSATIONINSURTECHRISING
REDEFINING YOUR DIGITAL STRATEGY ndash CRUCIAL LESSONS FOR INSURERS Ralf Dreischmeier
I was asked to kick-off Londonrsquos InsurTech Rising 2017 conference talking about how insurers can refine their digital strategies Below are some of the key points from the session
During the time in which global GDP has doubled the GDP of the technology industry has multiplied by fourteen Corporate IT spending has reached approximately six trillion dollars making technology the third largest economy in the world So why do productivity gains remain stagnant Of course the technology revolution can create a step-change in the insurance industry but only if insurers think about both lsquothe whatrsquo and lsquothe howrsquo not just technology but organisational structure Going digital in silos will not be enoughIn 2005 there were approximately 1400 InsurTech companies and $27 billion in funding In the 12 years since the proliferation of data and analytics has drawn a great deal more attention to the market Today it is increasingly crowded with approximately 4700 companies and $485 billion in fundingIf insurance companies hope to survive in the throng of new talent fresh ideas and diversifying customer demands they must digitalize But if they wish to flourish they must also meet three key challenges speed scale and value
SpeedSpeed is perhaps the issue that large incumbents struggle with most long-running business practices are deeply ingrained at every level Even those incumbents who have progressed with their digitalisation process still take too long to change the way they underwrite Meanwhile InsurTech start-ups who do not come with the baggage of a legacy are able to quickly adapt to customer needs
Scale All major insurers have put in some effort to digitalize but in todayrsquos market a lsquodigital departmentrsquo or lsquodigital labrsquo will not suffice Within the next half-decade digital will be the standard Running 5 of a company like a digital start-up and keeping the rest unchanged does not make an insurer a digital player From PR to marketing every department needs to be digital-ready and working together as a cohesive unit
ValueWith ever-more competition incumbents cannot rest on their laurels satisfied with adding value at the end of the process Insurers need to start looking at uplift revenue and core savings as measurable concrete benefits The whole customer experience needs to be reimagined in a way that makes added-value clear to both company and customer alikeIf incumbents maintain the status quo productivity loss is inevitable To combat this some companies are enacting technological changes whereas others are implementing organizational ones To choose just one of these is to underestimate the challenges the industry faces Fundamentally changing both is essentialInsurers must adapt to meet the challenges of the industryrsquos digital future The customers of today and tomorrow expect nothing less than a fully-digital customer-centric agile approach that responds to their latest needs This change is not unrealistic it has been successfully implemented by countless other industries By meeting the challenges of speed scale and value through multi-dimensional change incumbent insurers can ensure that the future belongs to them
3
The technology revolution can create a step-change in the insurance industry but only if insurers think about both lsquothe whatrsquo and lsquothe howrsquo
EVERY DAY IN INSURANCE IS A JOURNEY OF DISCOVERY InsurTech Rising
Feedback loops data quality ethics and lsquoreinventing insurancersquo are all topics that insurers are finding jumping onto their radar this year At InsurTech Rising London a key point of discussion was how to best implement AI and lay the foundations to become an intelligent insurer
Nikhil Kaithwal group chief analytics officer at Tryg Michael Natusch global head of artificial intelligence at Prudential and Babak Ahmad CEO at insurersai outlined the complex and labour intensive journey most insurers need to take to start the process of including machine learning into an AI analytical layerldquoWe are on a journey with AIrdquo said Kaithwal ldquoa lot of our resources are dedicated to getting the data flow right from our legacy systems There is a lot of validatingrdquoNot only must the data be validated or lsquocleanedrsquo to populate the analytical engines each set of data must be timely and properly labelled with the event a business wants to predict adds NatuschEach process of cleaning and labelling needs to be paired with the correct set of questions before the ldquofeedback looprdquo of machine learning on top of AI can be complete agrees Ahman ldquoEven if you have good data ndash it may not be the right data to answer your questionsrdquo
What can AI unlock for insurersBut what is the purpose of AI and machine learning in insurance Moderator Chris Sandilands partner at Oxbow Partners pressed the panel to give relevant examples ldquoWhat does it unlockrdquo he askedKaithwal pointed to work at Tryg where the insurer is piloting the use of AI in conjunction with its Salesforce-based sales pipeline Not only did the pilot signpost lsquohot leadsrsquo for the sales people to follow the system also paired certain leads with specific sales people who would be best placed to make the deal The results of the pilot saw conversation rates increase by ldquothree to four timesrdquo he said
However questions around inherent biases in AI were also discussed focusing on the ethical implications If AI were to target certain groups of people for example young people
when marketing car insurance as too expensive ndash what is the ethical implications of pricing certain people out of the market asked SandilandsNatusch veered away from questions around ethics and instead focused on creativity He said ldquoThe reason we are pricing people out of market is because we are lacking the creativity to find a solution to include those peoplerdquoQuestions about inherent biases around sex or race which may find themselves embedded in AI was also given a practical answer Both Natusch and Kaitwal confirmed that an AI algorithm is not built and then set to run without monitoring Algos are constantly monitored to look for and correct any inherent biases At Tryg there is an independent body that conducts these regular audits says KaithwalldquoAs soon as we start trading with historical data we will be susceptible to historical biasesrdquo said Natusch Because of this a team running an AI-based model need to be active to combat those historical biases ldquoNo model is just build and then runs All models need to be reviewed ndash not just for ethical reasons but for business reasonsrdquoThe next few years the panel predicts a world where lsquoAIrsquo is no longer on a job title but is instead viewed as a commodity like electricity The end goal commented Natusch is to ultimately ldquoreinventing insurancerdquo
As soon as we start trading with historical data we will be susceptible to historical biases
5
More news More insight
More fintech discoveryIntroducing the new and improved FinTech Futures a digital
publishing platform for the worldwide fintech community
Built on the renowned Banking Technology brand the industryrsquos go-to news resource for over 30 years FinTech Futures provides daily updates in-depth analysis and expert commentary across a broad range of areas
FinTech Futures also incorporates the monthly Banking Technology magazine and Banking Technology Awards ndash an annual event recognising excellence and
innovation in the use of IT in financial services and the people who make it happen
Find out whatrsquos happening ndash visit us online and subscribe to our free daily newsletter
LendTechWealthTech
Contact Alec Gost Email alecgostknect365com | Tel +44 207 017 6122
FinTech_Futures
wwwbankingtechcom
Many proclaimed that 2017 was to be lsquothe year of AIrsquo with a 300 increase in investment in its technologies predicted compared with 2016 In 2018 start-ups with AI at the core of their business in particular will be looking to benefit from this surge in investment capital as they did last year when 550 raised $5 billion in funding While efforts at embedding human intelligence into machines has a long history recent years have seen a rapid evolution of the technologies captured under lsquoartificial intelligencersquo spurred on by decreasing costs in computing power advances in memory capacity and cloud computing and the necessity borne of the generation of evermore quantities of structured and unstructured data Naturally the ability to quickly and automatically process this data and derive actionable insights is creating a lot of excitement across multiple industries yet there remain a number of obstacles to AI adoption many business leaders cite the lack of a defined business case or required skills or the need to first modernize internal data management platforms
You want to automate whatAdvances in AI are also fundamentally challenging assumptions about what is automatable repetitive rules-based processes are no longer the sole focus as AI opens up the possibility of automating activities that require knowledge and experience Predictably this has led to anxiety around the wholesale replacement of employees by machines This is an anxiety that can in part be challenged by a shift in focus from the automation of occupations to the automation of activities where processes are transformed and roles are redefined rather than made obsolete That machines can complement the capabilities of employees affirming the value of expertise while enabling them to dedicate more time to higher-value work will soon become
clear first in sectors such as financial services where automation will be mostly software-based For many then and in contrast to well-reported events in Japan the near future will be defined more so by the arrival of co-bots in the workplace rather than the sudden and dramatic disappearance of colleagues
Whatrsquos so special about insuranceData rich and characterised by routine processes the insurance industry is ripe for transformation using artificial intelligence and its potential cuts across all lines The ability for example to generate a continuous stream of insights through the automated analysis of both structured and unstructured data could provide a clear view of shifting customer needs at a level of granularity not possible in the past However in order to arrive at this point insurers must align themselves with AIrsquos rise from a cultural technological and organisational perspective Carriers will require an integrated and fully digitized environment the capacity to gather and effectively manage data from a variety of sources and a culture of innovation guided by senior leaders attuned to the pace of change and transformational potential of AI in order to succeed In terms of automation systems that simply lsquodorsquo such as RPA have delivered efficiencies in the back office across the insurance industry providing a scalable way to carry out administrative tasks for example in data entry and notifications 2017 saw a greater emphasis placed on mapping a route to systems capable of learning harnessing technologies like machine learning for their capacity to analyse large amounts of data from various sources and feed into both processes that are dynamic and unbound by rules and 2018 is set to follow suit
CO-BOTS NOT ROBOTS - THE NEXT BIG STEP FOR AI IN INSURANCE Oisin Merrins
I was asked to kick-off Londonrsquos InsurTech Rising 2017 conference talking about how insurers can refine their digital strategies Below are some of the key points from the session
7
8
Insurance the co-bots are comingMachine learning is attracting such attention in the insurance industry as well as in other sectors because it dramatically reduces the cost and increases the quality of prediction Considering that tasks can be broken down into four parts (data prediction judgment and action) ML relates to one input of automation and as the technology matures the predictions of humans will increasingly be displaced However employees in the insurance industry will be in a position to complement prediction by exercising their capacity for judgment This means for example that while ML will lead to the automation of standardized underwriting across auto home commercial and life insurance it could also be deployed alongside employees in the identification of emerging risks Data analysis could be combined with human judgment as part of an iterative process that would see feedback and reinforcement given to an ML component tasked with analysing trends and identifying risks the significance and growth of which would then be monitored by employees with sufficient domain expertise
Roles redefinedShifting the focus to the automation of activities rather than occupations throws up some interesting questions should we really be preparing to bid farewell to underwriters or should we instead be thinking about how their roles might be redefined as the predictive power of AI increases Could the role of the underwriter become more sales-oriented given their extensive domain expertise and deep product knowledge While both opportunities and uncertainty abound exploiting technologies like ML will require strong leadership guided by a strategic vision oriented towards becoming a truly data-driven business C-level insurance executives should be encouraged to recognise the increased importance of data insights relative to domain expertise and the potential of artificial intelligence to work alongside and enhance the performance of their companiesrsquo employees
May 9-10 2018Boston
WErsquoRE LOOKING FOR SPEAKERS FOR INSURTECH RISING US
If you want to get your voice heard get in touch with Oisin Merrins on +44 (0) 20 7017 7200 or OisinMerrinsknect365com
How are partnerships beneficial to you at Munich Re Digital PartnersMunich Re Digital Partners are partnering with start-ups and companies looking to improve the way insurance is transacted by innovating the customer journey making insurance more accessible more tailored and making emerging risks insurable these are being done by leveraging new technologies currently available data and newly sourced data Alone we would not be able to achieve a fast and efficient way of doing this thus partnerships are a crucial part of our strategy We are getting through our partnerships access to the latest technology a deeper understanding of the end customers a closer engagement with them and this enables us to continue to be able to better design insurance products to meet the evolving needs and expectations of the public Internally our unit is bringing a different dimension to the existing book of Insurance of Munich Re and are contributing to the long term strategy of keeping up with digitilisation
How is MunichRe Digital Partners leading the wave of InsurTech within the insurance sectorOur unit has been set-up with the sole purpose of working with InsurTechs the start-ups with an insurance product that they wish to distribute in either a b2b b2b2c or b2c concept We are a team of professionals from a mixture of backgrounds including insurance as you would expect but also technology project management and start-ups We thus talk the language of the start-ups we understand their needs and their ambitions and we are set-up to respond to these We may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territories we are helping our partners launch innovative products to use new distribution channels and to experiment on new pricing techniques We enable our partners to achieve this by providing them not only with primary insurance capacity globally but also a tech platform with modular services (mostly back-end operational services) from which our partners can pick and choose to complement and complete their offering to their customers We also provide access to VC funding to the InsurTechs Most importantly we operate at a pace consistent with the start-ups themselves ndash execution is key We believe our offering is unique in the market and we believe such a model provides the InsurTechs with further means to achieve speed to market Additionally we are also teaming up with digital verticals to allow them to access the insurance market
What challenges have you encountered with partnering InsurTech
We didnrsquot expect that there would be such a demand for our support We had initially planned to work with InsurTechs on all insurance lines of business but we had to limit our offering to property and casualty up to now We will look at opportunities on the other lines of business in the near futureOne has to also bear in mind that MRDP is in itself a start-up we have been in operation only since last May and we have officially already announced 8 partnerships We are currently working with circa 20 partners in different lines of business territories and with different requirements It is very demanding but the strength of our team both in term of expertise and team spirit and more importantly the energy that drives the start-ups who we are partnered with helps to make it all worthwhileWe also do sometimes face challenges in the new risks we are bringing into Munich Re Grouprsquos portfolio but there again the cooperation and support we have internally from our Munich Re colleagues is unrivalledWe fortunately do not face the limitations that legacy systems or ldquolegacy thinkingrdquo might bring to start-ups with innovating ideas in that space I can say we are in a different position compared to some incumbentsLastly and more importantly we are fortunate to have the Munich Re Board of Management support and understanding for our business model
What does the future hold for partnerships and InsurTechWe believe that partnering is crucial if we want change to happen InsurTech holds expertise that us incumbents donrsquot and vice versa We believe each stakeholder should concentrate on what they do best and find the right partners so as a team they can innovate intelligently within the insurance market The lsquopartnersrsquo will evolve beyond what we see now new entrants would not necessarily be from the insurance industry We see the team behind the InsurTech evolve to include more and more insurance professionals who are seeking to bring changes to the insurance market and cannot do so within their current role
WORKING TOGETHER HOW PARTNERSHIPS ARE PAVING THE WAY FOR INSURTECHS InsurTech Rising
ldquoWe may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territoriesrdquo Leading the UK and European Partner Engagement at Munich Re Digital Partners Jennyfer Yeung-Williams talks to us about how her team are making an InsurTech success story out of their partnerships
JOIN THE CONVERSATIONINSURTECHRISING
EVERY DAY IN INSURANCE IS A JOURNEY OF DISCOVERY InsurTech Rising
Feedback loops data quality ethics and lsquoreinventing insurancersquo are all topics that insurers are finding jumping onto their radar this year At InsurTech Rising London a key point of discussion was how to best implement AI and lay the foundations to become an intelligent insurer
Nikhil Kaithwal group chief analytics officer at Tryg Michael Natusch global head of artificial intelligence at Prudential and Babak Ahmad CEO at insurersai outlined the complex and labour intensive journey most insurers need to take to start the process of including machine learning into an AI analytical layerldquoWe are on a journey with AIrdquo said Kaithwal ldquoa lot of our resources are dedicated to getting the data flow right from our legacy systems There is a lot of validatingrdquoNot only must the data be validated or lsquocleanedrsquo to populate the analytical engines each set of data must be timely and properly labelled with the event a business wants to predict adds NatuschEach process of cleaning and labelling needs to be paired with the correct set of questions before the ldquofeedback looprdquo of machine learning on top of AI can be complete agrees Ahman ldquoEven if you have good data ndash it may not be the right data to answer your questionsrdquo
What can AI unlock for insurersBut what is the purpose of AI and machine learning in insurance Moderator Chris Sandilands partner at Oxbow Partners pressed the panel to give relevant examples ldquoWhat does it unlockrdquo he askedKaithwal pointed to work at Tryg where the insurer is piloting the use of AI in conjunction with its Salesforce-based sales pipeline Not only did the pilot signpost lsquohot leadsrsquo for the sales people to follow the system also paired certain leads with specific sales people who would be best placed to make the deal The results of the pilot saw conversation rates increase by ldquothree to four timesrdquo he said
However questions around inherent biases in AI were also discussed focusing on the ethical implications If AI were to target certain groups of people for example young people
when marketing car insurance as too expensive ndash what is the ethical implications of pricing certain people out of the market asked SandilandsNatusch veered away from questions around ethics and instead focused on creativity He said ldquoThe reason we are pricing people out of market is because we are lacking the creativity to find a solution to include those peoplerdquoQuestions about inherent biases around sex or race which may find themselves embedded in AI was also given a practical answer Both Natusch and Kaitwal confirmed that an AI algorithm is not built and then set to run without monitoring Algos are constantly monitored to look for and correct any inherent biases At Tryg there is an independent body that conducts these regular audits says KaithwalldquoAs soon as we start trading with historical data we will be susceptible to historical biasesrdquo said Natusch Because of this a team running an AI-based model need to be active to combat those historical biases ldquoNo model is just build and then runs All models need to be reviewed ndash not just for ethical reasons but for business reasonsrdquoThe next few years the panel predicts a world where lsquoAIrsquo is no longer on a job title but is instead viewed as a commodity like electricity The end goal commented Natusch is to ultimately ldquoreinventing insurancerdquo
As soon as we start trading with historical data we will be susceptible to historical biases
5
More news More insight
More fintech discoveryIntroducing the new and improved FinTech Futures a digital
publishing platform for the worldwide fintech community
Built on the renowned Banking Technology brand the industryrsquos go-to news resource for over 30 years FinTech Futures provides daily updates in-depth analysis and expert commentary across a broad range of areas
FinTech Futures also incorporates the monthly Banking Technology magazine and Banking Technology Awards ndash an annual event recognising excellence and
innovation in the use of IT in financial services and the people who make it happen
Find out whatrsquos happening ndash visit us online and subscribe to our free daily newsletter
LendTechWealthTech
Contact Alec Gost Email alecgostknect365com | Tel +44 207 017 6122
FinTech_Futures
wwwbankingtechcom
Many proclaimed that 2017 was to be lsquothe year of AIrsquo with a 300 increase in investment in its technologies predicted compared with 2016 In 2018 start-ups with AI at the core of their business in particular will be looking to benefit from this surge in investment capital as they did last year when 550 raised $5 billion in funding While efforts at embedding human intelligence into machines has a long history recent years have seen a rapid evolution of the technologies captured under lsquoartificial intelligencersquo spurred on by decreasing costs in computing power advances in memory capacity and cloud computing and the necessity borne of the generation of evermore quantities of structured and unstructured data Naturally the ability to quickly and automatically process this data and derive actionable insights is creating a lot of excitement across multiple industries yet there remain a number of obstacles to AI adoption many business leaders cite the lack of a defined business case or required skills or the need to first modernize internal data management platforms
You want to automate whatAdvances in AI are also fundamentally challenging assumptions about what is automatable repetitive rules-based processes are no longer the sole focus as AI opens up the possibility of automating activities that require knowledge and experience Predictably this has led to anxiety around the wholesale replacement of employees by machines This is an anxiety that can in part be challenged by a shift in focus from the automation of occupations to the automation of activities where processes are transformed and roles are redefined rather than made obsolete That machines can complement the capabilities of employees affirming the value of expertise while enabling them to dedicate more time to higher-value work will soon become
clear first in sectors such as financial services where automation will be mostly software-based For many then and in contrast to well-reported events in Japan the near future will be defined more so by the arrival of co-bots in the workplace rather than the sudden and dramatic disappearance of colleagues
Whatrsquos so special about insuranceData rich and characterised by routine processes the insurance industry is ripe for transformation using artificial intelligence and its potential cuts across all lines The ability for example to generate a continuous stream of insights through the automated analysis of both structured and unstructured data could provide a clear view of shifting customer needs at a level of granularity not possible in the past However in order to arrive at this point insurers must align themselves with AIrsquos rise from a cultural technological and organisational perspective Carriers will require an integrated and fully digitized environment the capacity to gather and effectively manage data from a variety of sources and a culture of innovation guided by senior leaders attuned to the pace of change and transformational potential of AI in order to succeed In terms of automation systems that simply lsquodorsquo such as RPA have delivered efficiencies in the back office across the insurance industry providing a scalable way to carry out administrative tasks for example in data entry and notifications 2017 saw a greater emphasis placed on mapping a route to systems capable of learning harnessing technologies like machine learning for their capacity to analyse large amounts of data from various sources and feed into both processes that are dynamic and unbound by rules and 2018 is set to follow suit
CO-BOTS NOT ROBOTS - THE NEXT BIG STEP FOR AI IN INSURANCE Oisin Merrins
I was asked to kick-off Londonrsquos InsurTech Rising 2017 conference talking about how insurers can refine their digital strategies Below are some of the key points from the session
7
8
Insurance the co-bots are comingMachine learning is attracting such attention in the insurance industry as well as in other sectors because it dramatically reduces the cost and increases the quality of prediction Considering that tasks can be broken down into four parts (data prediction judgment and action) ML relates to one input of automation and as the technology matures the predictions of humans will increasingly be displaced However employees in the insurance industry will be in a position to complement prediction by exercising their capacity for judgment This means for example that while ML will lead to the automation of standardized underwriting across auto home commercial and life insurance it could also be deployed alongside employees in the identification of emerging risks Data analysis could be combined with human judgment as part of an iterative process that would see feedback and reinforcement given to an ML component tasked with analysing trends and identifying risks the significance and growth of which would then be monitored by employees with sufficient domain expertise
Roles redefinedShifting the focus to the automation of activities rather than occupations throws up some interesting questions should we really be preparing to bid farewell to underwriters or should we instead be thinking about how their roles might be redefined as the predictive power of AI increases Could the role of the underwriter become more sales-oriented given their extensive domain expertise and deep product knowledge While both opportunities and uncertainty abound exploiting technologies like ML will require strong leadership guided by a strategic vision oriented towards becoming a truly data-driven business C-level insurance executives should be encouraged to recognise the increased importance of data insights relative to domain expertise and the potential of artificial intelligence to work alongside and enhance the performance of their companiesrsquo employees
May 9-10 2018Boston
WErsquoRE LOOKING FOR SPEAKERS FOR INSURTECH RISING US
If you want to get your voice heard get in touch with Oisin Merrins on +44 (0) 20 7017 7200 or OisinMerrinsknect365com
How are partnerships beneficial to you at Munich Re Digital PartnersMunich Re Digital Partners are partnering with start-ups and companies looking to improve the way insurance is transacted by innovating the customer journey making insurance more accessible more tailored and making emerging risks insurable these are being done by leveraging new technologies currently available data and newly sourced data Alone we would not be able to achieve a fast and efficient way of doing this thus partnerships are a crucial part of our strategy We are getting through our partnerships access to the latest technology a deeper understanding of the end customers a closer engagement with them and this enables us to continue to be able to better design insurance products to meet the evolving needs and expectations of the public Internally our unit is bringing a different dimension to the existing book of Insurance of Munich Re and are contributing to the long term strategy of keeping up with digitilisation
How is MunichRe Digital Partners leading the wave of InsurTech within the insurance sectorOur unit has been set-up with the sole purpose of working with InsurTechs the start-ups with an insurance product that they wish to distribute in either a b2b b2b2c or b2c concept We are a team of professionals from a mixture of backgrounds including insurance as you would expect but also technology project management and start-ups We thus talk the language of the start-ups we understand their needs and their ambitions and we are set-up to respond to these We may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territories we are helping our partners launch innovative products to use new distribution channels and to experiment on new pricing techniques We enable our partners to achieve this by providing them not only with primary insurance capacity globally but also a tech platform with modular services (mostly back-end operational services) from which our partners can pick and choose to complement and complete their offering to their customers We also provide access to VC funding to the InsurTechs Most importantly we operate at a pace consistent with the start-ups themselves ndash execution is key We believe our offering is unique in the market and we believe such a model provides the InsurTechs with further means to achieve speed to market Additionally we are also teaming up with digital verticals to allow them to access the insurance market
What challenges have you encountered with partnering InsurTech
We didnrsquot expect that there would be such a demand for our support We had initially planned to work with InsurTechs on all insurance lines of business but we had to limit our offering to property and casualty up to now We will look at opportunities on the other lines of business in the near futureOne has to also bear in mind that MRDP is in itself a start-up we have been in operation only since last May and we have officially already announced 8 partnerships We are currently working with circa 20 partners in different lines of business territories and with different requirements It is very demanding but the strength of our team both in term of expertise and team spirit and more importantly the energy that drives the start-ups who we are partnered with helps to make it all worthwhileWe also do sometimes face challenges in the new risks we are bringing into Munich Re Grouprsquos portfolio but there again the cooperation and support we have internally from our Munich Re colleagues is unrivalledWe fortunately do not face the limitations that legacy systems or ldquolegacy thinkingrdquo might bring to start-ups with innovating ideas in that space I can say we are in a different position compared to some incumbentsLastly and more importantly we are fortunate to have the Munich Re Board of Management support and understanding for our business model
What does the future hold for partnerships and InsurTechWe believe that partnering is crucial if we want change to happen InsurTech holds expertise that us incumbents donrsquot and vice versa We believe each stakeholder should concentrate on what they do best and find the right partners so as a team they can innovate intelligently within the insurance market The lsquopartnersrsquo will evolve beyond what we see now new entrants would not necessarily be from the insurance industry We see the team behind the InsurTech evolve to include more and more insurance professionals who are seeking to bring changes to the insurance market and cannot do so within their current role
WORKING TOGETHER HOW PARTNERSHIPS ARE PAVING THE WAY FOR INSURTECHS InsurTech Rising
ldquoWe may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territoriesrdquo Leading the UK and European Partner Engagement at Munich Re Digital Partners Jennyfer Yeung-Williams talks to us about how her team are making an InsurTech success story out of their partnerships
JOIN THE CONVERSATIONINSURTECHRISING
5
More news More insight
More fintech discoveryIntroducing the new and improved FinTech Futures a digital
publishing platform for the worldwide fintech community
Built on the renowned Banking Technology brand the industryrsquos go-to news resource for over 30 years FinTech Futures provides daily updates in-depth analysis and expert commentary across a broad range of areas
FinTech Futures also incorporates the monthly Banking Technology magazine and Banking Technology Awards ndash an annual event recognising excellence and
innovation in the use of IT in financial services and the people who make it happen
Find out whatrsquos happening ndash visit us online and subscribe to our free daily newsletter
LendTechWealthTech
Contact Alec Gost Email alecgostknect365com | Tel +44 207 017 6122
FinTech_Futures
wwwbankingtechcom
Many proclaimed that 2017 was to be lsquothe year of AIrsquo with a 300 increase in investment in its technologies predicted compared with 2016 In 2018 start-ups with AI at the core of their business in particular will be looking to benefit from this surge in investment capital as they did last year when 550 raised $5 billion in funding While efforts at embedding human intelligence into machines has a long history recent years have seen a rapid evolution of the technologies captured under lsquoartificial intelligencersquo spurred on by decreasing costs in computing power advances in memory capacity and cloud computing and the necessity borne of the generation of evermore quantities of structured and unstructured data Naturally the ability to quickly and automatically process this data and derive actionable insights is creating a lot of excitement across multiple industries yet there remain a number of obstacles to AI adoption many business leaders cite the lack of a defined business case or required skills or the need to first modernize internal data management platforms
You want to automate whatAdvances in AI are also fundamentally challenging assumptions about what is automatable repetitive rules-based processes are no longer the sole focus as AI opens up the possibility of automating activities that require knowledge and experience Predictably this has led to anxiety around the wholesale replacement of employees by machines This is an anxiety that can in part be challenged by a shift in focus from the automation of occupations to the automation of activities where processes are transformed and roles are redefined rather than made obsolete That machines can complement the capabilities of employees affirming the value of expertise while enabling them to dedicate more time to higher-value work will soon become
clear first in sectors such as financial services where automation will be mostly software-based For many then and in contrast to well-reported events in Japan the near future will be defined more so by the arrival of co-bots in the workplace rather than the sudden and dramatic disappearance of colleagues
Whatrsquos so special about insuranceData rich and characterised by routine processes the insurance industry is ripe for transformation using artificial intelligence and its potential cuts across all lines The ability for example to generate a continuous stream of insights through the automated analysis of both structured and unstructured data could provide a clear view of shifting customer needs at a level of granularity not possible in the past However in order to arrive at this point insurers must align themselves with AIrsquos rise from a cultural technological and organisational perspective Carriers will require an integrated and fully digitized environment the capacity to gather and effectively manage data from a variety of sources and a culture of innovation guided by senior leaders attuned to the pace of change and transformational potential of AI in order to succeed In terms of automation systems that simply lsquodorsquo such as RPA have delivered efficiencies in the back office across the insurance industry providing a scalable way to carry out administrative tasks for example in data entry and notifications 2017 saw a greater emphasis placed on mapping a route to systems capable of learning harnessing technologies like machine learning for their capacity to analyse large amounts of data from various sources and feed into both processes that are dynamic and unbound by rules and 2018 is set to follow suit
CO-BOTS NOT ROBOTS - THE NEXT BIG STEP FOR AI IN INSURANCE Oisin Merrins
I was asked to kick-off Londonrsquos InsurTech Rising 2017 conference talking about how insurers can refine their digital strategies Below are some of the key points from the session
7
8
Insurance the co-bots are comingMachine learning is attracting such attention in the insurance industry as well as in other sectors because it dramatically reduces the cost and increases the quality of prediction Considering that tasks can be broken down into four parts (data prediction judgment and action) ML relates to one input of automation and as the technology matures the predictions of humans will increasingly be displaced However employees in the insurance industry will be in a position to complement prediction by exercising their capacity for judgment This means for example that while ML will lead to the automation of standardized underwriting across auto home commercial and life insurance it could also be deployed alongside employees in the identification of emerging risks Data analysis could be combined with human judgment as part of an iterative process that would see feedback and reinforcement given to an ML component tasked with analysing trends and identifying risks the significance and growth of which would then be monitored by employees with sufficient domain expertise
Roles redefinedShifting the focus to the automation of activities rather than occupations throws up some interesting questions should we really be preparing to bid farewell to underwriters or should we instead be thinking about how their roles might be redefined as the predictive power of AI increases Could the role of the underwriter become more sales-oriented given their extensive domain expertise and deep product knowledge While both opportunities and uncertainty abound exploiting technologies like ML will require strong leadership guided by a strategic vision oriented towards becoming a truly data-driven business C-level insurance executives should be encouraged to recognise the increased importance of data insights relative to domain expertise and the potential of artificial intelligence to work alongside and enhance the performance of their companiesrsquo employees
May 9-10 2018Boston
WErsquoRE LOOKING FOR SPEAKERS FOR INSURTECH RISING US
If you want to get your voice heard get in touch with Oisin Merrins on +44 (0) 20 7017 7200 or OisinMerrinsknect365com
How are partnerships beneficial to you at Munich Re Digital PartnersMunich Re Digital Partners are partnering with start-ups and companies looking to improve the way insurance is transacted by innovating the customer journey making insurance more accessible more tailored and making emerging risks insurable these are being done by leveraging new technologies currently available data and newly sourced data Alone we would not be able to achieve a fast and efficient way of doing this thus partnerships are a crucial part of our strategy We are getting through our partnerships access to the latest technology a deeper understanding of the end customers a closer engagement with them and this enables us to continue to be able to better design insurance products to meet the evolving needs and expectations of the public Internally our unit is bringing a different dimension to the existing book of Insurance of Munich Re and are contributing to the long term strategy of keeping up with digitilisation
How is MunichRe Digital Partners leading the wave of InsurTech within the insurance sectorOur unit has been set-up with the sole purpose of working with InsurTechs the start-ups with an insurance product that they wish to distribute in either a b2b b2b2c or b2c concept We are a team of professionals from a mixture of backgrounds including insurance as you would expect but also technology project management and start-ups We thus talk the language of the start-ups we understand their needs and their ambitions and we are set-up to respond to these We may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territories we are helping our partners launch innovative products to use new distribution channels and to experiment on new pricing techniques We enable our partners to achieve this by providing them not only with primary insurance capacity globally but also a tech platform with modular services (mostly back-end operational services) from which our partners can pick and choose to complement and complete their offering to their customers We also provide access to VC funding to the InsurTechs Most importantly we operate at a pace consistent with the start-ups themselves ndash execution is key We believe our offering is unique in the market and we believe such a model provides the InsurTechs with further means to achieve speed to market Additionally we are also teaming up with digital verticals to allow them to access the insurance market
What challenges have you encountered with partnering InsurTech
We didnrsquot expect that there would be such a demand for our support We had initially planned to work with InsurTechs on all insurance lines of business but we had to limit our offering to property and casualty up to now We will look at opportunities on the other lines of business in the near futureOne has to also bear in mind that MRDP is in itself a start-up we have been in operation only since last May and we have officially already announced 8 partnerships We are currently working with circa 20 partners in different lines of business territories and with different requirements It is very demanding but the strength of our team both in term of expertise and team spirit and more importantly the energy that drives the start-ups who we are partnered with helps to make it all worthwhileWe also do sometimes face challenges in the new risks we are bringing into Munich Re Grouprsquos portfolio but there again the cooperation and support we have internally from our Munich Re colleagues is unrivalledWe fortunately do not face the limitations that legacy systems or ldquolegacy thinkingrdquo might bring to start-ups with innovating ideas in that space I can say we are in a different position compared to some incumbentsLastly and more importantly we are fortunate to have the Munich Re Board of Management support and understanding for our business model
What does the future hold for partnerships and InsurTechWe believe that partnering is crucial if we want change to happen InsurTech holds expertise that us incumbents donrsquot and vice versa We believe each stakeholder should concentrate on what they do best and find the right partners so as a team they can innovate intelligently within the insurance market The lsquopartnersrsquo will evolve beyond what we see now new entrants would not necessarily be from the insurance industry We see the team behind the InsurTech evolve to include more and more insurance professionals who are seeking to bring changes to the insurance market and cannot do so within their current role
WORKING TOGETHER HOW PARTNERSHIPS ARE PAVING THE WAY FOR INSURTECHS InsurTech Rising
ldquoWe may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territoriesrdquo Leading the UK and European Partner Engagement at Munich Re Digital Partners Jennyfer Yeung-Williams talks to us about how her team are making an InsurTech success story out of their partnerships
JOIN THE CONVERSATIONINSURTECHRISING
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More fintech discoveryIntroducing the new and improved FinTech Futures a digital
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FinTech_Futures
wwwbankingtechcom
Many proclaimed that 2017 was to be lsquothe year of AIrsquo with a 300 increase in investment in its technologies predicted compared with 2016 In 2018 start-ups with AI at the core of their business in particular will be looking to benefit from this surge in investment capital as they did last year when 550 raised $5 billion in funding While efforts at embedding human intelligence into machines has a long history recent years have seen a rapid evolution of the technologies captured under lsquoartificial intelligencersquo spurred on by decreasing costs in computing power advances in memory capacity and cloud computing and the necessity borne of the generation of evermore quantities of structured and unstructured data Naturally the ability to quickly and automatically process this data and derive actionable insights is creating a lot of excitement across multiple industries yet there remain a number of obstacles to AI adoption many business leaders cite the lack of a defined business case or required skills or the need to first modernize internal data management platforms
You want to automate whatAdvances in AI are also fundamentally challenging assumptions about what is automatable repetitive rules-based processes are no longer the sole focus as AI opens up the possibility of automating activities that require knowledge and experience Predictably this has led to anxiety around the wholesale replacement of employees by machines This is an anxiety that can in part be challenged by a shift in focus from the automation of occupations to the automation of activities where processes are transformed and roles are redefined rather than made obsolete That machines can complement the capabilities of employees affirming the value of expertise while enabling them to dedicate more time to higher-value work will soon become
clear first in sectors such as financial services where automation will be mostly software-based For many then and in contrast to well-reported events in Japan the near future will be defined more so by the arrival of co-bots in the workplace rather than the sudden and dramatic disappearance of colleagues
Whatrsquos so special about insuranceData rich and characterised by routine processes the insurance industry is ripe for transformation using artificial intelligence and its potential cuts across all lines The ability for example to generate a continuous stream of insights through the automated analysis of both structured and unstructured data could provide a clear view of shifting customer needs at a level of granularity not possible in the past However in order to arrive at this point insurers must align themselves with AIrsquos rise from a cultural technological and organisational perspective Carriers will require an integrated and fully digitized environment the capacity to gather and effectively manage data from a variety of sources and a culture of innovation guided by senior leaders attuned to the pace of change and transformational potential of AI in order to succeed In terms of automation systems that simply lsquodorsquo such as RPA have delivered efficiencies in the back office across the insurance industry providing a scalable way to carry out administrative tasks for example in data entry and notifications 2017 saw a greater emphasis placed on mapping a route to systems capable of learning harnessing technologies like machine learning for their capacity to analyse large amounts of data from various sources and feed into both processes that are dynamic and unbound by rules and 2018 is set to follow suit
CO-BOTS NOT ROBOTS - THE NEXT BIG STEP FOR AI IN INSURANCE Oisin Merrins
I was asked to kick-off Londonrsquos InsurTech Rising 2017 conference talking about how insurers can refine their digital strategies Below are some of the key points from the session
7
8
Insurance the co-bots are comingMachine learning is attracting such attention in the insurance industry as well as in other sectors because it dramatically reduces the cost and increases the quality of prediction Considering that tasks can be broken down into four parts (data prediction judgment and action) ML relates to one input of automation and as the technology matures the predictions of humans will increasingly be displaced However employees in the insurance industry will be in a position to complement prediction by exercising their capacity for judgment This means for example that while ML will lead to the automation of standardized underwriting across auto home commercial and life insurance it could also be deployed alongside employees in the identification of emerging risks Data analysis could be combined with human judgment as part of an iterative process that would see feedback and reinforcement given to an ML component tasked with analysing trends and identifying risks the significance and growth of which would then be monitored by employees with sufficient domain expertise
Roles redefinedShifting the focus to the automation of activities rather than occupations throws up some interesting questions should we really be preparing to bid farewell to underwriters or should we instead be thinking about how their roles might be redefined as the predictive power of AI increases Could the role of the underwriter become more sales-oriented given their extensive domain expertise and deep product knowledge While both opportunities and uncertainty abound exploiting technologies like ML will require strong leadership guided by a strategic vision oriented towards becoming a truly data-driven business C-level insurance executives should be encouraged to recognise the increased importance of data insights relative to domain expertise and the potential of artificial intelligence to work alongside and enhance the performance of their companiesrsquo employees
May 9-10 2018Boston
WErsquoRE LOOKING FOR SPEAKERS FOR INSURTECH RISING US
If you want to get your voice heard get in touch with Oisin Merrins on +44 (0) 20 7017 7200 or OisinMerrinsknect365com
How are partnerships beneficial to you at Munich Re Digital PartnersMunich Re Digital Partners are partnering with start-ups and companies looking to improve the way insurance is transacted by innovating the customer journey making insurance more accessible more tailored and making emerging risks insurable these are being done by leveraging new technologies currently available data and newly sourced data Alone we would not be able to achieve a fast and efficient way of doing this thus partnerships are a crucial part of our strategy We are getting through our partnerships access to the latest technology a deeper understanding of the end customers a closer engagement with them and this enables us to continue to be able to better design insurance products to meet the evolving needs and expectations of the public Internally our unit is bringing a different dimension to the existing book of Insurance of Munich Re and are contributing to the long term strategy of keeping up with digitilisation
How is MunichRe Digital Partners leading the wave of InsurTech within the insurance sectorOur unit has been set-up with the sole purpose of working with InsurTechs the start-ups with an insurance product that they wish to distribute in either a b2b b2b2c or b2c concept We are a team of professionals from a mixture of backgrounds including insurance as you would expect but also technology project management and start-ups We thus talk the language of the start-ups we understand their needs and their ambitions and we are set-up to respond to these We may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territories we are helping our partners launch innovative products to use new distribution channels and to experiment on new pricing techniques We enable our partners to achieve this by providing them not only with primary insurance capacity globally but also a tech platform with modular services (mostly back-end operational services) from which our partners can pick and choose to complement and complete their offering to their customers We also provide access to VC funding to the InsurTechs Most importantly we operate at a pace consistent with the start-ups themselves ndash execution is key We believe our offering is unique in the market and we believe such a model provides the InsurTechs with further means to achieve speed to market Additionally we are also teaming up with digital verticals to allow them to access the insurance market
What challenges have you encountered with partnering InsurTech
We didnrsquot expect that there would be such a demand for our support We had initially planned to work with InsurTechs on all insurance lines of business but we had to limit our offering to property and casualty up to now We will look at opportunities on the other lines of business in the near futureOne has to also bear in mind that MRDP is in itself a start-up we have been in operation only since last May and we have officially already announced 8 partnerships We are currently working with circa 20 partners in different lines of business territories and with different requirements It is very demanding but the strength of our team both in term of expertise and team spirit and more importantly the energy that drives the start-ups who we are partnered with helps to make it all worthwhileWe also do sometimes face challenges in the new risks we are bringing into Munich Re Grouprsquos portfolio but there again the cooperation and support we have internally from our Munich Re colleagues is unrivalledWe fortunately do not face the limitations that legacy systems or ldquolegacy thinkingrdquo might bring to start-ups with innovating ideas in that space I can say we are in a different position compared to some incumbentsLastly and more importantly we are fortunate to have the Munich Re Board of Management support and understanding for our business model
What does the future hold for partnerships and InsurTechWe believe that partnering is crucial if we want change to happen InsurTech holds expertise that us incumbents donrsquot and vice versa We believe each stakeholder should concentrate on what they do best and find the right partners so as a team they can innovate intelligently within the insurance market The lsquopartnersrsquo will evolve beyond what we see now new entrants would not necessarily be from the insurance industry We see the team behind the InsurTech evolve to include more and more insurance professionals who are seeking to bring changes to the insurance market and cannot do so within their current role
WORKING TOGETHER HOW PARTNERSHIPS ARE PAVING THE WAY FOR INSURTECHS InsurTech Rising
ldquoWe may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territoriesrdquo Leading the UK and European Partner Engagement at Munich Re Digital Partners Jennyfer Yeung-Williams talks to us about how her team are making an InsurTech success story out of their partnerships
JOIN THE CONVERSATIONINSURTECHRISING
Many proclaimed that 2017 was to be lsquothe year of AIrsquo with a 300 increase in investment in its technologies predicted compared with 2016 In 2018 start-ups with AI at the core of their business in particular will be looking to benefit from this surge in investment capital as they did last year when 550 raised $5 billion in funding While efforts at embedding human intelligence into machines has a long history recent years have seen a rapid evolution of the technologies captured under lsquoartificial intelligencersquo spurred on by decreasing costs in computing power advances in memory capacity and cloud computing and the necessity borne of the generation of evermore quantities of structured and unstructured data Naturally the ability to quickly and automatically process this data and derive actionable insights is creating a lot of excitement across multiple industries yet there remain a number of obstacles to AI adoption many business leaders cite the lack of a defined business case or required skills or the need to first modernize internal data management platforms
You want to automate whatAdvances in AI are also fundamentally challenging assumptions about what is automatable repetitive rules-based processes are no longer the sole focus as AI opens up the possibility of automating activities that require knowledge and experience Predictably this has led to anxiety around the wholesale replacement of employees by machines This is an anxiety that can in part be challenged by a shift in focus from the automation of occupations to the automation of activities where processes are transformed and roles are redefined rather than made obsolete That machines can complement the capabilities of employees affirming the value of expertise while enabling them to dedicate more time to higher-value work will soon become
clear first in sectors such as financial services where automation will be mostly software-based For many then and in contrast to well-reported events in Japan the near future will be defined more so by the arrival of co-bots in the workplace rather than the sudden and dramatic disappearance of colleagues
Whatrsquos so special about insuranceData rich and characterised by routine processes the insurance industry is ripe for transformation using artificial intelligence and its potential cuts across all lines The ability for example to generate a continuous stream of insights through the automated analysis of both structured and unstructured data could provide a clear view of shifting customer needs at a level of granularity not possible in the past However in order to arrive at this point insurers must align themselves with AIrsquos rise from a cultural technological and organisational perspective Carriers will require an integrated and fully digitized environment the capacity to gather and effectively manage data from a variety of sources and a culture of innovation guided by senior leaders attuned to the pace of change and transformational potential of AI in order to succeed In terms of automation systems that simply lsquodorsquo such as RPA have delivered efficiencies in the back office across the insurance industry providing a scalable way to carry out administrative tasks for example in data entry and notifications 2017 saw a greater emphasis placed on mapping a route to systems capable of learning harnessing technologies like machine learning for their capacity to analyse large amounts of data from various sources and feed into both processes that are dynamic and unbound by rules and 2018 is set to follow suit
CO-BOTS NOT ROBOTS - THE NEXT BIG STEP FOR AI IN INSURANCE Oisin Merrins
I was asked to kick-off Londonrsquos InsurTech Rising 2017 conference talking about how insurers can refine their digital strategies Below are some of the key points from the session
7
8
Insurance the co-bots are comingMachine learning is attracting such attention in the insurance industry as well as in other sectors because it dramatically reduces the cost and increases the quality of prediction Considering that tasks can be broken down into four parts (data prediction judgment and action) ML relates to one input of automation and as the technology matures the predictions of humans will increasingly be displaced However employees in the insurance industry will be in a position to complement prediction by exercising their capacity for judgment This means for example that while ML will lead to the automation of standardized underwriting across auto home commercial and life insurance it could also be deployed alongside employees in the identification of emerging risks Data analysis could be combined with human judgment as part of an iterative process that would see feedback and reinforcement given to an ML component tasked with analysing trends and identifying risks the significance and growth of which would then be monitored by employees with sufficient domain expertise
Roles redefinedShifting the focus to the automation of activities rather than occupations throws up some interesting questions should we really be preparing to bid farewell to underwriters or should we instead be thinking about how their roles might be redefined as the predictive power of AI increases Could the role of the underwriter become more sales-oriented given their extensive domain expertise and deep product knowledge While both opportunities and uncertainty abound exploiting technologies like ML will require strong leadership guided by a strategic vision oriented towards becoming a truly data-driven business C-level insurance executives should be encouraged to recognise the increased importance of data insights relative to domain expertise and the potential of artificial intelligence to work alongside and enhance the performance of their companiesrsquo employees
May 9-10 2018Boston
WErsquoRE LOOKING FOR SPEAKERS FOR INSURTECH RISING US
If you want to get your voice heard get in touch with Oisin Merrins on +44 (0) 20 7017 7200 or OisinMerrinsknect365com
How are partnerships beneficial to you at Munich Re Digital PartnersMunich Re Digital Partners are partnering with start-ups and companies looking to improve the way insurance is transacted by innovating the customer journey making insurance more accessible more tailored and making emerging risks insurable these are being done by leveraging new technologies currently available data and newly sourced data Alone we would not be able to achieve a fast and efficient way of doing this thus partnerships are a crucial part of our strategy We are getting through our partnerships access to the latest technology a deeper understanding of the end customers a closer engagement with them and this enables us to continue to be able to better design insurance products to meet the evolving needs and expectations of the public Internally our unit is bringing a different dimension to the existing book of Insurance of Munich Re and are contributing to the long term strategy of keeping up with digitilisation
How is MunichRe Digital Partners leading the wave of InsurTech within the insurance sectorOur unit has been set-up with the sole purpose of working with InsurTechs the start-ups with an insurance product that they wish to distribute in either a b2b b2b2c or b2c concept We are a team of professionals from a mixture of backgrounds including insurance as you would expect but also technology project management and start-ups We thus talk the language of the start-ups we understand their needs and their ambitions and we are set-up to respond to these We may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territories we are helping our partners launch innovative products to use new distribution channels and to experiment on new pricing techniques We enable our partners to achieve this by providing them not only with primary insurance capacity globally but also a tech platform with modular services (mostly back-end operational services) from which our partners can pick and choose to complement and complete their offering to their customers We also provide access to VC funding to the InsurTechs Most importantly we operate at a pace consistent with the start-ups themselves ndash execution is key We believe our offering is unique in the market and we believe such a model provides the InsurTechs with further means to achieve speed to market Additionally we are also teaming up with digital verticals to allow them to access the insurance market
What challenges have you encountered with partnering InsurTech
We didnrsquot expect that there would be such a demand for our support We had initially planned to work with InsurTechs on all insurance lines of business but we had to limit our offering to property and casualty up to now We will look at opportunities on the other lines of business in the near futureOne has to also bear in mind that MRDP is in itself a start-up we have been in operation only since last May and we have officially already announced 8 partnerships We are currently working with circa 20 partners in different lines of business territories and with different requirements It is very demanding but the strength of our team both in term of expertise and team spirit and more importantly the energy that drives the start-ups who we are partnered with helps to make it all worthwhileWe also do sometimes face challenges in the new risks we are bringing into Munich Re Grouprsquos portfolio but there again the cooperation and support we have internally from our Munich Re colleagues is unrivalledWe fortunately do not face the limitations that legacy systems or ldquolegacy thinkingrdquo might bring to start-ups with innovating ideas in that space I can say we are in a different position compared to some incumbentsLastly and more importantly we are fortunate to have the Munich Re Board of Management support and understanding for our business model
What does the future hold for partnerships and InsurTechWe believe that partnering is crucial if we want change to happen InsurTech holds expertise that us incumbents donrsquot and vice versa We believe each stakeholder should concentrate on what they do best and find the right partners so as a team they can innovate intelligently within the insurance market The lsquopartnersrsquo will evolve beyond what we see now new entrants would not necessarily be from the insurance industry We see the team behind the InsurTech evolve to include more and more insurance professionals who are seeking to bring changes to the insurance market and cannot do so within their current role
WORKING TOGETHER HOW PARTNERSHIPS ARE PAVING THE WAY FOR INSURTECHS InsurTech Rising
ldquoWe may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territoriesrdquo Leading the UK and European Partner Engagement at Munich Re Digital Partners Jennyfer Yeung-Williams talks to us about how her team are making an InsurTech success story out of their partnerships
JOIN THE CONVERSATIONINSURTECHRISING
8
Insurance the co-bots are comingMachine learning is attracting such attention in the insurance industry as well as in other sectors because it dramatically reduces the cost and increases the quality of prediction Considering that tasks can be broken down into four parts (data prediction judgment and action) ML relates to one input of automation and as the technology matures the predictions of humans will increasingly be displaced However employees in the insurance industry will be in a position to complement prediction by exercising their capacity for judgment This means for example that while ML will lead to the automation of standardized underwriting across auto home commercial and life insurance it could also be deployed alongside employees in the identification of emerging risks Data analysis could be combined with human judgment as part of an iterative process that would see feedback and reinforcement given to an ML component tasked with analysing trends and identifying risks the significance and growth of which would then be monitored by employees with sufficient domain expertise
Roles redefinedShifting the focus to the automation of activities rather than occupations throws up some interesting questions should we really be preparing to bid farewell to underwriters or should we instead be thinking about how their roles might be redefined as the predictive power of AI increases Could the role of the underwriter become more sales-oriented given their extensive domain expertise and deep product knowledge While both opportunities and uncertainty abound exploiting technologies like ML will require strong leadership guided by a strategic vision oriented towards becoming a truly data-driven business C-level insurance executives should be encouraged to recognise the increased importance of data insights relative to domain expertise and the potential of artificial intelligence to work alongside and enhance the performance of their companiesrsquo employees
May 9-10 2018Boston
WErsquoRE LOOKING FOR SPEAKERS FOR INSURTECH RISING US
If you want to get your voice heard get in touch with Oisin Merrins on +44 (0) 20 7017 7200 or OisinMerrinsknect365com
How are partnerships beneficial to you at Munich Re Digital PartnersMunich Re Digital Partners are partnering with start-ups and companies looking to improve the way insurance is transacted by innovating the customer journey making insurance more accessible more tailored and making emerging risks insurable these are being done by leveraging new technologies currently available data and newly sourced data Alone we would not be able to achieve a fast and efficient way of doing this thus partnerships are a crucial part of our strategy We are getting through our partnerships access to the latest technology a deeper understanding of the end customers a closer engagement with them and this enables us to continue to be able to better design insurance products to meet the evolving needs and expectations of the public Internally our unit is bringing a different dimension to the existing book of Insurance of Munich Re and are contributing to the long term strategy of keeping up with digitilisation
How is MunichRe Digital Partners leading the wave of InsurTech within the insurance sectorOur unit has been set-up with the sole purpose of working with InsurTechs the start-ups with an insurance product that they wish to distribute in either a b2b b2b2c or b2c concept We are a team of professionals from a mixture of backgrounds including insurance as you would expect but also technology project management and start-ups We thus talk the language of the start-ups we understand their needs and their ambitions and we are set-up to respond to these We may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territories we are helping our partners launch innovative products to use new distribution channels and to experiment on new pricing techniques We enable our partners to achieve this by providing them not only with primary insurance capacity globally but also a tech platform with modular services (mostly back-end operational services) from which our partners can pick and choose to complement and complete their offering to their customers We also provide access to VC funding to the InsurTechs Most importantly we operate at a pace consistent with the start-ups themselves ndash execution is key We believe our offering is unique in the market and we believe such a model provides the InsurTechs with further means to achieve speed to market Additionally we are also teaming up with digital verticals to allow them to access the insurance market
What challenges have you encountered with partnering InsurTech
We didnrsquot expect that there would be such a demand for our support We had initially planned to work with InsurTechs on all insurance lines of business but we had to limit our offering to property and casualty up to now We will look at opportunities on the other lines of business in the near futureOne has to also bear in mind that MRDP is in itself a start-up we have been in operation only since last May and we have officially already announced 8 partnerships We are currently working with circa 20 partners in different lines of business territories and with different requirements It is very demanding but the strength of our team both in term of expertise and team spirit and more importantly the energy that drives the start-ups who we are partnered with helps to make it all worthwhileWe also do sometimes face challenges in the new risks we are bringing into Munich Re Grouprsquos portfolio but there again the cooperation and support we have internally from our Munich Re colleagues is unrivalledWe fortunately do not face the limitations that legacy systems or ldquolegacy thinkingrdquo might bring to start-ups with innovating ideas in that space I can say we are in a different position compared to some incumbentsLastly and more importantly we are fortunate to have the Munich Re Board of Management support and understanding for our business model
What does the future hold for partnerships and InsurTechWe believe that partnering is crucial if we want change to happen InsurTech holds expertise that us incumbents donrsquot and vice versa We believe each stakeholder should concentrate on what they do best and find the right partners so as a team they can innovate intelligently within the insurance market The lsquopartnersrsquo will evolve beyond what we see now new entrants would not necessarily be from the insurance industry We see the team behind the InsurTech evolve to include more and more insurance professionals who are seeking to bring changes to the insurance market and cannot do so within their current role
WORKING TOGETHER HOW PARTNERSHIPS ARE PAVING THE WAY FOR INSURTECHS InsurTech Rising
ldquoWe may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territoriesrdquo Leading the UK and European Partner Engagement at Munich Re Digital Partners Jennyfer Yeung-Williams talks to us about how her team are making an InsurTech success story out of their partnerships
JOIN THE CONVERSATIONINSURTECHRISING
How are partnerships beneficial to you at Munich Re Digital PartnersMunich Re Digital Partners are partnering with start-ups and companies looking to improve the way insurance is transacted by innovating the customer journey making insurance more accessible more tailored and making emerging risks insurable these are being done by leveraging new technologies currently available data and newly sourced data Alone we would not be able to achieve a fast and efficient way of doing this thus partnerships are a crucial part of our strategy We are getting through our partnerships access to the latest technology a deeper understanding of the end customers a closer engagement with them and this enables us to continue to be able to better design insurance products to meet the evolving needs and expectations of the public Internally our unit is bringing a different dimension to the existing book of Insurance of Munich Re and are contributing to the long term strategy of keeping up with digitilisation
How is MunichRe Digital Partners leading the wave of InsurTech within the insurance sectorOur unit has been set-up with the sole purpose of working with InsurTechs the start-ups with an insurance product that they wish to distribute in either a b2b b2b2c or b2c concept We are a team of professionals from a mixture of backgrounds including insurance as you would expect but also technology project management and start-ups We thus talk the language of the start-ups we understand their needs and their ambitions and we are set-up to respond to these We may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territories we are helping our partners launch innovative products to use new distribution channels and to experiment on new pricing techniques We enable our partners to achieve this by providing them not only with primary insurance capacity globally but also a tech platform with modular services (mostly back-end operational services) from which our partners can pick and choose to complement and complete their offering to their customers We also provide access to VC funding to the InsurTechs Most importantly we operate at a pace consistent with the start-ups themselves ndash execution is key We believe our offering is unique in the market and we believe such a model provides the InsurTechs with further means to achieve speed to market Additionally we are also teaming up with digital verticals to allow them to access the insurance market
What challenges have you encountered with partnering InsurTech
We didnrsquot expect that there would be such a demand for our support We had initially planned to work with InsurTechs on all insurance lines of business but we had to limit our offering to property and casualty up to now We will look at opportunities on the other lines of business in the near futureOne has to also bear in mind that MRDP is in itself a start-up we have been in operation only since last May and we have officially already announced 8 partnerships We are currently working with circa 20 partners in different lines of business territories and with different requirements It is very demanding but the strength of our team both in term of expertise and team spirit and more importantly the energy that drives the start-ups who we are partnered with helps to make it all worthwhileWe also do sometimes face challenges in the new risks we are bringing into Munich Re Grouprsquos portfolio but there again the cooperation and support we have internally from our Munich Re colleagues is unrivalledWe fortunately do not face the limitations that legacy systems or ldquolegacy thinkingrdquo might bring to start-ups with innovating ideas in that space I can say we are in a different position compared to some incumbentsLastly and more importantly we are fortunate to have the Munich Re Board of Management support and understanding for our business model
What does the future hold for partnerships and InsurTechWe believe that partnering is crucial if we want change to happen InsurTech holds expertise that us incumbents donrsquot and vice versa We believe each stakeholder should concentrate on what they do best and find the right partners so as a team they can innovate intelligently within the insurance market The lsquopartnersrsquo will evolve beyond what we see now new entrants would not necessarily be from the insurance industry We see the team behind the InsurTech evolve to include more and more insurance professionals who are seeking to bring changes to the insurance market and cannot do so within their current role
WORKING TOGETHER HOW PARTNERSHIPS ARE PAVING THE WAY FOR INSURTECHS InsurTech Rising
ldquoWe may be part of a big corporation but you can picture us as the little speed boat that Munich Re has deployed a boat able to navigate with speed into uncharted territoriesrdquo Leading the UK and European Partner Engagement at Munich Re Digital Partners Jennyfer Yeung-Williams talks to us about how her team are making an InsurTech success story out of their partnerships
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