InsurTech Magazine - January 2023

Helping people thrive in a connected world

In partnership with our clients, Assurant supports more than 300 million customers across the globe. We develop innovative products and services that support, protect and connect major consumer purchases. And we do this for some of the world’s most recognised brands, enabling us to anticipate the evolving needs of consumers, and continually deliver an enhanced customer experience.

Assurant: protecting and connecting consumer tech

Assurant is providing a range of protection products and services to help people thrive in a connected world, partnering with Vodafone to bring protection to life.

Today’s consumer has over 20 different wifi-enabled gadgets in their home, underlining the size of the gadget protection opportunity. Assurant – a leading global business services company that supports, protects and connects major consumer purchases, serving more than 300mn customers – is focusing on insurance products and services that empower consumers to protect those gadgets.

“We focus on everything that sits around the device,” Assurant UK Managing Director Chris Woolnough explains. One of Assurant’s brands is Pocket Geek,

cancel at any time. Protect Your Bubble provides valuable real-time insights for the company based around consumer behaviour, which it can use to hone its B2B propositions.

Culture vitally important to the way Assurant does business

Woolnough says that culture is particularly important to Assurant. “Our culture is pretty special and we call it the Assurant Way,” he says. “Within that, we have a set of values. Those values are common sense, common decency, uncommon thinking and uncommon results. Everything we do hooks back into those.”

This platform of trust has allowed it to enjoy a

CRYPTO AND CLIMATE CHANGE

New trends for insurtech for 2023 include Defi insurance, telematics and climate monitoring technologies

Technology and innovation are driving forward the insurtech industry. In 2023, we expect to see myriad changes across lots of high-tech sectors continuing this theme.

For example, electric vehicles and telematics are revolutionising road safety and premium costs. Meanwhile, as changing weather patterns result in global crisis events, IoT-driven sensors are backed up by cutting-edge satellite technology assessing risks.

In crypto, new products using the parametric model are emerging, too, resulting in greater trust in a space that’s transforming the transactional markets.

It’s going to be a great year for insurtechs – with new products and services catering to customer demands, and super apps delivering a great experience.

We hope you enjoy this month’s issue. Happy New Year – and welcome to 2023!

JOANNA ENGLAND

joanna.england@bizclikmedia.com

“It’s going to be a great year for insurtechs, with new products and services catering to customer demands, and super apps delivering a great experience”

Connected Insurance is helping digital platforms, reduce their risk exposure

Connected Insurance: UBI and the Sharing Economy

Connected Insurance’s Tal Cohen and Yaron Zurr reveal how CI is revolutionising UBI solutions in the sharing economy

Connected Insurance (CI) created a datadriven risk platform that powers the next generation UBIs, driving the space forward.

Tal Cohen, co-founder and CEO of CI explains, “The sharing economy is a relatively new industry with limited exposure history. Traditional insurers are using traditional risk models that they use for similar products. This results in low accuracy pricing, which is based on few risk factors and a black box that customers can’t understand or control. By differentiation, CI breaks the insurance paradigm.”

“Our technology employs pricing models with much higher granularity, factoring many more data points currently ignored standard pricing models. We provide our clients transparency on their insurance costs and empower them to control and reduce costs by making educated decisions,” he says.

Strategic partnerships

Extending their services into the marketplace has been achieved by a collaboration with some of the world’s leading insurance players. Yaron Zurr, co-founder and CCO of CI, says “We believe that insurance players

should become contributors and enablers to the businesses they serve. We provide a solution that empowers our partners to make a better insurance offering to their client, as well as solution for the digital platforms to manage their self-insurance and enable them to offer even more relevant protections to their end clients.”

Technology-driven innovation and CI CI’s full-stack solution connects and serves all parties: sharing economy platforms, brokers, claim administrators, and reinsurers. Connecting everyone under the same platform, says Cohen, creates transparency, leads to better insurance pricing, and ultimately allows sharing economy companies to reduce their total exposure costs.

Cohen adds, “CI provides digital platforms with essential tools such as: Risk & utilization dashboards to help the platforms manage their insurance costs and control their risk; Connected Claims module integrated into the digital; tools to manage the self-insurance part better than most advanced carriers; and tools for rapid creation of embedded insurance.”

The result is a seamless delivery of services and a satisfactory customer journey, concludes Zurr, who adds, “CI can optimise the customer’s insurance pricing by focusing on the lower risk usage and avoid the riskier transactions.”

Learn more

BIG PICTURE

An aerial view of recent flooding in Victoria, Australia . Climate change means freak weather events like these are becoming commonplace. Increasingly, insurtechs are utilising open-source data and IoT-enabled devices to measure flood levels or other weather-related parameters, allowing almost instant payout when a pre-agreed condition is met.

It’s a well-known practice called ‘parametric insurance’, and it’s often considered a type of ‘bounce back’ insurance because it prioritises speed of payment over full indemnification of incurred losses. Find out how the insurance sector is using parametrics in our article on ‘Managing a Climate in Crisis’.

Floods present a plain challenge to insurers Bulleen, Australia

THE BRIEF

TIM HARDCASTLE CEO and Co-Founder, Instanda

Embedded insurance provider Cover Genius has raised US$70mn in an oversubscribed Series D funding round, which it says represents a significant but undisclosed “valuation uplift” on its Series C raise in 2021.

The global insurtech, which specialises in embedded insurance, has grown considerably over the last year alone, with daily gross written premiums (GWP) reaching US$1.1mn and year-on-year revenue almost trebling. In August, it forged a new partnership with BNPL provider Zip to offer insurance cover on purchases at checkout –one of several new partnerships that the insurtech has announced in recent months.

It plans to use the money to support its rapid growth and the expansion of its global insurance distribution platform, XCover . CEO Angus McDonald says: “Closing our highest ever funding round in a challenging environment for raising capital reinforces the strength of our embedded business model.”

“WE CAN ASSESS RISK BEFORE AN ACCIDENT HAPPENS AT ALL AND PREVENT IT HAPPENING IN THE FIRST PLACE”

“REAL INSPIRATION

FROM WHEN YOU SEE, UP CLOSE, LEADERS WHO EFFECT LONG - LASTING CHANGE IN A DEEPLY ENGAGING WAY”

DANIEL

BOXX Insurance is to acquire Templarbit, a cyberthreat intelligence platform that it claims “makes it simpler for businesses to stay ahead of digital threats”

The US insurtech, which describes itself as “the digital insurance agency for small businesses”, has closed a US$22.5mn Series A funding round led by Cota Capital

The parametric insurer has made good on its promise to expand internationally, announced as part of its Series A last February. It has made experienced exec Mark Hara its first US hire u

APOLLO INSURANCE

The Canadian insurtech is reportedly laying off around a quarter of its workforce – or about 30 people – which it says “reflects a renewed focus for our organisation”

The American insurance giant, which is one of the largest car and home insurers by volume, has announced quarterly losses for Q3 2022 of nearly US$700mn

TIMELINE A drive through time: history

Today, mandatory car insurance seems like an inescapable part of daily life. But for nearly 40 years after the invention of the motor car, drivers didn’t need to be covered

1886

Carl Benz applies for a patent for his latest invention: a vehicle that’s powered by an engine. And, with that, the motor car is born.

1925

Massachusetts becomes the first US state to pass compulsory automobile insurance legislation, marking it as a trailblazer among the 50 states.

At the same time, Connecticut introduces a law that requires drivers to prove they can pay for damage, but only after they’ve been in a crash.

Despite this, it wouldn’t be Germany, the country of Benz’s birth, that would be first to introduce mandatory car insurance for drivers.

1930

The UK becomes the first country to introduce compulsory car insurance when it passes the Road Traffic Act. Owners and drivers must now be insured for their liability in causing injury or damage to third parties when they’re on the public road. Germany introduces mandatory car insurance nine years later.

history of car insurance

1996

Salvador Minguijon Perez is granted a patent for an early form of telematics – an electronic data processor that monitors a driver’s mileage and driving manner, feeding the information back to their auto insurer. Soon after, Progressive Insurance teams up with General Motors to offer the first telematics-linked insurance.

2020

2005

Norwich Union becomes the first company to offer ‘pay-by-mile’ insurance, even securing the UK rights to Minguijon Perez’s patent. The motivation was originally affordability, but, as climate change continues climbing the agenda, it soon becomes a means of encouraging people to drive less.

UBI enjoys a surge in growth as consumers face the prospect of renewing their car insurance while working from home or under lockdown.

Today, some of the world’s biggest incumbent insurers – including Nationwide, Liberty Mutual, State Farm and Geico –all offer some form of usage-based car insurance.

COMPANY: ROOT INSURANCE

JOB TITLE: CEO AND COFOUNDER

NAME: ALEX TIMM

Making insurance work for customers, not just insurers

As founder and CEO of US insurtech Root, Alex Timm has pioneered a usage-based, mobile-first approach to car insurance and concentrated on making pricing fairer for the customer

Some entrepreneurs enter the insurance industry cold, with no prior experience whatsoever, and expect to see their bright spark ignite. That wasn’t the case for Alex Timm, CEO and Co-Founder of usage-based auto insurer Root, who has set about creating a company that works better for the customer.

In fact, Timm was supremely experienced when he founded Root Insurance in 2015. A fellow of the Casualty Actuarial Society and a member of the American Academy of Actuaries, Timm studied Actuarial Science, Accounting and Mathematics at Drake University in Des Moines, Iowa before working as an Actuarial Exam Review Instructor at his alma mater for just over a year. He moved on to Nationwide, one of the largest insurance companies in the US, holding a series of consultant roles before making the leap and starting Root.

“In the beginning, it’s rough. You don’t have anybody with you. You know the bank account is going to run dry in a matter of months, not a matter of years”

Its vision was to tackle the archaic car insurance industry, taking a market that worked for insurers and flipping it round so that it worked for customers too. Root Insurance became the nation’s first licensed insurance carrier powered entirely by mobile, and it drew heavily on data and technology to bring fairness back into policy pricing. Its entire business model is predicated on usage-based insurance – the idea that customers only pay for the miles they clock up – and this is one of the ways that Timm achieved such a fair pricing model. But it also did something that many incumbent insurers would never have dared to do: it committed to removing credit scores from its car insurance pricing.

Despite a well-defined vision, the path to success was not always clear for Timm and for his fledgling insurtech company. Speaking to Forbes magazine in 2019, he described the startup experience: “Building Root was like a treasure map. When you start a journey, you may have a good idea of where you want to go; you’ve got a rough direction. But not everything is on the map. No map is perfect, and along the way you can find hidden gems, you can also run into storms. The success of your journey is based on how quickly and how nimbly you can react to all those things that you find along the way. That’s really what we found as a company.”

US states

Nine-digit investment propels the company to rapid growth

In the beginning, nobody signed up for the Root app. “Crickets,” TImm would later recall, remembering how slow the initial uptake was. But, instead of panicking, the Root team patiently built out their user base, proving a couple of Root’s fundamental concepts while utilising the opportunity to test and learn with its earliest customers. Eventually, Alex Timm knew that they would need to find funding.

“In the beginning, it’s rough,” he told Forbes magazine. “You don’t have anybody with you. You know the bank account is going to run dry in a matter of months, not a matter of years.”

After raising US$5mn in Series A in October 2016, Root Insurance secured another US$21.5mn led by Ribbit Capital in Series B funding the

“Building Root was like a treasure map. No map is perfect and, along the way, you can run into storms”

1,500 number of employees US$827.5mn value of capital raised 34 number of

in which it’s active

following summer. The year after saw two separate funding rounds that brought in more than US$150mn collectively – a Series C and a Series D, the latter of which recruited Tiger Global Management as an investor. In total, the company has raised north of US$800mn in just six years, rounded off by a seismic US$350mn Series E round in August 2019 and a similarly gargantuan US$300mn Post-IPO Debt round at the beginning of 2022. The company, which is based in Ohio, went public in October 2020.

Today, Root Insurance is an unstoppable force that is revolutionising car insurance – true to its original vision

of orienting the insurance marketplace towards the consumer’s need, not the insurer’s. It sells in 34 states and counting and, in 2019, diversified into renters’ insurance and homeowners’ insurance, which uses the same mobilebased approach to deliver seamless and affordable coverage to householders. The proposition is still niche, with the renters’ insurance only available in nine states, but the company is growing.

Timm continues to lead the organisation he founded as CEO and, today, Root Insurance is the largest property/casualty insurtech in the country with more than 1,500 employees.

Tim5Hardcastle

Tim Hardcastle is the CEO and founder of INSTANDA – one of the UK’s leading no-code, core platform insurtechs that enables carriers and MGAs to create, build and implement complex insurance products in a matter of weeks or months

Q. DESCRIBE YOUR JOURNEY INTO INSURTECH. HOW DID YOU GET HERE?

» Early on in my career, I worked as CIO of two very large organisations in different sectors, including insurance, where I was responsible for implementing and running very large, complex systems. As a senior executive, I witnessed first-hand how dated technology was limiting the ambitions of insurers and creating a disconnect between providers, products and the people who rely on them. My experience formed strong views about the need for technology to be accessible, malleable and agile.

I realised there was a huge opportunity for the insurance industry to undergo digital transformation – in a similar way other industries were innovating and using technology as an enabler. I felt compelled to be part of that transformation, and it’s something that continues to drive me today. Unlike in other industries, where technology was enabling new business models and helping to build competitive advantage, insurance technology was holding back companies that were seeking to modernise, and it made me even more determined to bring to the insurance industry a technology of which everybody can be proud.

When I founded INSTANDA, we started with a passion to use the very latest technology and ways of working – cloud computing, DevOps and agile delivery – to design, build and scale a no-code platform for the entire insurance community. Since then, we have become a proud pioneer and leader of no-code insurance platforms; an organisation that is seen as progressive, challenging and doing things differently. For many of our clients, we are more than this. We operate as their core insurance platform.

Q. WHO WAS YOUR CHILDHOOD HERO AND WHY?

» I was an avid reader of Marvel comics (well before they reached broader appeal with the advent of CGI and great movie making!) so there were several to choose from, both male and female. But I read widely from sci-fi to fantasy, and characters such as Thomas Covenant were my heroes. James Bond in that era was a bit lightweight in comparison!

“ I felt compelled to be part of that transformation, and it’s something that continues to drive me today ”

Q. WHAT'S THE BEST PIECE OF ADVICE YOU’VE EVER RECEIVED?

» “Making the complex simple to comprehend is real elegance”.

I first heard of this with the invention of the Sony Walkman, and then I heard something uncannily similar from the chairman of a FTSE 100 company I worked for. It has become a principle that is imbued in our design philosophy at INSTANDA.

Q. NAME ONE PIECE OF TECHNOLOGY YOU COULDN’T LIVE WITHOUT AND TELL US WHY (EXCLUDING YOUR MOBILE PHONE)

» Anti-slip/traction control on my motorbike – I won’t go into the detailed reasons why!

Q. WHO DO YOU LOOK UP TO IN TERMS OF LEADERSHIP AND MENTORSHIP?

» Real inspiration comes from when you see, up close, leaders who effect long-lasting change in a deeply engaging way, and I have been fortunate to work for a number of CEOs who all had amazing strengths and, in all cases, weaknesses! Learning from them has been invaluable.

Q. INSTANDA IS MOVING FROM STRENGTH TO STRENGTH

–

DID YOU EVER THINK YOUR PLANS WOULD TAKE YOU TO THIS POINT WHEN YOU FIRST STARTED OUT?

» We instinctively knew INSTANDA would appeal to the many thousands of insurance carriers and MGAs globally. Once we completed the design thinking, our instincts turned into a stronger sense of being able to realise the dream. Of course, building something is different to designing so that part took a little longer than we anticipated! But, several years on, we are incredibly proud with how wide and far the design principles have travelled, enabling our clients to see significant value in, and when using, the INSTANDA platform.

“ Real inspiration comes from when you see, up close, leaders who effect long-lasting change in a deeply engaging way ”

In June of 2022, Instanda raised

in its Series B investment round

Q. IS THERE A PERSONAL ACHIEVEMENT FROM THE PAST 12 MONTHS OF WHICH YOU ARE PARTICULARLY PROUD?

» Personally, successfully making a transition from the pandemic, seeing all the kids move on and then successfully setting up a new home on the coast with my soul mate of over 30 years, Melanie.

Business-wise, as I led it, the latest fundraise of $45mn has put us into another league entirely at multiple levels, so I am very proud of what we had to offer with our investor partners, including Toscafund.

Q. DESCRIBE YOURSELF IN THREE WORDS

» Passionate, brave, determined.

Q. WHAT INSPIRES YOU IN INSURTECH TODAY?

» Seeing how insurtech companies are maturing and offering a genuine, compelling way forward for the industry.

Q. WHAT’S NEXT FOR TIM HARDCASTLE?

» Business-wise, I’m ready to see INSTANDA take off and reach the next level in our growth trajectory as a tech company. We will justifiably claim to be the world’s most advanced digital platform by next year, and I can’t tell you how pumped I am that it’s within sight.

Personally, I can’t wait to realise one of my lifelong dreams: I’ll be going racing with the Caterham series, which runs over several circuits in the UK in 2024, so there is plenty of prep needed next year.

US$45mn

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Akamai prioritises the future demands of cyber customers

Steve Winterfeld of Akamai discusses the company’s university-based founding and how it merged into a leading multibillion-dollar cybersecurity firm

Akamai was founded following a competition at the Massachusetts Institute of Technology (MIT), entered by its co-Founder and CEO Frank Thomson Leighton—Dr Tom Leighton. Since that time, the organisation has expanded massively, and in the words of Steve Winterfeld , Advisory CISO at Akamai, the company “continues to solve hard problems.”

The cybersecurity company plays a critical role for corporations as it focuses on the future, to determine whether threat motivation will change and how to best combat ransomware attacks, state-sponsored DDoS attacks, and ransomware that could turn into wiperware.

“Those are real concerns, and we’re keeping an eye out for those. And so we have probably 15 security capabilities backed up by services, responding to customers’ needs and rapidly growing on the edge compute and cloud side.”

“We started out with a web application, or as it is more commonly called now, web application and API protection, and expanded into protecting the infrastructure against DDoS to include the DNS infrastructure and recently added internal infrastructure protection and visibility through micro-segmentation,” explains Winterfeld.

Responding to the cybersecurity needs of the customer

As an established cybersecurity organisation, Akamai can now focus on what customers need.

Winterfeld explains that, in response to its clients’ feedback, the company has been acquiring the necessary assets and tools to fulfil those needs with the recent purchase of Guardicore. Guardicore’s leading microsegmentation products will be added to Akamai’s comprehensive portfolio of Zero Trust solutions to protect enterprises from damage caused by breaches like ransomware, while safeguarding the critical assets at the core of the network.

“We bought Linode, which is a cloud provider. And so now we have an integrated platform to build and perform on as well as secure.”

A prime example of Akamai’s ability to meet customer demands, particularly in high-risk environments, is its partnership with First Bank, which is “very concerned about its real-time visibility into its network. We’re partnering with them on a software-based microsegmentation, where they’re able to see those data flows and create segments.”

DRIVING DIGITAL INSURANCE INNOVATION

AD FEATURE

WRITTEN BY: JOANNA ENGLAND PRODUCED BY: JOE PALLISER

A truly global commercial and consumer insurer, Chubb is driving digital transformation across the digital and insurance marketplace globally

hubb is driving digital transformation within the vast insurance marketplace.

The insurer is a global provider of property and casualty, accident and health, reinsurance, and life insurance on a global scale.

Gabriel Lazaro is the Head of Digital for Chubb’s international general insurance business – a role that sees him based in Singapore, and responsible for the success and growth of the digital businesses across Latin America, Europe, the Middle East and Asia Pacific. Lazaro works with the consumer and digital teams globally to expand Chubb’s distribution through digital ecosystem partnerships.

“We innovate in terms of insurance products and value propositions. That includes claims and the technology to enable a seamless customer experience,” explains Lazaro, who spent 12 years in early-stage and mobile content companies, before a stint at AIG as Head of Digital for emerging markets. It was this experience that led to a move to Chubb in 2016, where he now oversees the digital insurance product distribution and expansion of the company’s digital business across 51 countries and territories.

A culture of development and inclusion

With a global footprint of local offices in 54 countries and territories, Chubb has a robust reputation in the industry. It is known for its excellence in underwriting, risk engineering capabilities, and claims services, as well as for its innovative approach to digital transformation.

The sheer volume of the company is staggering. Chubb employs an estimated 34,000 staff around the world. In 2021, the company reported a total of US$47bn in Gross Written Premiums (GWP) and currently owns around $200bn in assets.

Yet, despite its massive size, looking after its people is a “prime consideration”, says Lazaro, who speaks of his team with pride.

He adds: “I like to inspire people to become the best versions of themselves. In order to do that, I need to provide a clear vision to make sure that everyone is aligned and moving towards a common goal.”

Empowering the workforce is also critical, he states. “It’s imperative to empower people to unleash their creativity. The other part I'm passionate about is execution and providing tangible results. At Chubb, we are a very diverse group of professionals. There is entrepreneurial spirit across the organisation with a can-do attitude and we practise our craft with precision and passion.”

LAZARO SVP,

“The

GABRIEL

HEAD OF DIGITAL, OVERSEAS GENERAL INSURANCE, CHUBB

GABRIEL LAZARO

TITLE: SVP, HEAD OF DIGITAL, OVERSEAS GENERAL INSURANCE

LOCATION: SINGAPORE

Gabriel Lazaro is Head of Digital for Overseas General Insurance, Chubb's international general insurance business in 51 countries and territories. Based in Singapore, Mr. Lazaro has responsibility for digital insurance product distribution and digital business in countries and territories outside North America, working with Chubb's digital teams around the world.

Driving

digital transformation in emerging markets

Although the company has always had a strong focus on digital products and services, many recent changes have been implemented to expand and engage consumers.

“We have always been focused on expanding our digital products and services through partnerships based on a B2B2C model,” says Lazaro. “Developing unique value propositions and embedded experiences within platforms and ecosystems is paramount. We have almost 200 digital distribution partners globally, across financial services, e-commerce,

EXECUTIVE BIO

Mr. Lazaro joined Chubb in 2016 as Head of Digital for Latin America and was promoted to his current role in 2021. Prior to joining Chubb, he held multiple international roles at AIG, including Global Digital Marketing Director and Head of Digital for Emerging Markets. Mr. Lazaro started

super apps and major airlines. These digital distribution partnerships provide us with an addressable market of more than 300 million customers, most of them in Latin America and Asia, who see our products through our digital distribution partners’ business platforms.”

As Chubb focuses on its digital transformation journey and its entry and development of emerging markets, the corporation has also developed a platform called Chubb Studio that enables it to provide API technologies to connect with partners in record time. By embedding Chubb products in the partner’s ecosystem, the company is able to deliver contextual insurance offerings to customers seamlessly. To date, more than 19 million policies have been sold across the offer spectrum through Chubb Studio.

According to Lazaro, the technology has provided Chubb with a competitive advantage over other industry players.

“It's a cloud-based, easy-to-use API platform that fuels our businesses and partnerships while helping us to connect with our digital distribution partners. We can create products within their platforms in a very easy and fast manner, pulling our digital underwriting, claims and service capabilities together into one place.”

“It provides scale because, as a global platform, every time we incorporate another market or product, our partners are able to benefit from our expanded offerings.

Chubb Studio

Emerging markets and insurance technology adoption

One area Chubb excels in is emerging market penetration. This isn’t a task for the faint hearted; companies developing new products in such a space must often be prepared to work with outdated systems and legacy business models before introducing any new products to market.

“At Chubb, we see emerging markets as a fantastic opportunity – especially Southeast Asia and Latin America. These two territories alone have a combined total population of one billion people, 80% of which are under the age of 40 and fully digitally engaged through smartphones.”

Lazaro says that, during the pandemic in Southeast Asia, more than 70 million people

became digital consumers, therefore, enabling protection solutions for those customers digitally has become an opportunity. Entering into such markets also enables companies to benefit the local populations by reducing the protection gap and providing low cost, easy-access insurance products that previously were not available.

“There’s a protection gap globally – especially in developing economies and emerging markets – of around $1.2tn. These markets have low insurance penetration compared to other markets globally,” says Lazaro, who points out that the pandemic has accelerated digital adoption across all geographies, developed markets and sectors.

“We are focused on an emerging middle class, small-to-medium companies, gig workers, content creators, Gen Z and Millennials,” he adds. “There is a huge opportunity for those across the globe.”

Insurance technologies and the

digital ecosystem

As part of its digital expansion, Chubb has partnered with a wide range of businesses on a global scale. The insurer provides its innovative services as part of a move to increase embedded product opportunities for agents and brokers.

“We work with businesses globally, and our goal is to help them to embed insurance offerings into their core products and services,” says Lazaro. “This provides peace of mind to the end customer and also helps businesses increase customer loyalty and then support it with new revenue streams.”

As a global company, Chubb offers a turnkey solution by helping its digital distribution partners with regulatory and related elements to make sure they have a successful insurance experience. The teams have broad industry expertise and implement

digital insurance product offerings for verticals such as banks, fintechs, super apps, ecommerce retailers, mobility companies, travel, mobile network operators and more.

Lazaro’s team collaborated with Grab, Southeast Asia's leading superapp providing users with transportation, food delivery and digital payment services, to provide Grab users with an innovative insurance solution called Ride Cover.

Ride Cover provides complimentary personal accident insurance to Grab’s passengers and disburses a voucher in the event of a delayed pickup. Available in Singapore, Malaysia, Indonesia, Vietnam, the Philippines and Thailand, Ride Cover is opt-in and integrated into the passenger’s ride booking journey within the Grab App. For a very low fee (e.g. S$0.30 in Singapore), passengers are offered a premium service with additional protection in the event of accidents.

They have also partnered with other innovators such as NuBank, the largest neobank in Latin America, to launch a fully digital life insurance offering embedded in the bank’s app. “Together with Nubank, we created customer-friendly life insurance with a flexible product and a price that resonates with the Latin American emerging middle class. It was reported that, in the first year, we sold more than half a million life insurance policies, more than half of those who bought the product said it was the first life insurance they had taken out,” he states.

Other partners include Dacadoo and Betterfly, as well as other major players in Latin America, Korea, and Southeast Asia, all creating value-adding services to the end users that extend beyond the traditional insurance. “We like to co-create to develop those unique experiences at scale,” says Lazaro. “One of our core strengths is that,

as an international company, we partner with companies that have a vision beyond their unique markets.”

Lazaro says Chubb creates unique value propositions – from selling to claims experiences. “We see everything as a whole. We are proud of our journey and partnering with the best-in-class partners that we have. It has helped us improve our services from the product and technology perspectives.”

Growing services in the pandemic

Like many providers, Chubb’s digital business expanded during the pandemic because the demand for digital services skyrocketed. “For

GABRIEL LAZARO SVP, HEAD OF DIGITAL, OVERSEAS GENERAL INSURANCE, CHUBB

us, especially in the digital space, it has had a positive impact in terms of uptake,” says Lazaro. “We launched Chubb Studio in the middle of the pandemic, and we are going to keep expanding our capabilities through the platform to make the connection with our partners easier.”

Lazaro says that, in terms of claims and servicing, Chubb is working towards frictionless customer journeys, enhancing the overall experience to make claims effortless, simplified and with as few clicks as possible. These enhancements will be made possible by new technologies the insurance giant is investing in.

“We created a customerfriendly life insurance with a flexible product and a price that resonates with the Latin American emerging middle class”

“In terms of the technology that we’re investing in, data analytics and discovering how we can take advantage of the data that we’ve collected by ourselves through our partners, this information will enable us to work towards product recommendation engines and make, at scale, much more relevant offerings for partners to provide to their end users.”

The goal, he says, is to offer the right product to the right partner at the right time.

The future of insurance Embedded products are, in Lazaro’s experienced eyes, the future of the insurance

industry – although they are also relevant in other sectors. Point of Sale offerings, he reiterates, present truly new and valuable opportunities for insurers looking to expand their products and services. 34,000

“Chubb was one of the early movers on embedded insurance, through airlines many years ago. Then we expanded partnering with ride-hailing companies, super apps, and fintechs. We are the leaders in some markets and territories, in terms of volumes and experience.”

“We truly believe embedded insurance provides the means for each platform to be able to provide really meaningful insurance products to their customers in a seamless experience. With one click, we can increase protection for customers and create incremental sources of revenue for

our partners. It's a win-win situation.”

It is this connectivity that will result in a smaller protection gap for end-user customers – especially those in emerging markets, which, says Lazaro, is the ultimate goal. “I strongly believe that we have a-oncein-a-lifetime opportunity. There are more than four billion people connected to the internet right now, and the digital economy, through partnerships and ecosystems, will be worth trillions of dollars.

“We innovate in terms of insurance products and value propositions. That includes claims and the technology to enable that experience”

GABRIEL LAZARO SVP, HEAD OF DIGITAL, OVERSEAS GENERAL INSURANCE, CHUBB

Usage-based insurance trends for 2023

Usage-based insurance – or UBI – has become synonymous with state-of-the-art digital insurance providers. The technology, which is mainly used within the auto insurance market, has a robust and impressive growth rate.

Indeed, according to the Global Usage-Based Insurance Market Report 2022, the sector is expected to grow to US$132.02bn by 2026, at a CAGR of 24.9%. Needless to say, this long-term growth looks steady, despite many instabilities within the marketplace –and expert predictions detect not even a whiff of a slowdown until at least 2031.

The birth of UBI

But the industry hasn’t always been this healthy – and UBI isn’t even as shiny and new as it currently appears. The main gamechanger within the industry is the advancement of technology, which has seen concepts and innovations that have been in the pipeline for decades finally come to fruition.

According to Verisk, UBI was first conceptualised in the 1960s in the US at a time when tensions with the former Soviet Union

Usage-based insurance is increasing in popularity and looks set to disrupt the way many providers create new products

Usage-based trends

WRITTEN BY: JOANNA ENGLAND

were uncomfortably high. The US government, through its preoccupation with national security and nuclear threat, funded the development of global positioning system technology – aka GPS. Originally intended for military applications, it eventually did what all major inventions do and, within 10 years, became a tool for civilian applications. This monumental development became the basis for telematic technologies and solutions.

By the early noughties, the internet had passed from nascent into the mainstream, and this meant that experts were able to develop and apply telematics technologies to a wider audience and variety of use cases. Back then, tracking was painfully slow, as data transmission was limited to only a handful of deliveries per hour. But, within a few short years, GPS navigation systems for vehicles were a reality, giving rise to the possibility of using the same technologies to monitor and experiment with road safety and driving data.

Simon Dicks, Insurance Channel Manager, Lytx, explains that, during COVID-19, many vehicles weren’t needed for months, enabling fleets to obtain refunds on those that weren’t used. The fallout of this is that today, managers now only expect to have to pay insurance fees for vehicles that are actually on the road – and it’s this element that’s forcing insurers to provide usage-based cover.

“Putting a dynamic insurance model into practice isn’t that easy. Insurers want to be able to charge a different premium according to the quality of driving,” says Dicks. “The only way to address this is to put a highly accurate level of camera technology, both inside and outside cabs, supporting this with AI. This way we can see not just that an incident has happened, but why it happened.”

UBI trends for 2023

As technology and our ability to access and process information in real time becomes commonplace, UBI has hit the accelerator. As Dicks points out, driver and road condition surveillance solutions are a huge gamechanger in the telematics space.

COVID-19,

digital transformation and the rise of UBI

While UBI has been in place with auto insurers for several years – and continues to gain in popularity – the boost to the sector only occurred during 2020 and 2021, when the pandemic transformed the way people worked and commuted.

SIMON DICKS INSURANCE CHANNEL MANAGER, LYTX

“We can assess risk before an accident happens and prevent it happening in the first place”

SIMON DICKS INSURANCE CHANNEL MANAGER, LYTX

First Notification Of Risk solutions

First Notification Of Risk – or FNOR –solutions have skyrocketed over the past 24 months, looking set to make an even bigger impact on our roads as legacy insurance systems struggle to compete with the speed and accuracy of telematics.

“We can assess risk before an accident happens at all and prevent it happening in the first place. We call this First Notification Of Risk (FNOR) – and it’s a whole step up from FNOL,” explains Dicks. Although, he does point out that there’s still a long way to go in terms of finetuning the solution.

“There are so many different companies out there selling cameras, selling telematics systems, and producing information in hundreds of different formats. Claims data will have to be standardised before the sector can really transform – we can’t just click our fingers.

“Some of the big insurers are really just dipping their toes into insurance tech still; ideas like usage-based insurance and FNOR represent a massive change for them. Insurance has always been done reactively, with underwriters analysing past data to forecast costs and premiums. Now, we’re going to calculate everything based on individual performance. It’s going to take a lot of data and a lot of time.”

Accelerated claims to streamline payouts

The second major trend in UBI – specifically in the automotive industry – will be accelerated claims, triggered by on-device crash detection systems.

One of the major causes of delayed payments for insurers is deciphering and contacting all parties involved in the crash. Prior to digital solutions, it presented a logistical nightmare and meant vehicle owners often had to wait weeks to be compensated for damage. But UBI policies are already offering products that will settle these issues swiftly and efficiently by using the data to assess the crash site situation.

Crash detection is a common offering that even contacts the emergency services and records the incident in its entirety, prior and

“Putting a dynamic insurance model into practice isn’t that easy”

post-crash. Using AI and ML, they can also fill in all the online form details required to push any claim through much faster.

Multimodal profiling of driver behaviour

Although this already takes place to a certain extent – especially in the fleet space –multimodal profiling in the future will have the capacity to track the continuous mobility of the vehicle.

Currently, telematics do provide certain data points that can assess whether a driver has used unsafe practices. But better tracking will provide a wider assessment of behaviour, as an unfortunate incident makes up just a fraction of a driver’s ability and, yet, may critically impact the level and cost of cover they find themselves eligible for. Constant

monitoring elevates the general score by putting the bad practices into perspective. This real-time possibility will be made increasingly available as 5G networks enable higher volume and greater data transfer capabilities.

Data, data and more data

UBI represents a far bigger realm of possibility than just a fairer offering for auto insurers. The use of connected devices that are separate from the telematics black box, while still a provider of information for insurers, is on the horizon. The evolution of UBI will see mobile devices being used to place driver journeys in context – for example, an emergency dash might break the speed limit and incur the wrath of your cover provider. But, if that journey was set in the context of a medical emergency, that alters the perspective on why the driver was taking that risk in the first instance.

In short, using multiple data points to create a fuller picture of the driver and their environment helps to better shape the insurance outcomes, both when it comes to the expense of premiums and payouts on claims.

However, the use of multiple data points is still a contentious issue when taking privacy and security into account.

“Some of the big insurers are really just dipping their toes into insurance tech still”

SIMON DICKS INSURANCE CHANNEL MANAGER, LYTX

BEAZLEY DIGITAL

WRITTEN BY: RHYS THOMAS

PRODUCED BY: JAKE MEGEARY

UNDERWRITING RISK IN THE DIGITAL ERA

Innovation and technological advancement have been at the heart of the Beazley Group since it was established in 1986. The specialist insurer has always remained close to the rapidly evolving industries it serves, with a client base that is highly diverse, in size, industry and geography, and leaders in their field. For more than three decades the group has experienced consistent growth, writing close to US$4bn of premiums in 2021, and with greater ambitions for the year ahead.

But as the world is changing, so is Beazley. In January 2022 the group launched a new division to elevate its digital capabilities and lead from the forefront of accessible, always-on insurance, rather than react to the demands of clients and trends in the sector. Beazley Digital is helmed by James Wright, an insurance veteran who joined the firm in 2004 and has held a variety of roles in the intervening 17 years. His latest charge as Head of Technology will see him grapple with new challenges, but also seize new opportunities.

Head of technology James Wright introduces Beazley Group’s brand-new dedicated digital division and the future of digital, specialist insurance

to-face, expert relationship that we’re known for. So we decided to bring together all of the talent from those digital channels into one division,

create a more joined up, holistic service back to our brokers, and to our clients.”

“We

from

of placing risk with us,” says Wright. “Our brokers want digital but they also didn't want to lose that kind of specialist, face-

digital

Beazley Digital is built upon an objectives and key results framework (OKR) - a common approach for technology companies - with five overarching objectives that define the division’s output. Not only does this carve a transparent roadmap, it also allows each

to

JAMES WRIGHT HEAD OF TECHNOLOGY, BEAZLEY DIGITAL

“We started to hear more and more from our brokers that they wanted simpler, faster, more digital ways of placing risk with us”

started to hear more and more

our brokers that they wanted simpler, faster, more

ways

individual to understand how the work they do impacts and improves the outcome. It is important, Wright says, that the firm’s experts evolve as much as the technology itself.

Beazley Digital’s Five Key Objectives

The first of Beazley Digital’s core objectives is brilliant basics, a commitment to get the fundamentals right and deliver an exceptional service in a very automated manner. The second is to meet brokers where they want to be met, creating from

the perspective of brokers rather than an insular ‘build it and they will come’ mentality.

“Our third objective is access to specialists,” Wright explains. “This is really important. We’re hearing loud and clear that our brokers and our clients still want to be able to access a specialist, whether a claims manager or underwriter, to better understand their risk. Fourthly - and this is becoming more common across the industry anyway - is using data to drive insight and leveraging that in our everyday business operations to better understand how our products are performing and what our clients want.”

The final mission statement is to do better, to continue to innovate beyond base level expectations. Refining Beazley’s current business is not enough for Wright. With a new cross-functional team freed from their ‘day job’ and able to focus on pioneering truly transformative projects, Beazley Digital is building for the future, a near future where the Amazon effect has already brought friction free, zero-touch accessibility to everything from finance to supply chain procurement.

“I’m sure we have a broker demographic that is becoming younger and much more digitally adept,” says Wright. “I think the way of doing business historically is probably not how it's going to be done in the future. Yes, in some markets the way that business is done is going to persist for the next few years, and that’s why we’ve got one eye on the future and developing those new channels that can really connect with our brokers in new ways to drive that digital efficiency.”

To do this, Beazley Digital is stepping away from how insurance firms traditionally prioritise products, instead focussing on distribution channels through which clients and brokers access them. Wright says the team is “very deliberately organised” to serve four core channels: APIs, leveraging

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business value through teamwork. As Beazley’s Head of Technology James Wright said: “Endava has access to talent markets that we don’t. Endava provides that talent pipeline for us, which is crucial, and has empowered us to scale our ideas and concepts quickly using very strong engineers that we wouldn’t ordinarily have access to.” Implementing and developing products on Sequel Rulebook has been a game-changer for Beazley. “This has helped them a great deal in growing their client base,” says Gabi.

Endava brings much more to the table than IT capability. Its model of partnership delivers targeted and reliable results, at speed, for insurance carriers.

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Partnering for digital excellence

“We are changing how we work with vendors and partners in terms of our agile method and realisation framework,” Wright explains. “We’re ensuring that those partners are aligned with that way of working, and we're using a common set of tools and language to drive the right outcomes, bringing our vendors closer together in this environment.”

Endava is a key technology partner for Beazley, with delivery units around the world. “What this means is they've got access to talent markets that we don't have access to. And given that everyone's trying to digitise at the moment, in every industry, there is a real war on talent,” Wright explains. “Endava provides that talent pipeline for us, which is crucial, and has empowered us to scale our ideas and concepts quite quickly using very, very strong engineers that we wouldn't ordinarily have access to.”

One example Wright points to is the Beazley Digital API gateway, a complex combination of proprietary, internally developed technology

JAMES WRIGHT HEAD OF TECHNOLOGY, BEAZLEY DIGITAL

“Five years out, the real way to prove [digital] is by building a meaningful book of business”

JAMES WRIGHT HEAD OF TECHNOLOGY, BEAZLEY DIGITAL

that relies on Microsoft’s Azure cloud infrastructure. “Endava’s engineering team have been able to very quickly scale that operation up, so we can provide numerous products and services via API.”

Under the bonnet, Beazley Digital’s products leverage Verisk’s Sequel Rulebook, a robust rules engine into which the insurer inputs its underwriting rules, logic, rating and documents. It’s something Wright needs to do, but partnering with Sequel goes beyond necessity.

“Sequel also have an ambition to move and digitise a broader part of the market,” he explains. “To do that they've got this concept called the Sequel Hub, which we’re a partner of, and that allows us to put products into a one-to-many environment, allowing lots of brokers to access our products. The reason we really love that is that it is starting to bring

some standards to our industry.”

This product is surfaced to brokers under the MyBeazley brand, an evolving broker trading portal already on the market in four countries that illustrates where Wright’s division is headed. MyBeazley provides brokers with access to 14 products, providing instant insurance quotes and terms they can feed back to clients. It is an immensely customisable portal that Beazley has been developing for several years.

“MyBeazley has been built in a very clientcentric way; we haven't just taken the Sequel rulebook product off the shelf,” says Wright. “Over the past three years it has been heavily customised, specifically from broker feedback, and as a result of that is being very well received by brokers. We’re even attracting underwriting talent as a result of having a system of that nature, and the plan

“Winning the market is very important, but providing that true omni-channel experience, giving the client choice, is the really exciting part of what we're offering”

now is to launch that into Canada and the US. It’s a very solid example of how we’re using digital in a competitive way.”

The future of beazley digital Beazley Digital is a brand-new division. While much of the insurance firm’s digital acumen is today centred upon the transactional elements of buying and selling insurance products, Wright is emphatic that a focus on channels before products will change that. It means providing a true gateway experience, where digital training materials about Beazley products will better equip brokers, where risk information is instantly available at their fingertips, and where having a video call with a specialist ensures Beazley’s reputation for access to expertise endures.

“We see that this as an experience that's much broader than just the trading portal element,” explains Wright. “That's really that's a core part of what our proposition is going

to become over time. Winning the market is very important, but providing that true omnichannel experience, giving the client choice, is the really exciting part of what we're offering.”

Over the coming year, Wright hopes to establish a digital foundation to build upon, an agile delivery framework, and “rather than just me saying it”, feedback from brokers that vindicate the division’s OKR approach.

“Five years out, the real way to prove that is by building a meaningful book of business,” Wright adds. “Across multiple territories, across multiple products, what we'd like to be saying in five years is that we're writing somewhere between US$400-500mn of small business and 80% of that is digitally underwritten, straight through processes, and with broker and client feedback being very positive about that.”

No-code platforms are becoming increasingly popular among insurers striving to migrate away from legacy systems and unshackle themselves from the burden of manually coding everything.

The need is clear: as consumers face greater cost-of-living pressures and the global economy stares down the barrel of a prospective recession, insurance is going to be one of the sectors adversely affected.

As insurance falls down the priority list for consumers, insurers will need to find

a competitive edge wherever they can –perhaps becoming leaner, improving fraud detection, or raising the accuracy of risk modelling and the precision of policy pricing.

According to McKinsey, premium growth within the insurance sector contracted to just 1.2% in 2020 compared with a growth rate of more than 4% in each of the prior 10 years, while profits fell by around 15% from 2019.

James Lawrence, Director of Insurance for McKinsey, says: “Insurance companies need digital solutions that play well with their legacy systems, allowing them to dismantle outdated platforms incrementally instead of enduring the cost and risk involved with

For insurers, speed of implementation can either make or break your ability to satisfy market demand. That’s why no-code platforms are becoming popular

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a mass overhaul of the entire infrastructure. By using a low-code application platform, companies can tailor and develop their own applications to best accommodate their needs.”

How do no-code platforms benefit insurers?

Insurers are increasingly turning to no-code platforms, attracted by the ease with which they can build quote journeys, automation rules, documents, rates and email templates among other things.

Tim Hardcastle, CEO and Co-Founder of Instanda, explains: “No-code platforms are tailored to the insurance industry, with all of the key workflows and processes already built in to help automate the entire insurance value chain.

“Take, for example, automated renewals. When the renewal staging date passes, the system can be configured to automatically collect third-party, fire underwriting rules, then automatically generate and send the necessary documents, making it so that underwriters don’t need to spend valuable time on low-risk policies.”

Filip Verloy is a technical evangelist for API security platform Noname Security. He elaborates: “No-code offers numerous benefits over the alternative, resource-intensive way of building custom applications. One benefit is the functionality can be closely matched to the actual process being digitised.

“The analogue process is usually the starting point for the creation of the lowcode app, whereas it isn’t possible to fully customise regular, off-the-shelf software to the same extent. If we think about the insurance industry – with its myriad of rules, regulations and need for integration with external systems – a low-code-accelerated process is ideal.”

FILIP VERLOY TECHNICAL EVANGELIST EMEA, NONAME SECURITY

“No-code offers numerous benefits over the alternative, resource-intensive way of building custom applications”

Fostering diversity of talent throughout a business

One of the welcome side effects of lowcode builders is that they allow more people from within an organisation to get involved with the development of new products or workflows, thus increasing the diversity of talent within a business. Previously, a highly technical skillset was required – alongside an aptitude for code –but now, codeless builders allow relatively unsavvy employees to get hands-on, too.

“Many enterprises are struggling to hire developers,” explains Noname Security’s Filip Verloy. “Therefore, the opportunity for citizen developers to step in using no-code apps can dramatically accelerate the digital transformation of a business. Citizen developers don't need to actually write lines of code but can use a User Interface (UI) to drag-and-drop elements, connecting them together and to external data sources.”

Rather than making highlyqualified coders obsolete, it “opens up a great deal of capacity” for them to focus on “more value-adding projects such as streamlined FNOL, AIenabled fraud detection and data insights”, adds Instanda’s Tim Hardcastle.

What benefits can be passed on to insureds?

Ultimately, an insurance company switching to a no-code platform must bear fruit. There must be a stronger business case than just simplifying complicated legacy systems, and the end-customer must be able to see the result.

Hardcastle says: “No-code platforms put tech in the hands of insurance people on the front line of pricing decisions, distribution decisions and data-enrichment decisions. This tech enablement helps insurers transform front-end consumer experiences at speed and low cost.

“For example, one of our MGA clients in Canada has launched more than 25 products in the last year using our platform. Their team was able to build 25 sets of

JAMES LAWRENCE DIRECTOR OF INSURANCE, MCKINSEY

“By

platforms

TIM HARDCASTLE CEO AND CO-FOUNDER, INSTANDA

products, rates, forms, and front-end experiences with minimal guidance from our implementation experts. The no-code nature of the platform enabled them to quickly iterate based on customer needs and operate with a lean team of business users. They leveraged the pre-existing generic workflows and processes of an insurance platform then added, through no-code configuration, all the key elements to create a highly varied, differentiated insurance portfolio in months. As a result, their business growth is dramatic. In their first year, they will write over $20mn, and they expect to reach over $100mn within three years from a standing start.

“No-code platforms are also more flexible when it comes to customer and policy data, meaning they can break down silos of information and offer more personalised products. Many other fintech industries have already stolen a march on the insurance sector by becoming more retail-like in this way.”

Are no-code systems inherently more secure? Insurers who embrace no-code technology will quickly discover that it’s cleaner and simpler from a UI perspective – but this doesn’t necessarily mean that no-code is safer, Filip Verloy says. “Overall, low-code and no-code apps aren’t inherently more secure than traditional apps. Just because they hide the back-end complexity for developers, doesn’t mean that complexity is not there anymore. Furthermore, these apps still run on infrastructure, and infrastructure remains insecure by default.”

Instead, insurers should be wise to the security implications that exist and continue to be vigilant, particularly with the threat landscape the way it is. Verloy continues: "It should be assumed that citizen developers are not cybersecurity experts. Considering how easy it is to consume and potentially manipulate APIs – the data sources tying these lowcode apps together – we need to ensure that platforms can be built as securely as possible.

“Currently, the focus is on ease-of-use and the assumption that the underlying systems exposed via APIs are working as expected and secure. That assumption is not correct, especially in the insurance industry, where multiple third-party systems need to be interconnected for data to be exchanged.

“Therefore, despite simplifying the developer experience, it is vital that security remains paramount. If anything, more security controls need to be in place to train and monitor the influx of citizen developers.”

“No-code

put tech in the hands of people on the front line of pricing decisions, distribution decisions and data-enrichment decisions”

WRITTEN BY: ALEX CLERE

The business case against legacy technology is fairly plain to see. Not only do legacy systems hold insurers back from offering the type of agile, dynamic customer experience that insureds expect, they’re also exorbitantly expensive to maintain. For those that remain on legacy technology, it’s not uncommon for insurers to spend up to 70-80% of their IT budget on continual maintenance, with the cost of upgrading an entire organisation from one version to another sometimes reaching seven figures. Clearly, cloud-native technology has the edge here – both in the ease of keeping systems updated, but in terms of price, too. But what does adoption look like, and how is cloud migration working in practice to transform insurance organisations?

What challenges do insurers face?

In part, this switch was accelerated by the COVID-19 pandemic, as Gartner Senior Principal Analyst Brandon Medford explains: “Organisations are advancing their timelines on digital business initiatives and moving rapidly to the cloud in an effort to modernise environments, improve system reliability, and support hybrid work models, while addressing other new realities compelled by the pandemic.”

DANIEL COLE SENIOR MANAGING DIRECTOR FOR

The

Daniel Cole, Senior Managing Director for Financial Services at digital transformation consultancy Publicis Sapient, tells InsurTech Magazine: “Legacy platforms are inherently slow and costly to change, so it’s becoming increasingly difficult to build data and digitalenabled propositions. The nature of legacy platform development has historically meant customer, product and risk data is siloed and, whilst efforts have been made to patch over the challenges to improve processing and insight, this has quite often led to increasingly fragile and ill-understood solutions, exacerbating both the speed and cost of change.

“In personal lines, digital-first propositions require data and decisioning to be at the core, enabled by continuously optimised digital journeys in addition to flexible underlying products and services. Much of this is difficult to achieve through legacy technology – or, indeed, the platforms from the past 10 or 15 years that are becoming the new legacy.

“In commercial lines – particularly larger risks, and corporate and specialty –the underwriting journey generally lacks support from the legacy platforms in place today, as the dependence on data and insight has grown over time. The ability to effectively ingest and triage the data required for underwriting is, again, too slow and costly – and much is done outside of (or around) legacy solutions, often limiting the insight that can be drawn, or detracting underwriters from where their time can be best spent.”

How can cloud platforms help insurers?

Cloud-native platforms bring a number of key benefits that make them decisively attractive to insurance organisations: they are often cost-effective, allow for quicker deployment and scalability, offer advantages over risk management and data access, and they also make it simpler for insurers to launch new products and services, or customise existing products and services, to specific customer segments. All of this, in one form or another, will manifest in a better experience for the insured.

DATA IS SILOED”

DANIEL COLE SENIOR MANAGING DIRECTOR FOR FINANCIAL SERVICES, PUBLICIS SAPIENT

“THE NATURE OF LEGACY PLATFORM DEVELOPMENT HAS HISTORICALLY MEANT CUSTOMER, PRODUCT AND RISK

INSURANCE INDUSTRY CLOUD TRANSITION STARTED THROUGH INFRASTRUCTURE AND DATA MIGRATION…

IS GRADUALLY TRANSITIONING TO THE CORE PLATFORMS FOR DATA-CENTRIC CUSTOMER AND PRODUCT DEVELOPMENT”

DANIEL COLE SENIOR MANAGING DIRECTOR FOR FINANCIAL SERVICES, PUBLICIS SAPIENT

Publicis Sapient’s Daniel Cole continues: “Cloud-native platforms, together with welldefined architectures, the right tools and ways of working, have the potential to help insurers move quicker and cheaper whilst providing operationally resilient, scalable and secure solutions, so long as they are used in the right way.

“The insurance industry cloud transition started through infrastructure and data migration, as in many other industries, but is gradually transitioning to the core platforms for data-centric customer and product development. The development of new cloud-native insurance platforms, coupled with the plethora of digital and data platforms for the cloud, is gradually unlocking the potential – but there is still a long way to go.”

What’s the future of the cloud in insurance?

Last year, EY surveyed the CIOs, CTOs and cloud strategy leads at more than 70 European insurers to gauge their approach to cloud migration – both now and for the future. At that time, it found that half of respondents had migrated less than 10% of their operations onto the public cloud, with only 7% of insurers migrating more than 90%. This suggests that, even with the progress that will inevitably have come during the pandemic, there may still be an adoption gap among insurers in relation to cloud technology.

Summarising the findings of the survey, EY’s EMEIA Financial Services Insurance Technology Leader, Chris Payne, says: “Most insurers want to execute their public cloud roadmap. However, there’s also a substantial portion of respondents who want to develop a public cloud strategy as their number one near-future initiative. Our initial analysis shows that 80% of insurers that only offer life insurance have the execution of a public cloud roadmap in their top-three public cloud initiatives, much higher than insurers that operate in other lines of business like non-life and health.

“The second priority – building new, cloud-native applications – requires extensive technical knowledge. Insurers must be prepared to build capabilities in serverless computing and Infrastructure as Code (IaC), for instance, if they are to deliver on these initiatives.

“Almost 40% want to migrate legacy systems to the public cloud, which may require a rethinking of the strategy to benefit from cloud-native services. Large insurers comprise 80% of this group, which is not surprising given how legacy constraints limit digital transformation efforts.”

“THE

BUT

Payne continues: “The future for those insurers that can master public cloud adoption looks bright. Powered by advanced data analytics and AI, leading insurers can greatly increase their capacity for innovation and accelerate their speed-to-market with new products and solutions. According to EY NextWave Insurance research, the most successful will be able to position themselves as trusted ‘life and wellness concierges’, increasing customer retention by 30%.”

As weather patterns become unpredictable, the insights gained from historic data are losing their potency.

How is the insurance industry adapting?

WRITTEN BY: SAMMIE EASTWOOD

How does insurance manage a climate in crisis?

Following the UN Climate Change Conference (COP27) in November – a summit where political decision makers across the globe attend to discuss current environmental risks – climate change is once again at the top of everyone’s mind.

It’s a well-established fact that weather patterns are changing. More than ever, people are being caught off-guard by severe events at a magnitude not previously experienced. So, how does the insurance industry, whose entire model runs on detecting and reducing risk, manage the burden of climate instability? What problems do insurers face, what are they doing, and what more needs to be done?

How is climate change affecting insurance?

In recent years, cyclones have left thousands of Africans displaced. Rising temperatures have caused some of Australia’s worst-ever bushfires, destroying millions of hectares of natural habitats and homes. Droughts and floods have affected areas that were woefully underprepared. These are all events that require quick payouts from the insurance sector – and this is just the tip of the iceberg.

Under old insurance models, the impact of these sudden and catastrophic incidents would eventually render some areas uninsurable, increasing animosity between consumers and insurers while heavily impacting the economy, leaving devastated businesses unable to recover.

Insurers are not only affected by the physical risk (weather effects), they are also dealing with transitional risks (policy enacted by governments to combat these risks).

While physical risk poses the most direct threat to insurers, transitional risk is the most tricky, as it has the greatest potential to destabilise investments that affect the insurer's portfolio: just the announcement of an energy price cap in the UK caused the value of sterling to fall against the euro.

There is an outcry for financial institutions to take an active stance on climate change; it’s no longer something that the insurance sector can ignore.

HOW ARE INSURERS CURRENTLY MANAGING CLIMATE RISK?

Reinsurance and catastrophe bonds are used to protect and safeguard funds for specific incidences. By partnering with reinsurers who specialise in certain climate events and have a higher appetite for risk, insurance brokers can provide their customers with appropriate policies at more affordable prices. Catastrophe bonds allow funds to be locked away, accruing high-interest only to be released under certain circumstances, such as hurricanes. Not only does this provide insurers with immediate access to funds, but obligations to pay interest or repay principal is either deferred or forgiven, massively reducing the monetary burden on the broker.

Parametric insurance creates more affordable products as, similar to catastrophe bonds, these only trigger a payout if customers experience events of a set magnitude, rather than just covering losses. “It’s a win-win,” says Adam Rimmer, CEO of parametric insurance broker FloodFlash, “parametric insurance is the best and most efficient way to cover these low-frequency, highseverity events.” Parametric insurance removes the need for insurers to continually assess the risk every year, which somewhat alleviates dependence on unpredictable data.

Making smart IoT tools and funding climate technology help contribute to climate research and improve predictions. One insurer using technology to battle climate change is Reask. “We now have improvements in seasonal weather prediction [showing] 1-6 months ahead what the global state of the climate will be,” says CEO Jamie Rodney. The more insurers use monitoring tools, the cheaper and better-available they become.

Enforcing change at a policy level by leveraging products such as more preferable premiums for policyholders who use resilient construction materials that can better withstand a climate emergency. This can also include developing products that support and encourage policyholders while they transition their operations to low- or no-carbon solutions, moving insurance from ‘detect and repair’ to a ‘predict and prevent’ model that will help to increase climate resilience globally.

Providing warnings ahead of events is achieved by insurers using parametric devices as well as foresights from new forecasting technologies to raise the alarm on imminent climate emergencies. “We have a forecasting model that lets our customers know up to two days in advance when a flash flood is going to hit a property of theirs,” says Johnny Stubbs, Head of Partnerships at Previsico. This gives customers time to “put in place their action plan, they can move stocks and assets, their cars”.

Helping to educate customers and influence policy regarding the risks and what steps can be taken to prevent potential damages. Though many consumers still see insurers as the enemy, a major function of the industry is to educate consumers about how to reduce their personal risk, as well as influence government policy to ensure that public exposure is minimised. It’s the responsibility of the industry not only to adhere to policy, but to drive it.

JOHNNY STUBBS HEAD OF PARTNERSHIPS, PREVISICO

“

We have a forecasting model that lets our customers know up to two days in advance when a flash flood is going to hit a property of theirs ”

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Insurers need to look into methods that protect against chronic climate issues – like heat waves and soil degradation reducing crop yields, affecting safe working hours, or making livestock rearing more challenging.

They also need to build more in-depth weather forecasting tools that find patterns in unpredictable data to better predict what events could take place and where. This is not only to help indemnify themselves, but to warn their customers and reduce the damage of these catastrophic events as much as possible.

Insurers must review their investments to ensure that their portfolios are protected from climate risk such as changes in

ADAM RIMMER CEO, FLOODFLASH

energy prices, the housing market, supply chain disruptions, political uncertainty, and fluctuations in stock prices that are indirectly impacted by climate change.

The insurance sector has the potential to be at the forefront of the world’s climate change response, creating products, influencing policy and innovating with new technologies that could help to protect and shape the future of society. Not only will this impact their bottom line, but it could be the way to bridge the gap between insurers and customers.

“ Parametric insurance is the best and most efficient way to cover low-frequency, high-severity events ”

There’s still more to do…

The growth of insurtech has been driven by market demand and the power of investment. We round up the top 10 insurtech funders scaling the industry

WRITTEN BY: JOANNA ENGLAND

INSURTECH FUNDERS

INSURTECH FUNDERS

For the past decade, insurtech has scaled –and continues to scale – with significant speed. Demand in the marketplace, new technologies and mega investment have driven the industry to a new position of leadership within the insurance space. Digital insurance providers, ecosystem partners, underwriting, AI and API offerings, as well as the IoT and 5G, are resulting in the transformation of insurance as we know it. We round up the top 10 insurtech funders in the industry today.

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Launched in 2020, Aflac

Corporate Ventures is a Georgiabased venture capital firm that invests in early-stage technology companies and functions as the VC investment arm of Aflac, the American insurance company providing individuals and companies with supplemental disability insurance.

As a venture capitalist entity, Aflac Ventures' purpose is to invest in companies that are aligned with its parent company’s business interests in Japan and the US. To date, the VC arm has remained focused on investing in fintech, healthcare, the IoT, big data, and analytics.

Currently, the company has 14 investment partners, including Limelight Health, Coverhound and Betterment.

GV ( GOOGLE VENTURES )

As one would expect, Google Ventures – now rebranded as GV following its launch in 2009 – is a keen investor in all things techrelated. The entity’s prime focus is across several key industries, including Enterprise, Frontier Tech, Life Sciences and more.

With an expert team of computer scientists, engineers, and former entrepreneurs at the helm, GV concentrates on innovative startups and invests in innovative founders across industries, as well as optimising for ideas that demand long-term relationships.

Current companies partnered with GV include Lemonade, GoCardless and Docusign.

TRANSAMERICA

Based in Tokyo and founded in 2010, MS&AD Insurance Group Holdings is a Japanese insurance company with its core businesses including Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance.

The multifaceted group has a robust interest in the digital insurance space, recently throwing its weight behind the US insurtech Hippo with a $350mn injection of capital. MS&AD is also a partner of Direct Insurance Financial Investments, for whom it raised $77mn in funding. The company mainly deals with domestic life insurance, non-domestic life insurance, financial services and risk-related businesses.

One of the oldest and largest VCs to invest in the global insurance space, Transamerica was founded in San Francisco in 1928. It offers a number of products within the term, whole, and indexed universal life insurance categories.

Thus far, Transamerica has funded leading insurtechs such as Quantemplate, Coverfax and Acko. Although the firm recently sold its corporate venture portfolio to Montana Capital Partners, Transamerica will continue to work with portfolio companies. The transaction will further simplify Transamerica’s business, in line with Transamerica’s strategy to actively manage its portfolio of businesses, allocating capital to activities with a greater potential for an attractive return on capital, and where Transamerica is well positioned for growth.

Whenever you read the word Tencent as part of an investment round, you know the company in question will soon be at the head of its industry leaderboards. Based in Shenzhen, China, Tencent was launched in 1998, and is now a worldleading internet and technology company. The VC also operates its own insurance platform called WeSure, as well as investing in and acquiring other companies.

Currently, Tencent has significant capital interests in Clark, Sunday and Waterdrop.

05

OMERS VENTURES

Founded in 2011, OMERS Ventures has completed 137 investments and is a global early stage venture capital firm with offices in Toronto, Palo Alto and London. To date, the company has invested $850mn across the insurance industry and is considered a leading operator for scaling insurtechs to approach. Initially established in Canada as part of the current OMERS pension plan, OMERS Ventures’ portfolio companies include a wide range of consumer and B2B operatives. The VC also has extensive interest in both the US and Europe, recently leading a mega round with Europe’s biggest insurtech, wefox, in the world’s largest funding round to date. OMERS Ventures invested $400mn in the growing insurtech, and is also partnered with ClearCover and Foresight Group.

FINTLV 03

04

Launched in 2000, General Catalyst is a venture capital firm based in Cambridge, Massachusetts, with offices also in San Francisco, Palo Alto, London and New York City. The company specialises in earlystage and growth equity investments across several sectors, including insurance, software, transportation, and big data industries.

In 2022, the VC raised an impressive $4.6bn for its 11th general fund, which it will co-invest alongside the two healthcare funds in company creation, seed, earlystage and growth.

General Catalyst is partnered with insurtechs CertifyOS, Oscar, Loop Health and Lemonade.

Taking an impressive lead in the insurtech investment scene, FinTLV has already provided $941mn in capital to scaling insurtechs.

Founded in 2018 and based in Tel Aviv, Israel, the firm’s modus operandi is to invest in insurance and fintech companies based in the US, China, Europe, and Israel.

Currently, FinTLV is focused on all stages and its portfolio is specialised in insurance, with a robust global network of established insurance and reinsurance firms.

FinTLV counts Map, Sapiens and Next Insurance among its strategic partners.

ALMA

MUNDI VENTURES

Founded in 2015 by CEO Javier Santiso, Alma Mundi Ventures is a Spanish VC firm that focuses on early-stage technology startups that have B2B business models and are engaged in Series A or B funding.

Headquartered in Madrid, the company – which has invested $906mn so far in insurtech partnerships – also has an operational presence in Barcelona, London, and Seattle.

Alma Mundi Ventures has extensive experience with emerging markets, especially in Asia and Latin America, and the VC seeks out disruptive business models that are addressing new marketplace demands.

The company has a broad industry knowledge, hands-on approach and an impressive list of global relationships that have resulted in the investment of numerous insurtech founders and startups.

To date, Alma Mundi Ventures includes Element, Shift Technologies, Synthesized, bolttech, Gateway, Agnetero, and more as part of its extensive portfolio of insurtech partners.

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A BizClik Brand

G SQUARED

As the leading insurtech funder, globally, G Squared is responsible for catapulting a large number of insurtech providers into leading positions. Founded in 2011, G Squared partners with portfolio companies throughout their lifecycle using a fundamentally different approach to that of traditional VCs.

As a rule, G Squared also invests in companies that “challenge the status quo and demonstrate a clear path to superior returns, partnering world-class entrepreneurs tackling big problems”.

According to reports, the VC has invested funds in a number of household names such as 23andMe, Coursera, Instacart, Lyft, Pinterest, and Spotify. It also has contributed large amounts of capital to a number of disruptors including Asana, Blend, Bolt, Brex, Capsule, Flexport, Impossible Foods, Toast, and Turo. Insurtechs to

benefit from G Squared are CoverGenius, which received US$70mn, and Pagaya.