Pleasanton, CA (PRWEB) April 03, 2017 -- In late March, Neosurance, a one-year-old company developing a mobile insurance sales solution, was selected by Plug and Play—said to be the most important startup accelerator worldwide—for its program in the Silicon Valley Tech Center. Neosurance, along with 25 other startups, will take part in a three-month program meant to give a significant boost to its business through intensive interaction with corporate partners and venture capitalists. Official corporate partners include Aviva, Allianz, Markel, Farmers Insurance, Munich Re, Swiss Re, Nationwide, The Hartford, Talanx, Travelers, Zurich, HDI, USAA, AON and numerous others.1
Michael Macauley, CEO of Quadrant Information Services, a leading supplier of pricing analytics services to property and casualty insurance carriers, said, “This is just one example of a worldwide trend. Technology designed for the insurance industry, or insurtech—a term virtually unknown five years ago—has recently emerged as one of the hottest areas in business technology development and venture capital funding.”
One indication of the level of interest in insurtech is the mushrooming number of international conferences and trade shows dedicated to the subject. In San Francisco this spring, the Silicon Valley Insurance Accelerator is sponsoring Core Systems InsurTech Fusion2; other major upcoming events include InsurTech Conference 2017 in London in September,3 and InsurTech Connect 2017 at Caesar’s Palace in Las Vegas in early October.4
In addition to Silicon Valley venture capitalists, major insurance firms are creating their own VC divisions and investing in insurtech startups. By investing in these fledgling companies, insurers hope to get an early look at technology that could change the industry and have the opportunity to experiment with new products or services—as well as putting themselves in a position to make offers for any startups they see as particularly promising. Among U.S. insurers that have established venture arms are MassMutual, Transamerica, and American Family; overseas insurers with venture capital operations include Axa, Allianz, XL, and China’s Ping An.5
One of the most notable, and potentially most disruptive, aspects of the drive towards new technology in insurance is the use of massive high-speed data analysis—big data—in evaluating risk and assigning rates. Where an enormous amount of information on consumers is already available, the traditional qualifying insurance questionnaire may become unnecessary. Andrew Brem, chief digital officer at Aviva, commented, “Buying insurance is ridiculously retrograde, with endless questions resulting in a quote. With the use of big data, we are discovering interesting and accurate predictors of risk that do not involve asking people questions.”6
Macauley noted that this makes perfect sense, and in areas such as health and auto insurance, where telematics are being used to monitor policyholders’ fitness patterns or driving habits, it’s already widely accepted. There is, however, resistance to the use of at least certain types of consumer data. In late 2016, for example, second thoughts by Facebook forced Admiral to abandon a plan to use the language people used in Facebook quotes to evaluate how dangerously they would drive—and thus what they should be charged for insurance.7 How social media data can and will be used in risk evaluation is a question that’s yet to be resolved.
Macauley also pointed out that another unresolved question has to do with future industry staffing requirements. A recent McKinsey & Co. report, for example, estimated that automation could leave up to 25% of the insurance industry’s positions consolidated or replaced over the next decade,8 a view echoed by numerous other industry observers.9 On the other hand, a recent PwC survey suggested that 77% of global insurance CEOs see the limited availability of key skills, exacerbated by the aging of much of the insurance workforce, as a threat to growth.10
“As an industry—and as a society—we’re learning as we go,” Macauley said. “There are very exciting possibilities opening up, and—for privacy and other reasons—there are going to be limits to how far the exploration of those possibilities can go. We can see the general outlines of the future, but we can’t be entirely sure of the details. What’s important is to understand that our industry and our world are changing. We can’t just sit back and let that change happen to us; we need to be an active part of it.”
About Quadrant Information Services:
Quadrant Information Services, headquartered in Pleasanton, CA, provides pricing analytics solutions for property and casualty insurance companies. Quadrant gives actuary, product development, pricing, sales and marketing personnel at its client companies—which include all the major insurance carriers in the United States—the data they need in order to make accurate, data-driven decisions. An industry innovator since its founding in 1991, Quadrant has provided the P&C insurance field with a long series of technological advances, including InsureWatch, the industry’s first cloud-based pricing tool, which allows the user to produce unlimited combinations of reports with the click of a mouse. For more information, and to learn why Quadrant is for insurance companies that are tired of losing the right customers and winning the wrong ones, please visit http://www.quadinfo.com.
1. “Neosurance Selected for Plug and Play’s InsurTech Acceleration Program,” Let’s Talk Payments, March 25, 2017. https://letstalkpayments.com/neosurance-selected-plug-and-plays-insuryech-acceleration-program/
2. “InsurTech Silicon Valley Core Systems InsurTech Fusion, March 29-30,” Silicon Valley Insurance Accelerator. http://sviaccelerator.com/insurtech-sv-core-systems-insurtech-fusion/
3. http://insurtechconference.com/
4. http://insuretechconnect.com/
5. Ralph, Oliver, “Investors view insurance as staid and ripe for disruption,” Financial Times, October 2, 2016. https://www.ft.com/content/9355751e-81b0-11e6-8e50-8ec15fb462f4
6. Ralph, Oliver, “Insurance and the big data technology revolution,” Financial Times, February 24, 2017. https://www.ft.com/content/bb9f1ce8-f84b-11e6-bd4e-68d53499ed71
7. Ruddick, Graham, “Facebook forces Admiral to pull plan to price car insurance based on posts,” The Guardian, November 2, 1016. https://www.theguardian.com/money/2016/nov/02/facebook-admiral-car-insurance-privacy-data
8. “How Automation Will Whack Up to 25% of Insurance Jobs,” Insurance Journal, February 1, 2017. http://www.insurancejournal.com/news/national/2016/02/01/397026.htm
9. Scarola, Cory, “Six Jobs Automation Will Eliminate,” Inverse Innovation, March 6, 2017. https://www.inverse.com/article/26965-what-types-of-automation-lead-to-job-loss
10. “Re/insurers struggle to attract necessary tech-savvy talent,” Intelligent Insurer, March 24, 2017. http://www.intelligentinsurer.com/news/re-insurers-struggle-to-attract-necessary-tech-savvy-talent-11454?utm_source=Insurance&utm_campaign=884cf6df04-Intelligent_Insurer_Daily_24_03_2017&utm_medium=email&utm_term=0_f246694353-884cf6df04-27496945
Karla Jo Helms, JoTo PR, +1 (888) 202-4614 Ext: 802, [email protected]
SOURCE JoTo PR
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