Chairman, Institute of Risk Management
Traditional insurance providers have been busy in recent years implementing Solvency II and strengthening their balance sheet after the financial crisis, but now they have their Fintech rivals in their sights.
The insurance industry is finally waking up to the opportunities from disruptive technology to improve efficiency and customer service.
Chairman of the Institute of Risk Management, Jose Morago, says the traditional conservative culture within many insurers towards automation is changing and investment in technology is increasing.
“There is a genuine willingness to tackle digital transformation but there are practical challenges such as legacy systems and moving data to the cloud,” says Morago. “Insurers need a clear vision and a practical strategy, with well-defined outcomes for the next five years.”
He adds that insurers need to know which parts of their operations would benefit the most from automation or data analytics.
Morago, who is also group risk director at Aviva, says consumers interacting with insurance companies today expect the same slick digital service they get from digital leaders such as Google or Facebook.
“Insurers are very good with structured data but not so strong when analysing unstructured data to help them to understand their customers’ needs,” he says. “The industry’s capabilities need to improve with new talent from the technology sector, such as data scientists.”
Insurers that are wary about launching new digital products and services can take advantage of the FCA’s new regulatory sandbox. This ‘safe space’ lets companies test new ideas in a live environment without the usual regulatory consequences.
“New digital and Data capabilities are critical for adapting to the new technology and confronting new entrants in the sector in the next few years, but insurers need to be confident about the business outcomes if they are to invest in them,” says Morago.