Tech to impact ‘every part’ of insurance

  • Future thoughts: Bror Muller, left, Kara Swisher, Ben Rose, Cedric Edmonds, Sean Bourgeois and Ari Chatterjee, who discussed how technology is reshaping the insurance landscape during ILS Convergence (Photograph by Scott Neil)

Blockchain and artificial intelligence will reshape much of the insurance industry, but there should also be far more gender and race diversity across the sector.

Those were two of the points raised during a discussion on “technology shaping industry” at ILS Convergence 2018.

Kara Swisher, an American technology journalist and cofounder of Recode, the technology news website, said the likes of artificial intelligence would significantly impact the insurance and reinsurance landscape.

“It strikes me that insurance is mostly about data and pattern-matching. So every part of your business is going to be affected by AI, or whatever. Every part of your business could be replaced and affected,” she told delegates at the two-day conference.

“I understand the human element, but a lot of this stuff is pure data that should be able to be managed eventually by AI or bots.”

She said the real issue was about getting started and using the new technologies.

“It is hard to know what companies are willing to make these changes, but the changes will be made for them as new types of insurance companies come along. It has been attempted, and hasn’t been wholly successfully, but it will be [eventually] because directionally it is correct.”

Ms Swisher, who also gave a keynote speech on the first day of the conference, joined a technology panel for the question and answer segment that followed short presentations on the Internet of Things, blockchain and ILS, and cyber reinsurance.

Moderator Bror Muller sought views on what the make-up of insurance industry teams would be in the wake of the adoption of the new technologies. He noted the relatively high percentage of men in the conference room and asked how the insurance and technology sectors could attract more women and “empower those future women leaders”.

Ms Swisher said there was an obvious business argument for diverse cultures in the workplace but that did not seem to work or be enough. It did not make sense to her that great groups of people were being “zeroed out” when there is “so much need for intelligence”.

She added: “Pattern-matching happens. I use this expression that in Silicon Valley they think it is a meritocracy when it is a mirrortocracy — they are comfortable with themselves.” She explained that meant deals being made in bars or during games of golf, and mentioned the lack of parental leave as another obstacle that hindered women.

Ms Swisher also said: “It makes it impossible for women and people of colour; it is like a tax they pay. They carry a 50lb backpack and then men say ‘why are you so slow?’”

The journalist, who has worked at The Wall Street Journal and The Washington Post, said there are “really good men who don’t know that all the women have stories. The men do not know about the stories because of a weird communication disconnect. You don’t want to call all men awful — but there is some communication or empathy disconnect”.

Ben Rose, of Aon Inpoint, who was on the panel, said there was a generational aspect. He identified as being part of the millennial generation, then added: “But I’m not a complete millennial. I don’t use Snapchat or Instagram or anything like that — and people who do are able to think in very different ways, and you start to ask what would insurance look like based on a Tinder model. People need to think about things in more creative and different ways.”

He said that when he joined the insurance industry, he was one of the few people he knew who did not have an older relative in the industry to gently welcome them in, despite that being the “normal way” to come into the industry.

“When you do get in, you sit in a chair and wait for the person next to you to die [to succeed them] — 30 years of waiting. I’m not sure that’s the best way to bring insight.”

Another on the panel was Sean Bourgeois, founder of Tremor Technologies Inc. He said the company had an advantage as it was new. He said: “We started two or three years ago. We don’t have that dynamic of a chair that someone is waiting to fill.

“We are 60 per cent women, and that includes our engineers. It is not really from our perspective to be idealistic, it really is that we believe a diversity of opinion and approach is going to be profitable.”

On the question of what new technologies the insurance sector should be using, Ms Swisher said blockchain was “directionally correct” for the industry.

Expanding on that, Mr Bourgeois said: “The challenge the industry has is that there is nothing centralised, so there is nothing to decentralise, especially in wholesale reinsurance. You have this dynamic where there are silos of information.

“When marketplaces start to form and you start to have centralisation, from that point it makes it a lot easier to decentralise. It’s a little counterintuitive, but that is the path for things like blockchain happening.”

Also speaking at the session was Ari Chatterjee, chief underwriting officer of Envelop Risk Analytics, and Cedric Edmonds, of Solidum Partners.

ILS Convergence 2018, which attracted about 300 delegates, was held at Hamilton Princess and concluded yesterday.