In a wide-ranging conversation with Lisa Pollina, Senior Advisory Board member at Oliver Wyman, Dan Glaser, President & CEO of Marsh and McLennan Companies discussed the role insurance will play in the future as well as how new technologies like artificial intelligence and machine learning may reshape the industry. Glaser brought the CEO perspective to discussions on how the insurance industry is meeting the opportunities and challenges brought by unprecedented technological change.
Turning directly to MMC’s recent $5.6 billion acquisition of UK based Jardine Lloyd Thompson Group PLC, Glaser anchored his remarks to a theme that recurred throughout the discussion – that insurance is a people business. The JLT acquisition, Glaser noted, was fundamentally about talent. In that light, he doesn’t agree with those who see wholesale automation across the industry. For him, “bots” can never really replace the judgment of brokers. His view is that the new insurtech advances will supplement, rather than eliminate existing jobs, providing new ways to serve clients and to enhance the customer experience.
Of course, these changes don’t take place in a vacuum, and as a global company with offices in more than 100 countries, current events like BREXIT loom large. We live in a VUCA world, Glaser said, using an acronym that captures the volatility, uncertainty, complexity and ambiguity of today’s global environment. But there will always be challenges, and having been around for 150 years, MMC is playing for the short, medium, and long term. Reacting to a question about buying JLT in the face of BREXIT, Glaser said so far as he’s concerned, the UK remains one of the best places to do business.
As a 35-year insurance industry veteran, Glaser remains philosophical about the ways in which advances like artificial intelligence and machine learning may change the business. He recalled when email was touted as a proprietary advantage. But no longer, of course. The same applies to data centers, which every company has, but which may in time move outside. Ultimately, Glaser thinks there will be some big players and companies will buy artificial intelligence and machine learning packages to apply to their businesses.
Questioned about the industry’s nimbleness in the face of these changes, Glaser pointed to the industry’s core creativity and responsiveness in its formulation of new products, like terrorism, cyber and supply chain insurance, and said he believes the industry gets a bad rap on innovation when the industry has constantly innovated. He reminded the audience that beyond protecting against the downside, insurance is actually a great enabler: There’s very little innovation and investment that can happen without insurance. Insurance has money and it has clients and it’s open to the world.
Nevertheless, we live in turbulent times. “As I travel the world, I see a lot of anxiety,” he said, adding that people are worried about losing their jobs to new technologies, and there are global challenges and risks like climate change, water scarcity, trade conflicts, and other geo-political tensions. The world is in flux and a new age of risk has just begun, he said. At the same time, he’s excited: the best solutions have yet to be invented, and new forms of risk will need new forms of insurance.
On InsureTech Connect 2018, Glaser summed up, “I’ve come every year. I come because of the vibrancy of the place.”