Day 2 of InsureTech Connect 2018 saw continued energy and engagement among the nearly 6,000 participants across a range of topics that explored the intersection of technology and risk.
The quality of the discourse remained focused and high. Starting with plenary sessions that included MMC President & CEO Dan Glaser’s perspectives on the future of the insurance industry during tumultuous times on the marquee stage, the content-rich discussions continued through the close of the day, both in the exhibition hall among the more than 175 exhibitors or in the two-dozen “pathway” sessions across topics like digitization, collaboration, innovation, implementation, and proliferation.
Oliver Wyman again sent teams to each of the sessions, and here's three we thought worth calling out:
Bringing Distant Lands Close: India. In one sense, the P&C insurance market in India is really old. The oldest existing insurance company in India is the National Insurance Company , which was founded in 1906, and is still in business.
But looked differently, the market was closed to the private sector until 2001. Until 2007, pricing and tariffs were state controlled. So, in another sense, the P&C insurance market in India is only a decade old.
That seemed to be the perspective on a panel comprised of executives from two innovative Indian InsurTech startups - Coverfox and Acko. While Coverfox is tackling the challenge of distributing insurance products to a population that is 95% offline, Acko is going after underwriting and pricing innovation. Acko also recently received a multi-million-dollar investment from Amazon.
A market as big and diverse as India obviously presents plenty of challenges and opportunities. Here are a few of our takeaways from the session. First, given the cultural, language, and income diversity, it is naive to think of India as one country. It’s better seen as amalgamation of thousands of customer cohorts, and any new-age product should think about offering a seamless experience to these different cohorts. Second, while there is a safety net for the bottom of the pyramid in India, the middle class is under-protected. Less than a million people buy whole life covers. 90+ percent of the population pays out-of-pocket for medical expenses. This is a harsh and sobering reality, but also a demonstration of a tremendous opportunity. Finally, given how recently the Indian insurance market has opened up to private players and “de-tarrified” from government prices, there is an opportunity for massive disruption across the value chain - from distribution to product underwriting to claims.
The Indian insurtech space is certainly an exciting one, and we’ll be sure to closely follow it in the coming years.
API-ification of insurance. Data sharing via APIs between various market participants and along the value chain is critical to transforming the insurance industry and generating opportunities for start-ups as well as incumbents. The fragmented regulatory landscape and continued reliance on legacy systems means that data (policyholder information, risk limits, etc.) in insurance is less readily available and accessible compared to other industries (even in financial services), which makes it difficult to put this information to work. APIs will enable real-time information sharing at all stages of the product life cycle and drive superior distribution, underwriting and claims results and will allow carriers and service providers to respond more flexibly to policyholders’ individual (and constantly changing) coverage requirements. Ben Narasin, a veteran early stage fintech investor, believes that API-based data sharing within and outside of the insurance industry will drive the next growth spurt in innovation.
CIO Roundtable: Building a Successful InsurTech Strategy. In this session, sponsored by ITC, Celent, and Oliver Wyman, 30 CIOs and other senior insurance executives gathered to discuss strategic questions around technological change and partnership with InsurTechs. Attendees focused on how they think about partnerships, where they agreed that previous partnership vetting standards (e.g. required experience) needed to be softened to embrace the upside of working with startups, and that startups tend to be quite amenable to adapting their core competencies based on the needs of incumbents. Later, on the topic of how to prioritize IT projects, several attendees noted the need to resist passively replacing legacy systems, and instead shrewdly pursue select system replacements based on a well-defined desired end-state. Regarding talent acquisition for such initiatives, a number of executives noticed that once several non-traditional tech hires (e.g., data scientists) had been brought into the organization, a tipping point was reached after which it became much easier to continue attracting tech talent.
To keep up with the latest at ITC and beyond, be sure to follow Oliver Wyman on Twitter (@OliverWyman), LinkedIn , Facebook and Instagram (@oliverwymanconsulting). We are also tracking #OWInsurTech and #ITC2018.