Brokers and insurers from the London Market met to discuss one of the most talked-about current topics – InsurTech. The event was well-received, with participants sharing their pragmatic views on the current and future ‘state of play’. In this blog, r10’s Senior Advisor Silvi Wompa Sinclair shares her key takeaways:
1. We don’t know much about each other – let’s do something about it
Incumbent industry players and InsurTech companies are worlds apart – ranging from basic things like vocabulary (tech stack or scratch, anyone?) and culture (fear-of-failure vs. fail-fast-pivot-fast) to key business aspects like choice of business model (end-to-end vs. value pools) and social impact ambitions. No wonder we are grappling to understand each other and get to know each other. There is a strong desire to bridge the knowledge gap – through education on both sides – as well as through a more curated approach to business “speed-dating” and introductions.
2. Use tech to solve real-world business problems – not to seem cool
These days, the word “innovation” get thrown around a lot by incumbent industry players, and everybody wants a chatbot of their own. But underneath the glittering surface, a much less attractive reality emerges – one of huge cost challenges, decreasing relevance and failure to understand and predict new loss patterns. Our attendees agreed that the “tech” in InsurTech should be used to address the industry’s most pressing business needs – not to seem “cool” while continuing to sweep a crumbling infrastructure under the carpet. As one event participant put it:
“When the aviation market had failed to deliver profitability for a number of years, everyone pulled out of it – as if underwriting is nothing but a static light switch that you flip on and off. What if someone instead had stepped up to the challenge by redefining how aviation risks are underwritten? Rather than simply abandoning the area – introducing new data sources, new AI-powered pricing models or new tech-enabled risk management practices?”
3. Innovate to survive – embrace the sense of urgency
“If there’s a will there’s a way”, the saying goes. The London Market needs to find its way fast, or risk irrelevance and accelerated decline. Lloyd’s Blueprint One is certainly a step in the right direction, but will it move a marketplace that by tradition is more accustomed to debating than to resolutely making and enforcing painful – yet necessary – decisions?
A very basic, but crucial, example brought up by the audience was that of data standards and data sharing. In the US, the regulator has set the standards which all market participants must comply with in order to trade. By comparison, in London everyone sets their own requirements rather than looking at the big picture – sub-optimising the value potential available through modern data analytics. This begs the question of urgently clarifying Lloyd’s role going forward – marketplace or regulator?
Innovation is no longer an item of luxury for the London Market, but a necessary tool for long-term survival. Breathe through the pain and embrace the urgency!
Author: Silvi Wompa Sinclair