A golden day for insurance: Celent 2016 Model Insurer winners

In the historic Museum of American Finance, surrounded by golden exhibits including gold bars, a gold Monopoly game and even a gold toilet(!), the 2016 Celent Model Insurers were announced yesterday.  Part of our annual Innovation and Insight Day, we had over 150 insurance professionals in attendance (and over 300 in total), it was a great day for networking, idea sharing, learning about award winning initiatives and hearing inspiring speakers talk about the future of financial services. 

Yaron Ben-Zvi, CEO and co-founder of Haven Life, was the Model Insurer key note speaker. He discussed how Haven is using technology to reach a younger, digital-savvy customer with a life insurance experience that meets their expectations. He spoke about the journey from ideation to reality for their term insurance products which can be purchased online in only 20 minutes. He encouraged the audience to “think big but start small” and to apply the learnings along the way.

The Haven Life presentation was followed by the main event, the announcement of the 2016 Model Insurer winners. Every year, Celent recognizes the effective use of technology projects in five categories across multiple business functions.  We produced our annual Model Insurer Case Study report which clients may download here.  This year there were fifteen insurers recognized including Zurich Insurance, the Model Insurer of the Year.  Here are the winners: 

Model Insurer of the Year   

Zurich Insurance: Zurich developed Zurich Risk Panorama, an app that allows market-facing employees to navigate through Zurich’s large volumes of data, tools and capabilities in only a few clicks to offer customers a succinct overview of how to make their business more resilient. Zurich Risk Panorama provides dashboards that collate the knowledge, expertise and insights of Zurich experts via the data presented.

Data Mastery & Analytics

Asteron Life: Asteron Life created a new approach to underwriting audits called End-to-End Insights. It provides a portfolio level overview of risk management, creates the ability to identify trends, opportunities and pain points in real-time and identifies inefficiencies and inconsistencies in the underwriting process. 

Celina Insurance Group: Celina wanted to appoint agents in underdeveloped areas. To find areas with the highest potential for success, they created an analytics based agency prospecting tool. Using machine learning, multiple models were developed that scored over 4,000 zip codes to identify the best locations.

Farm Bureau Financial Services: FBFS decoupled its infrastructure by replacing point to point integration patterns with hub and spoke architecture. They utilized the ACORD Reference Architecture Data Model and developed near real time event-based messages.

Innovation and Emerging Technologies

Desjardins General Insurance Group: Ajusto, a smart phone mobile app for telematics auto insurance, was launched by Desjardins in March 2015. Driving is scored based on four criteria. The cumulative score can be converted into savings on the auto insurance premium at renewal.

John Hancock Financial Services: John Hancock developed the John Hancock Vitality solution. As part of the program, John Hancock Vitality members receive personalized health goals. The healthier their lifestyle, the more points they can accumulate to earn valuable rewards and discounts from leading retailers. Additionally, they can save as much as much as 15 percent off their annual premium.

Promutuel Assurance: Promutuel Insurance created a new change management strategy and built a global e-learning application, Campus, which uses a web-based approach that leverages self-service capabilities and gamificaton to make training easier, quicker, less costly and more convenient.

Digital and Omnichannel

Sagicor Life Inc.: Sagicor designed and developed Accelewriting® , an eApp integrated with a rules engine; which uses analytic tools and databases to provide a final underwriting decision within one to two minutes on average for simplified issue products.

Gore Mutual Insurance Company: Gore created uBiz, the first complete ecommerce commercial insurance platform in Canada by leveraging a host of technology advancements to simplify the buying experience of small business customers.

Operational Excellence

Markerstudy Group: Markerstudy implemented the M-Powered IT Transformation Program which created an eco-system of best in class monitoring and infrastructure visualization tools to accelerate cross-functional collaboration and remove key-man dependencies.

Guarantee Insurance Company: In order to focus on their core competency of underwriting and managing a large book of workers compensation business, Guarantee Insurance outsourced its entire IT infrastructure.

Pacific Specialty Insurance Company: Complying with their vision is to become a virtual carrier, meaning all critical business applications will be housed in a cloud-based infrastructure, PSIC implemented their core systems in a cloud while upgrading infrastructure to accommodate growth in bandwidth demands.

Legacy Transformation

GuideOne Insurance: GuideOne undertook a transformation project to reverse declines in its personal lines business. They launched new premier auto, standard auto, and non-standard auto products, as well as home, renter and umbrella products on a new policy administration system and a new agent portal.

Westchester, a Chubb Company: Chubb Solutions Fast Track™, a robust and flexible solution covering core business functionality, was built to support Chubb’s microbusiness unit’s core mission of establishing a “Producer First,” low-touch mindset through speed, accessibility, value, ease-of-use and relationships.

Teachers Life: Teachers Life has achieved a seamless, end-to-end online process for application, underwriting, policy issue and delivery for a variety of life products. Policyholders with a healthy lifestyle and basic financial needs can get coverage fast, in the privacy of their own homes, and pay premiums online in as little as 15 minutes.

The quality of the submissions this year is a clear indication the industry is turning a corner and embracing transformation, digital initiatives, innovation and valuing data analytics.  It is inspiring to see the positive results the insurers have achieved and a pleasure to recognize them as Model Insurers for their best practices in insurance technology.

How about your company? As you read this, are you thinking of an initiative in your company that should be recognized? We are always looking for good examples of the use of technology in insurance. Stay tuned for more information regarding 2017 Model Insurer nominations.  

 

Troll insurance, cyberbullying, and millennials

As I read through my myriad of promotional mail, I came across an interesting insurance offering – troll insurance. Chubb, a multinational insurance company, is offering its clients in the UK the first ever troll insurance. Chubb personal insurance policy holders will be able to claim up to £50,000 (approximately US$75,000) towards expenses that include professional counseling, relocation due to online abuse, or time spent off work due to cyberbulling. Cyberbullying is defined by the insurer as three or more acts by the same person or group to harass, threaten or intimidate a customer. The inclusion of cyberbullying into Chubb’s policies is a result of a survey of the target audience and brokers. Although the new policy is primarily tailored towards worried parents, adults who become victims of online abuse will also be covered. The policy money can be used to pay a reputation management team that would restore the person’s public image, or even to hire a forensic specialist to trace the origins of the trolling. However, the coverage is pricey. It can only be purchased as part of Chubb’s top-of-the-line home insurance package which costs at least £2,500 ($3,730) per year and is targeted at high-net-worth individuals. While I find it unfortunate that this type of insurance is required, I applaud Chubb for creating an innovative product to cover a gap in the current insurance offerings. Online harassment has real consequences, but the law against it tends to be hit or miss. Ironically, a few American insurers have policies pertaining to cyberbullying, but they protect people who are accused of the offense rather than the victims or harassment. Insurers continue to look for ways to be relevant to the Gen-Xers and Millennials in the marketplace. Chubb’s troll insurance provides a coverage that is relatable to these tech savvy demographics. It’s time for this insurance in North America as well.

Insurers are investing in data scientists

A few weeks ago I described a few results of a survey we have launched during the last quarter of last year around the role and importance of data in insurance. My blog post can be found here. Since then we have published a report summarizing the findings of this survey that our members can find here. An interesting trend we identified based on this survey was the need for insurers to hire more data scientists with advanced degrees and strong background in data and computer science. Indeed we think technology is not enough nowadays and insurers need to also invest in people with deep skills in this domain. I recently came across the following article from INN: Sentry Insurance Gifts $4 Million to Grow Data Science. It seems to validate our findings and I expect to see more of these kinds of initiatives going forward.

Rethinking the role of the intercap

The trend-naming fashion of capital letters in the middle of words continues. I believe those “InterCaps”—also known as “BumpyCaps” and “CamelCaps”—are mostly a marketing trick intended to make terms sound important. I find them annoying. The hot example of late is FinTech. Plus its close cousins, BankTech, InsurTech, and RegTech. They’re popping up everywhere, including within the hallowed halls of Celent. We are all guilty of putting a new veneer on something that has been around for ages. What does that capital T in Tech imply, and why do the terms get such rapt attention? Is applying technology to the business of financial services new, and more worthy of our attention today than it was years ago? Is how we manage new technology fundamentally changed? I don’t think so. Maybe the point is to let us collectively off the hook for pursuing technology change so casually (was that it?) for the last 50 years. I can imagine the bank or insurance CIO, late in his/her career, saying, “Hey, if we had FinTech 30 years ago, this place might look a damn sight different by now!” Right, that’s what we were missing: Technology startups! Youngsters in hoodies! The truth behind technology and the financial services industry requires no such defense. Changing the world through application of technology didn’t depend on the arrival of startling new tools, or dorm room genius, as helpful as those might be in today’s world. It required a risk/reward shift. As an industry, we didn’t change because we didn’t have to. Our existence was not threatened by new consumer behaviors. Our livelihoods were not at risk from upstart competitors. We took a hard look at the costs and benefits of new technology, and behaved accordingly. Which meant…changing…slowly. But something is certainly different today. I believe that existential threats are emerging for our industry. We are now at risk. I’m firmly convinced that relationships between consumers and their financial providers are changing, with the industry’s participation or without it. There is a new dynamism, and it is clear that the entire ecosystem is feeling the impact. Instead of looking at FinTech and all the other Techs with an annoyed editor’s eye, maybe I should embrace the way intercaps communicate something important. They’re a stylistic irritation. But they’re also a visual cue that helps us rethink technology. And that is sorely needed in these times of powerful disruption.

One prediction for 2016 is about to come true – our event on February 3rd

With just under a week to go until our event at The Magic Circle in London is on February 3 I though it worth reflecting on 2016 and the folly of predictions in today’s world. One of the key challenges for any organisation trying to respond to an unpredictable future is the hockey-stick graph or geometric growth that is increasingly describing adoption and the impact of technology on our society. That is to say that the figures stay relatively flat and predictable and then grow out of all proportion to what went before. Adoption of the Internet is a good example, the rise of the smart phones and that of tablets is another. Some may still argue that wearables as a fad has passed, citing them being around for a while but not really seeing the growth one would expect. Perhaps though, this is the false sense of security brought by the flat bit of the graph? The same is true of self-driving cars, a concept that’s been alive and well in Hollywood and on TV shows for decades (anyone remember the Hoff and Kit?) and is only now starting to creep onto real world roads. If the trends of cheaper and ubiquitous technology continue then these trends could at some point see that hockey stick moment, that massive growth in adoption and impact. For insurers – just reacting may not be good enough, instead perhaps it is worth spending time thinking: it is only a matter of time until it is ‘normal’ for clothes and accessories to be internet connected, for cars to drive themselves and for people to live longer through better management of their health. This is precisely the type of thinking we’re hoping to bring to our event, which will be a mix of folks who are on the curve of some of these changes and also some tools to help insurers plan and respond. So while I’m waiting for my Internet connected suit to come along (not that fanciful, you can already get connected yoga-pants and nappies that tweet) and the car that drives me to work – I look forward to spending some time those of you can attend our event next week to discuss the future of insurance and to ask the question, What if … ?

US patents in 2015 – who are the leaders?

I thought this chart from the firm Statista was interesting and topical given my post from last week. What particularly caught my eye was their observation that IBM is number one for the 23rd straight year. In addition, over 2,000 of their patents focus on cloud computing and cognitive computing, both areas of particular interest to insurance and the broader financial services industry. And for those that wonder (like me), Apple was in 11th place, just 18 patents short of 10th.   Infographic: Top 10 U.S. Patent Recipients | Statista You will find more statistics at Statista

Silicon Valley? No, Chilecon Valley

In previous blog posts regarding fintech in Latin America my position was, and remains, that one of the reasons for being behind is that it lacks of a “Silicon Valley” equivalent. Efforts to create a fintech ecosystem, as Finnovista is doing, become a good alternative to overcome the absence of a geographical pocket of innovation. Particularly consider the market fragmentation of Latin America comprised by 19 countries, some of which have 3M inhabitants to Brazil having +200M. People in most countries may speak the same language but markets are far from being similar just for that. Under (or against?) these circumstances, Chile is working to become Latin America’s Silicon Valley. One of its most attractive initiatives is “Start-Up Chile”, created four years ago to transform the Chilean entrepreneurial ecosystem. It began with a question: “What would happen if we could bring the best and brightest entrepreneurs from all around the globe and insert them into the local ecosystem?” The initiative offers work visas, financial support, and an extensive network of global contacts to help build and accelerate growth of customer-validated and scalable companies that will leave a lasting impact on the Latin American ecosystem. The idea is to make the country a focal point for innovation and entrepreneurship within the region. Start-up Chile, with only four years, is a start-up itself but it has a good starting point and great potential:
  • Chile has demonstrated for years its entrepreneurial spirit, with Chilean companies competing successfully in various industries (air transportation, financial services, and retail, just to mention a few) and a stable economy.
  • This year two Chilean start-ups were the winners of the BBVA Open Talent in Latin America: Destacame.cl, aiming to financial inclusion by creating a credit scoring based on utility payments; and Bitnexo which enables fast, easy and low cost transfers between Asia and Latin America, using Bitcoin.
While other countries and cities in the region are working in offering support to start-ups, it seems Chile is leading the way. Hopefully this triggers some healthy competition in the region, which in the end will benefit all. In the meantime, let’s meet at Finnosummit in Bogota – Colombia next February 16th. Join financial institutions, consultants, tech vendors, startups and other digital ecosystem innovators, to learn how startup driven disruption and new technologies are reshaping the future of financial services in the region. Remember to use Celent’s discount code C3L3NT20% for a 20% discount on your conference ticket.  

Predictions of Christmas past

The speed of technology change is presently both amazingly fast and disappointingly slow. This paradox arises from seemingly huge shifts in technology regularly occurring over the last decade and a half but slow realisation of these in industry. Of late I have personally felt that things aren’t moving quite as quickly as I expected. Since we’re at the end of the year and the holidays are a great to reflect and review how things have gone I thought it worth going back a little and looking at some of Celent’s predictions from 2012. The image below summarises some of the predictions Celent used to highlight just how much change could occur in the following eight years. How much of it has proven to be accurate? Celent Predictions Printing human organs with a 3D printer was a topic of active research in 2011 and the topic of a TED talk. Still a topic of active research and still some years (possibly decades) until we’ll be getting replacement printed hearts and ears. That said, doctors in the US did save a two year olds life with a man made windpipe in 2012. In this case the ambiguous commercial space flight referred to the then-likely space tourism although the efforts of SpaceX have pre-empted the space tourism industry by some years. SpaceX was the first private company to complete a delivery to the International Space Station in May 2012 and made a delivery beyond Earth’s orbit in 2015. Widespread use of 3D printing was another suitably ambiguous phrase. In 2015 every home certainly doesn’t have a 3D printer although the devices are widely used in prototyping activity and are regularly found in increasingly popular innovation labs. The price of 3D printers is coming down to the level where other devices such as home printers and microwaves started to become popular – but the killer application is perhaps missing. Social commerce referred to the seemingly inevitable integration of retail directly into popular social platforms. While retail websites have adopted social features Facebook has not surpassed Amazon in terms of retail, indeed the leading social networks are still advertising platforms and not retail platforms, despite rumours over the last 3 years social networks still don’t have payments integrated in. A prediction firmly not realised. As regards the battery technology the insta-charge batteries are still not here, whilst they are an area of active research. Similarly the idea of highways capable of charging electric cars via induction is still at concept stage – with the adoption of electric cars having been slower than some expected with the popularity hybrids. There’s still time for these predictions to come about but they feel more like a bet than a certainty now. As regards drones executing simple tasks this is already being widely discussed, regulated and piloted in multiple countries. The concept of pizza deliveries by drone – a particular favourite of mine, has already been piloted in multiple cities. Smart energy meters and grids was an early expression of the Internet of Things technology beyond telematics in cars. This is increasingly finding its way into mature markets with multiple insurers in both the US and Europe offering insurance based on devices in the home. Finally, the crash proof car – the topic of Donald Light’s report on the end of auto insurance. It felt far too early to say driverless cars would be ubiquitous by 2022 so this was a safer bet. While it’s a strong statement to say a car is crash proof we have already seen the rise of testing of autonomous cars as well as multiple car manufacturers underwriting the activities of their vehicles while in autonomous mode. We are already seeing manufacturers literally willing to bet their vehicles won’t be responsible for crashes on todays roads. Perhaps then, things are moving swiftly and Celent’s wild predictions of 2012 aren’t that far from the mark. Also of comfort to me is how members of the insurance are directly involved in some of these initiatives, where they are relevant. If you get time to think back on the year, I would be curious on your views. Has technology change sped up? Slowed down? Surprised? Disappointed? Where do you think it will head next? Celent has it’s thinking cap on already and some of these topics will be discussed in our events, What if…. and Celent’s 2016 Innovation and Insight Day, although we’d surely love to hear your views.

What if… the insurance industry didn’t innovate?

As a techy with long hair and a beard when I stand up and speak on technology an audience generally expects a futuristic view of the world and a call to action. Of late I’ve been more tempered in my view. Having talking about IoT, telematics and drones for five years now Armageddon hasn’t come, the sky above the insurance industry has not fallen and to be honest, many insurers are still running as they did five years ago with little challenge to their bottom line. In short, in many parts of the globe, insurance hasn’t changed. Have I changed my mind? Only regarding the timescales. For those that are looking – the proverbial canaries are falling. The signs can be seen in multiple countries globally that real change is coming, whether it’s the rise of price comparison websites, the rise of data aggregators, the rising population of connected sensors – whilst the industry hasn’t changed, the world it is sitting in is gently coming to a boil. Whilst the timescale of change to the industry itself is uncertain the possible impacts to the insurance industry won’t be random. That is the driver behind our What if event in February. A key part of event is to inform the audience about the possible scenarios that might befall the industry, to offer tools to consider the impact of these scenarios on their business and current investments. Our hope is to invite the attendees to consider how they would respond and if their current investments are preparing them adequately. Back to the title of the blog – what if an insurer didn’t innovate? An innovation agenda is one response to change and opportunity – whether that’s a change in competitor activity, customer expectations or change in distribution. Other responses could be to increase the agility of the organisation, finally address those legacy niggles or to simply improve the companies research capability to better keep an eye on what changes are coming. What if isn’t solely about innovation, but rather a look at likely scenarios and ensuring your organisation is prepared. If you haven’t registered yet, the event is in February in London and you can view the agenda and register here. For a list of other benefits have a look at Mike’s blog from earlier in the year, along with a reveal of the magical venue.

Personal musings from one of the world’s first InsurTech incubators

Last Friday (and flowing into the weekend), I was privileged to take part as a mentor in the final selection process for the first “InsurTech” cohort of the StartupBootcamp’s accelerator programme targeted at the insurance industry. This programme claims to be one of the first specialist “InsurTech” accelerators to be run globally by an independent firm. The programme has attracted pretty impressive backing from the industry with firms like Admiral, Allianz, Ergo, Intesa SanPaulo, LV=, Momentum, LBG/Scottish Widows, Tryg and UnipolSai taking partnership roles. To give you an idea around the scale of achievement of those who got through, the process started with circa 1.3k interviews, 250+ applications, 42 short-listed ideas and then whittled down to just 18 finalists…from which just 10 could be accepted onto the program. These ten firms will now go on to be mentored during their start-up phase, have their ideas challenged and further developed from people within the industry and independent entrepreneurs and, in doing so, build the network they will need to both attract funding and find new clients. Over the two days that I spent with the finalists, there were a number of themes that came through the submissions. Here are my personal musings: Data featured strongly across nearly all of the initiatives. Having access to either unique sources of data (whether from a home move, from a travel plan or from connected world) and a model for assessing underwriting risk appeared to be a winning combination. Digital engagement, aggregation and ‘robo-advice’ are hot topics. What I found most interesting was the focus on underserved markets, whether targeting prospects with poor health records, in difficult to reach populations around the world, or educating Gen-Y/Z of the value of insurance. Addressing underserved markets profitably is a big issue that the industry often struggles with. A fertile area if tackled well. What impressed me the most, however, was the passion and sense of purpose displayed by the teams in fixing something that just feels ‘plain wrong’ to them. The Internet of Things (IoT) is going to change the industry’s client engagement experience and liability profile. Five initiatives related to the IoT were submitted. Three were focused on wellbeing, one on the connected home and one on drones. Although it didn’t quite make it into the final ten, I found the drone initiative fascinating. With Amazon and others itching to launch commercial drone services at scale, this is a market that is set to grow. Drone insurance could be the next ‘fleet’ or ‘auto insurance’ (as was pointed out by my fellow mentor Charles Radclyffe). Certainly, the current risk models in use today are immature and unlikely to be adequate for a world where autonomous vehicles are delivering packages across our heads 24×7 (assuming the regulator allows it). Sadly, the drone initiative didn’t quite make it into the final ten. Personally, I wonder if it’s just maybe a little too early, but perhaps still one to watch for the future? As with anything IoT related in insurance currently, each initiative will face a shared challenge. Although the proposition concepts may be compelling, the instrumentation rate of adoption will ultimately set the pace for growth. The IoT is still in its infancy across the industry and convincing prospective clients to share their instrumented personal data is no small undertaking. Data permissions are a growing concern for both individuals and regulators. It was refreshing to see some of the propositions pitch personal digital vaults as part of their propositions, whether for managing data from connected devices, personal wellbeing or personal belongings. Although it’s not yet clear how the market will develop for these services or how they will be monetised beyond a simple subscription model, services like these may suddenly find themselves in the limelight once regulators step in to protect personal privacy. Regulatory compliance. It wouldn’t be the insurance industry unless there was at least one idea focused on regulatory compliance. What if you took all of your regulatory compliance reports produced, aggregated them, and then analysed them? A really simple idea without a huge amount of cost involved. It was a refreshing couple of days. I look forward to seeing how their ideas and propositions develop over the next year. If you’d like to know more about each of the final ten, details can be found here.