The other day, Marsh, Chubb, Accenture and Seyna got together to explore "The Affinity Insurance of the Future".
Here are 4 key ideas drawn from the discussion that could help us prepare for the challenges and opportunities that lie ahead.
1. The Rise of Cyber Risk
As Arnaud Ducruix, actuary at Seyna was saying: by 2030, ransoms paid to cyber criminals could reach $265 billion dollars. This compares with $465 million in 2023. This represents a 600-fold increase over 5 years.
The sums are enormous and the frequency will only accelerate. In 2019, it used to take 60 days to prepare for a cyber attack. In 2023, it is a matter of 4 days. Not only will this timeframe reduce by 2030, it will also be much more distributed. The production of a Deepfake video for extortion purposes costs $20 USD online. A "ransom kit" is already on sale for $40 online. We're talking about the global industrialisation of cyber-criminality.
Unsurprisingly, cyber security thus remains the #1 priority for risk managers in 17 key markets, including the US, UK, France and Japan (Source: Allianz Barometer, Ed. 2024).
Cyber must be part of our priorities. Fortunately, we are seeing real investments like - Dattak, Stoik, Diot-SIaci ... Cyber, the next vertical for Seyna ... ?
2. A profound transformation of our business
Laurent Cellot, Deputy Director of Special and Affinity Risks, reminded us that Amazon Delivery now ships more parcels than the National Post Office. This is a reminder of the speed at which technology is transforming the world we live in. Just imagine: tomorrow, your boiler will report its own claim directly to your MGA, without going through you or any call centre. What impact will this have on the average cost of claims, management agreements, SLAs, etc.? We are facing a profound transformation of our business. This entails risks, but also enormous opportunities.
Declarations, FNOLs, data integration... tomorrow's technology will absorb our repetitive tasks. What tech should we invest in today to achieve the same success as the Amazon parcel, but in insurance? Let's think today about the experiences and automations that technology will enable us to create tomorrow.
3. Profitability from day one?
Anthony Simier, Head of Consumer Lines at Chubb, mentioned the importance of designing profitable insurance programmes from day one. This is a sound objective, but one that is hard to achieve today. In insurance, the first price is rarely the right one. So there are 2 possible approaches:
- You overcharge to secure the margin. But this gives customers an inflated price that they won't accept, or
- You harness technology to quickly monitor claims experience, and we quickly adjust the product in line with market feedback.
The success of an insurance product is a process. Launch, measure, adjust, repeat. You have to rely on technology to find the right price - without making customers pay the cost of iteration.
4. Technology that allows us to refocus on the customer.
Finally, David Sardas, Director of Strategy for Financial Services at Accenture, emphasised that innovation in insurance today is driven more by the market than by regulation.
It is true that in a sector as regulated as insurance, the regulatory burden often encroaches on the service provided to the customer. But the emergence of regtech technologies offers an opportunity to delegate or at least optimise its management in order to focus on the customer.
Paying for a solution that frees up your time for your customers or for growth is not a cost, it's an investment. The key is to choose the right service provider.
🎥 To relive the discussions, here is the replay of the webinar.
Dell report on "The Economy of the Future 2030": t.ly/hxSPK
Accenture's ground-breaking study on Open Insuring 2022: t.ly/sAxhr
Guide to preparing for the Compliance of the Future: t.ly/Ci0Yq
Allianz Risk Mapping Barometer (Ed. January 2024): t.ly/P4sGX