Sponsored: Ventiv Technology

5 InsurTech Trends to Watch

Bill Diaz, CEO of Ventiv Technology, distinguishes the InsurTech trends you need to know.
By: | March 6, 2017 • 5 min read

“[INSERT LATEST TECHNOLOGY HERE] is going to revolutionize insurance and risk management!”

Without a doubt, if you’ve been part of the insurance industry for a while, you certainly have heard this claim many times before.

But despite the relentless hype, some new technologies have had a profound and lasting impact on the industry. And while there is no shortage of technology options, what’s needed is the ability to distinguish meaningful InsurTech trends from less important fads.

Bill Diaz is an accomplished technologist and insurance industry veteran with the experience and industry knowledge to help identify and develop these trends.

With more than 20 years of experience in data analytics and claims administration, Diaz has led the global insurance technology businesses at Marsh ClearSight, FIS and Oracle with solutions spanning property/casualty, life/annuity, and health.

Now, he’s recently become CEO of Ventiv Technology, which provides innovative software solutions to P&C carriers, TPA’s, brokers and risk managers.

“For too long, innovation within the insurance industry has lagged. Finally, we are seeing rapid change enabled by technology. The question is who will be able to adapt and thrive under these new conditions,” he said.

According to Bill, the 5 most important InsurTech trends are:

  1. Digitization

Bill Diaz, CEO

“Digitization is an incredibly hot topic in the industry today,” Diaz said.

For the most part, digitization has helped to remodel distribution processes but can “carry across any part of the insurance value chain, from buying through to servicing,” he said. True innovators in digitization are more focused on creating on-demand products offered through mobile applications, so they can get the right product or service in front of customers at the right time.

Take travel insurance as an example. Based on location services from their mobile phone, a carrier can offer travel insurance when a potential client enters the airport.

“Carriers with a location-aware app can provide a transactional buying experience that is much easier and faster for the end customer. Insurance buying is becoming more transactional and innovative carriers or agents can take advantage of those opportunities,” Diaz said.

Of course, improved customer experience is not the only driver of digitization. Amid a continuing soft market, insurers are constantly looking for ways to cut down on administrative costs and increase efficiency. Digitization offers a way to do just that.

“Many processes within insurance are still paper-based, so it’s a very ripe area for digitization to be an effective tool,” he said.

  1. Disruption of Traditional Channels

Technology also enables new, non-traditional players to get into the insurance game, blurring the lines around traditional roles and processes.

Alternative pools of capital in the form of private equity investments or peer-to-peer insurance, for example, put pressure on carriers to differentiate themselves in the market and refine their value proposition.

Technology also changes how service providers connect with customers, allowing them more direct access to end users and more leverage with carriers. Technology companies can now more easily expand into areas served by traditional service companies.

“Don’t be surprised if you see providers move into what’s historically been considered service or distribution areas. Technology is forging these new channels between insurers, service providers and customers,” Diaz said.

“Carriers have to be able to define their value, and that value has to go beyond geographic borders or compliance, because technology is breaking down barriers and making it easier for smaller, non-traditional players to compete,” he said.

  1. Fight for the End Customer

As technology enables more direct interaction between the marketplace and end consumers, competition for customer attention is getting fierce.

“Whether you’re an insurance carrier or a broker, everyone is fighting for access to the end consumer,” Diaz said.

The primary strategy to gain that consumer’s attention is to create a unique buying experience with proprietary tools, technologies and underlying services. This appeals especially to millennials, who increasingly are the end insurance buyers, even in the B2B world.

Brand loyalty doesn’t matter so much to millennials as much as partnering with a company that’s doing something new and transformative. They’re the perfect fit for the unique services, ease of use and quick communication that insurers are striving to offer.

“It’s a challenge for carriers and brokers. Everybody is trying to make a name for themselves and create some level of distinction. Just saying that you’ve been in business for 150 years is not enough for the new generation of consumers,” Diaz said.

  1. Focus on Loss Control

The advances in insurance technology that get the most buzz are those that aim to re-tool distribution. Emerging companies have differentiated themselves by offering policies direct to the consumer through web-based apps, making the process easy and fast.

But with traditional carriers implementing similar technologies, it’s unclear how these InsurTech startups will fare in the future. The real value of insurance technology, Diaz argued, lies in loss control.

“Our core value as an industry is to help customers identify what’s happening in their risk management programs around risk control, avoidance and mitigation,” he said.

More and more, investors are realizing the benefit of loss prevention in order to reduce claims and lower insurance premiums in the longer term. The growing popularity of wearables, fleet telematics and corporate wellness programs demonstrate this shift in thinking.

  1. Analytics

“The transformation in analytics is progressing at an incredible pace,” Diaz said.

Previously, companies took a very broad approach to data, where an analyst could take all of a company’s structured data and sort through it to identify trends and drivers. But this isn’t so much “analytics” as it is standard business intelligence and reporting.

True analytics involve pulling information from multiple sources, both internal and external to the company, to develop unique insights.

“There’s been an explosion of data, whether it’s email or social media or data that exists on corporate servers. It’s so exponential that people struggle to make sense of it and see the value,” Diaz said.

The sheer amount of data has necessitated a shift from a generalist approach to a specialized approach. Data analysts now must focus on a specific domain where they have expertise.

Ventiv Technology is at the forefront of these trends, with solutions for everything from claims administration and safety management to analytics and data transformation. To learn more, visit http://www.ventivtech.com/.



This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Ventiv Technology. The editorial staff of Risk & Insurance had no role in its preparation.

Our people, software, and innovative solutions empower organizations to achieve optimal results of their risk, insurance, and safety programs. Through the depth and breadth of our software solutions, global capabilities, and domain expertise, we are the proven leader in supporting virtually every type of industry and the largest and most complex companies in the world. Ventiv Technology proudly partners with over 550 organizations and 300,000 users in more than 40 countries.

2017 RIMS

Resilience in Face of Cyber

New cyber model platforms will help insurers better manage aggregation risk within their books of business.
By: | April 26, 2017 • 3 min read

As insurers become increasingly concerned about the aggregation of cyber risk exposures in their portfolios, new tools are being developed to help them better assess and manage those exposures.

 One of those tools, a comprehensive cyber risk modeling application for the insurance and reinsurance markets, was announced on April 24 by AIR Worldwide.

Scott Stransky, assistant vice president and principal scientist, AIR Worldwide

Last year at RIMS, AIR announced the release of the industry’s first open source deterministic cyber risk scenario, subsequently releasing a series of scenarios throughout the year, and offering the service to insurers on a consulting basis.

Its latest release, ARC– Analytics of Risk from Cyber — continues that work by offering the modeling platform for license to insurance clients for internal use rather than on a consulting basis. ARC is separate from AIR’s Touchstone platform, allowing for more flexibility in the rapidly changing cyber environment.

ARC allows insurers to get a better picture of their exposures across an entire book of business, with the help of a comprehensive industry exposure database that combines data from multiple public and commercial sources.

The recent attacks on Dyn and Amazon Web Services (AWS) provide perfect examples of how the ARC platform can be used to enhance the industry’s resilience, said Scott Stransky, assistant vice president and principal scientist for AIR Worldwide.

Stransky noted that insurers don’t necessarily have visibility into which of their insureds use Dyn, Amazon Web Services, Rackspace, or other common internet services providers.

In the Dyn and AWS events, there was little insured loss because the downtime fell largely just under policy waiting periods.

But,” said Stransky, “it got our clients thinking, well it happened for a few hours – could it happen for longer? And what does that do to us if it does? … This is really where our model can be very helpful.”

The purpose of having this model is to make the world more resilient … that’s really the goal.”Scott Stransky, assistant vice president and principal scientist, AIR Worldwide

AIR has run the Dyn incident through its model, with the parameters of a single day of downtime impacting the Fortune 1000. Then it did the same with the AWS event.

When we run Fortune 1000 for Dyn for one day, we get a half a billion dollars of loss,” said Stransky. “Taking it one step further – we’ve run the same exercise for AWS for one day, through the Fortune 1000 only, and the losses are about $3 billion.”

So once you expand it out to millions of businesses, the losses would be much higher,” he added.

The ARC platform allows insurers to assess cyber exposures including “silent cyber,” across the spectrum of business, be it D&O, E&O, general liability or property. There are 18 scenarios that can be modeled, with the capability to adjust variables broadly for a better handle on events of varying severity and scope.

Looking ahead, AIR is taking a closer look at what Stransky calls “silent silent cyber,” the complex indirect and difficult to assess or insure potential impacts of any given cyber event.

Stransky cites the 2014 hack of the National Weather Service website as an example. For several days after the hack, no satellite weather imagery was available to be fed into weather models.

Imagine there was a hurricane happening during the time there was no weather service imagery,” he said. “[So] the models wouldn’t have been as accurate; people wouldn’t have had as much advance warning; they wouldn’t have evacuated as quickly or boarded up their homes.”

It’s possible that the losses would be significantly higher in such a scenario, but there would be no way to quantify how much of it could be attributed to the cyber attack and how much was strictly the result of the hurricane itself.

It’s very, very indirect,” said Stransky, citing the recent hack of the Dallas tornado sirens as another example. Not only did the situation jam up the 911 system, potentially exacerbating any number of crisis events, but such a false alarm could lead to increased losses in the future.

The next time if there’s a real tornado, people make think, ‘Oh, its just some hack,’ ” he said. “So if there’s a real tornado, who knows what’s going to happen.”

Modeling for “silent silent cyber” remains elusive. But platforms like ARC are a step in the right direction for ensuring the continued health and strength of the insurance industry in the face of the ever-changing specter of cyber exposure.

Because we have this model, insurers are now able to manage the risks better, to be more resilient against cyber attacks, to really understand their portfolios,” said Stransky. “So when it does happen, they’ll be able to respond, they’ll be able to pay out the claims properly, they’ll be prepared.

The purpose of having this model is to make the world more resilient … that’s really the goal.”

Additional stories from RIMS 2017:

Blockchain Pros and Cons

If barriers to implementation are brought down, blockchain offers potential for financial institutions.

Embrace the Internet of Things

Risk managers can use IoT for data analytics and other risk mitigation needs, but connected devices also offer a multitude of exposures.

Feeling Unprepared to Deal With Risks

Damage to brand and reputation ranked as the top risk concern of risk managers throughout the world.

Reviewing Medical Marijuana Claims

Liberty Mutual appears to be the first carrier to create a workflow process for evaluating medical marijuana expense reimbursement requests.

Cyber Threat Will Get More Difficult

Companies should focus on response, resiliency and recovery when it comes to cyber risks.

RIMS Conference Held in Birthplace of Insurance in US

Carriers continue their vital role of helping insureds mitigate risks and promote safety.

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]