IIG Insights: Insurer of the Future
We were delighted to welcome IIG guests to our 3rd IIG Insights session which was wholly sponsored by Bryte Insurance Company and hosted at the Hogan Lovells auditorium in Sandton. The session was opened by our IIG Councillor, Tshepiso Chocho (Executive Manager: People Management at Sasria) who brought her own brand of flair and pizazz as she hosted the event. Also, in attendance were Immediate Past-President Daniels Stevens, IIG Council members, and IIG Ambassadors. Tshepiso touched on the importance of IIG’s role in growing the insurance industry whilst being an advocate for change and innovation.
Toby Shapshak / Topic: Insurance 2030 – the impact of AI on the future of Insurance
Toby Shapshak is a South African journalist and was the ICT Journalist of the Year in 2002. He is the editor and publisher of the South African edition of Stuff magazine and he co-hosts a live weekly TV show on CNBC Africa as well as writes a weekly column for the Financial Mail.
Toby outlined his role in his path to demystify changes in technology and the future of Artificial intelligence (AI) which has fast become the biggest trend in the world. Technology is profoundly changing how we all do business; it moves at a radical pace and each new development shows significant ways of doing things differently and/or more efficiently. The context of AI is important so that it’s not viewed and feared as a radical phenomenon. It’s basically machines starting to learn to do what humans do. The human brain is a highly complex organ and developing AI to mimic its functionality takes a long time. Toby showed some interesting examples of how various forms of technology has advanced namely, computers, telephony, music, etc. The way to understand AI is to have an appreciation of automation over the past 100 years. Education, at that time only catered towards and was specific to job roles available at the time.
We are now seeing the advent of cloud computing and an attempt by the entire insurance industry to move towards it. As computers continue to advance, privacy concerns grow as well. However, there are also highly advanced benefits that run parallel to any concerns. For example, the algorithms used by Google Photos are now being utilised in India to identify early diabetes through photographing and analysing people’s retinas. AI is also being used to determine authenticity, by way of example, some banks in the world require clients to send videos when requesting loans to check micro-expressions. The human brain has a natural capacity to see patterns and connections which is still challenging for computers to decode. The first single biggest contribution AI will have on the insurance industry is fraud detection. Behavioural pricing and policies are already in use bringing a more personalised experience to the customer. Last year, more than £1.3bn was lost as a result of insurance fraud in the UK and in the US, it was a staggering $40bn per annum.
Toby concluded by impressing upon everyone that New Technology = Disruption and changing a mindset is usually the biggest challenge. Our environment has changed phenomenally, but the human brain finds new ways to regrow. If one does not adapt to change, someone else will – change is part of human nature. The forum was opened to questions, one being, “if there is still relevance in the human element”. Our presenter advised that there’s always a need and uniqueness. Human interaction and intuition are irreplaceable.
Sedick Isaacs – Head: Business Support Services at Bryte / Topic: Technology and Data Analytics
Sedick opened his discussion with questioning where the insurance industry is in South Africa with regards to digitisation and AI. He advised that insurers need to re-engineer themselves as per customer needs. If they don’t, will they still remain relevant in the future? Drones are being used extensively in agriculture and other sectors. Automation also carries a certain degree of risk, but risk can be approached with purpose. The context of AI is critical in terms of positioning and speaks to the fusion of technology with the objective being efficiency and speed. Sedick touched on Bryte’s foray into this field and their partnership with Granadilla Insurance, who specialise in automation and digitised buying. However, two-thirds of the customer market still prefer human interaction in settling complex claims. Some arising concerns are, for example, driverless vehicles, who becomes liable in an event? This is how risk manifests itself in changing technologies.
Data analytics adds value by:
- Enhancing risk assessment in underwriting
- Reducing the cost of claims
- Identifying new sources of profitability
- Improves the customer experience
The role of the broker is being challenged in the AI space, are they still relevant? Brokers are still key but traditional organisations must evolve and adapt to a changing world. Data analytics is a strategic driver of the future. One needs to operationalise and drive data analytics to increase enterprise-wide capabilities in an organised, centralised and strategic manner.
Who are the big data thought leaders?
- IT Dept.
- BI Organisation
- Finance & controlling
Data analytics affords insurers to uncover and identify fraud or non-compliance.
Riaz Mia – Head of Claims (Bryte) / Topic: Technology and Data Analytics
Riaz focused on risk, partnerships, technological innovations (digital partnerships) and extreme weather conditions (partnering with meteorological institutions). He unpacked the top 10 global risks in terms of likelihood and impact with extreme weather events taking the number one spot on likelihood and weapons of mass destruction being number one in terms of impact. Cyber attacks always have both high likelihood and impact. Riaz touched on Bryte’s partnership with the Maharishi Institute that provides tertiary education to disadvantaged individuals which includes insurance training. This partnership with the Institute allows Bryte to access skilled and trained graduates that can become future employees. Bryte has committed to training 1 000 individuals and assimilating them back into the industry.
Digital partnerships and technological innovation help better support customers and employees.
Data protection regulation: POPIA & GDPR could not have arrived at a better time in an age where information is more readily available than ever as it is today. Extreme weather events have become the “new normal” with flooding, wildfires, storms and hurricanes as well as severe droughts increasing. Insurers need to be equipped and be able to take a collaborative approach in addressing these natural disasters. A short video clip was shared whereby environmentalist and journalist, Simon Gear, touched on the impact of environmental conditions on insurers. Riaz concluded that the global risk landscape is shifting and we need to be prepared. Data analytics will drive the future.
Tshepiso provided a brief summary of the morning’s discussion before closing the session and once again thanked our main sponsor: Bryte
Members were reminded to use the IIG Vault (log in here) for their CPD needs and plan their attendance at the Insights Sessions at the beginning of the year so they can begin collecting CPD points early.
Article written by: Asiya Swaleh