Technology in the service of the insurance sector
Technological innovations have driven the creation of new business models in the Insurance Sector. Upon the coming of the "Disruptive Storm", brought about by the advent of the so-called insurtechs (sector start-ups which use state-of-the-art digital technology in their relationships with the insured parties and potential clients), we find ourselves maybe partaking in one of the greatest changes in the World's Insurance Industry, just as what happend with the fintechs, companies developing developing technological solutions for the financial market.
More than simply naming segment startups, the term "insurtech" is also associated to the digital change process in the Insurance Sector. Based on several events which discuss all trends, tools, technologies and innovations, Brazilian professssionals have already become used to words and expressions deriving from the Digital Insurance Era: chatbot, Internet of Things, Artificial Intelligence (AI), machine learning (or machine learning for performing tasks with or without supervision), User Experience (UX, from the English term User Experience), Big Data, enhanced reality, blockchain, (violation -proof database), and cloud computing.
However, there is still a long way to go: research by Strategy @ for the Valor Economico newspaper yearbook has found that 50% of the insurance companies and health insurance plan operators interviewed invested, at most, 2% of their of revenues in technology. The remaining half, from 2% to 4% per cent.
Aware of the technological evolution in Insurance, Delphos, a company specialized in technology and software, has invested in a business management system (ERP) SegDELPHOS, and has plans to qualify its associates through trianing rounds geared to "Digital Change". Delphos, points out technology director Carlos Trindade, is tuned to insurance company movements in the technological area. "We have identified business opportunities in CRM, on account of our association with Salesforce", he comments, referring to Customer Relationship Management practice (Client Relationship Management).
Cyro Buonavoglia, president of Buonny Projetos de Riscos e Serviços Securitárion (Buonny Risk Project and Insurance Services, states that his company has invested, in 2017, more than R$ 8 million in technology projects geared to the Insurance Sector. Among these, the creation of apps for supplying the needs of highway accidents involving cargo and freight hiring; also, a mobile platform for tracking shipper and carrier coperations. For 2018, technology inflow will be greater. "Our expectation in to increase investments by 20%, he estimates.
Planet, says founding partner Henrique Maziero, has already invested approximately R$ 3 million in technology and will double this figure in the coming two years. The Group, which provides services and systems for the Insurance Sector, has developed exclusive products turned to client relationship in self-inspection, survey and claim areas. "A client, by means of a web app, is able to perform inspection, file a claim involving his vehicle, or inspect his residence." Maziero exemplifies.
Caroline Capitani, Ilegra IT and business company vice-president, says that her company has supported insrance companies in creating and developing innovative products. "We have been working to chart new-born inititives in the insurance area so that insurers may be able to carry out joint ventures, by enhancing time to marketing and adding value to services delivered to final users.
Insurer Sul America, according to Technology and Client Service director Cristiano Barbieri,already uses technologies such as IoT, Big Data, Telemetry and machine learning in services for clents and brokers. Among these, app Sul America Saude, "which boasts of more than 1 million downloads" and appointment reimbursement through app, "This technology uses machine learning to recognize medical receipts by means of a photo, which can be made by the insured client via smartphone camera", he explains.
INSURTECHS: BIllionaire global investments
Whereas, between 2013 and 2015, global insurtechs received funding of US$ 3.1 billion, growing to an incredible 750% in this period, around 550 of these insurance start-ups already count on resources amounting to US$ 14 billion for investments in innovation. Not by chance, technology giants such as Googlle, Apple, Facebook, Amazon and Alibaba (the GAFAA's), have also been investing in this market due to the great digital potential brought by Insurance.The Insurtech Outlook 2016 report, issued by Everis, points out that the GAFAA's interest in the Insurance Market is rooted to the fact that such corporations hold robust client databases, an extensive capacity for processing large data volumes and are willing to invest in Big Data and Iot.
There are currently more than 1,500 throughout the world. This number has grown each year in Brazil: they were 7 in 2015; reached 14 in 2016, and, to date, there are 27 start-ups in the country. The Sector main challenge is to answer positively to the level of innovative solutions brought by the coming not only of the insurtechs, but also of the concept of a digital relationship with clients and insured parties, existing and potential.
Carlos Trindade believes that Insurtech technology will help in reducing the bureaucracy of activities, which will lead to, according to him, productivity. "Bu triggering a disrupture in a market which, for a long time, was deemed as conservative, this process will have to contemplate the administration of side effects and risks, which occur in all types of breakthroughs. But the client should be the greatest beneficiary, and increase of his knowledge will make his take out more insurance, thereby increasing opportunities for the insurance companies", he analyzes.
Caroline Capitani holds a similar opinions on Insurtech advent. "This is a rend aiming to reduce operating costs and providing a significan business productivity jump and profitability. this journey needs to be followed by reducing bureaucracy in hiring services, as Brazilians still do not have the "insurance culture". These start-ups, according to Ilegra's ' Vice-President, have brought technology and new data sourceees, added to artificial intelligencee, which has been increasingly affecting the insurance area.
INNOVATIONS TURNED TO MEETING 'ClienTech' NEEDS
For companies and professional acing in the Sector, the focal point is now investing in innovative digital tools, able to set forth new relationship standards with 'ClienTechs'. These comprise companies and citizens - current and potential insurance clients - who bear strong mobile-digital culture, and who now wish to include hiring insurance in this list of activities.
Planetum is also concentrated on "tokenization" (a technology which allows replacement of confidential data by symbols) of processes already exsting in all branches, from automobiles, residences, equipment and even commerce. "The new product which we are developing is related to the manner with which a client pays his deductible and policy. The objective here is bringing security, speed, convenience, cost reduction, and control for the insured party, the broker, and the insurance company", highlights Mazieiro.
Conversely, Delphos has set up an innovation committee to identify the new technologies which may be used in-house, or offered to clients. "We have, for client service, a CRM Salesforce-dedicated team, able to identify themarket 'pains' and think up solutions to provide, points out Trindade.
In Caroline Capitani's opinion, Brazilian Insurance is "thirsty for innovation". In this sense, Ilegra has developed a chatbot and machine learning-based platform, which carries out proactive search prospects (potential clients) for the Insurance Market. The technology, according to her, is useful for brokers, as it maximizes acquiring new clients by means of user behavior analysis in social networks and in Internet search.
Marcelo Sena, Commercial director of TransUnion Brasil Insurance division, points out that company technology has helped insurance companies in making decisions throughout the entire insurance chain, from client acquisition in an online and digital environment "with no need for paper or bureaucracy", and going through the quotation, acceptance, and policy issuance phease, 'up to the final claim phase, when a client most expects for speed by the insurers."
BRAZILIAN INSRANCE DIGITALIZATION
Focused on better service to clients, the companies acting in the sector are starting to put together their digital strategies, turning innovation into flagships guiding their disruptive actions toward processes and services.
Carlos Trindade appraises that the digitalization trend in the Global Insurance Market has grown even further. In Brazil, according to him, the maturity level in digital processes is"still relatively low in insurers, but the trend is one of growth, especially regarding the relationship of these companies, brokers and insured parties. He believes that the Sector's growing digitalization will contribute toward increasing Brazilians' knowledge on insurance, and, therefore, on the possibilities for taking out coverage.
Henrique Mazieiro says that the Brazilian Insurance Digital Era represents and "incredible opportunity" for companies to provide insurance products and services based on new technologies. Planetum has been currently working on client service processes related to filing claims, previous inspection, surveys, liability claims and payment processes, 'all performed through our web app", he states.
For Marcelo Sena, Insurance digitalization, although protracted on account of the "strong regulation and conservantism in the sector", is an irreversible trend. "We have seen it occurring in for in other sectors, which brought enormous benefits to all. A technology is nothing further than a limiting aspect and barriers, little by little, have decreased, thereby bringing greater speed and savings for the insurance companies", he highlights.
Caroline Capitani believes that the Sector digitalization process has proceeded in "wide strides" throughout the entire Insurance value chain. "Fast dissemination of technologies and concepts such as Lot, blockchain, roboadvisors, machine learning, Big Data, sharing economy and open API's have impacted the way that insurance is distributed, monetized and consumed throughout the world", he analyzes.
With a future view, the Sector will learn to adapt to the Digital Insurance Era brought by the Insurtechs, and venture into this brand-new territory of immense opportunities for insurers and insurance brokers. For Trindade, digital change will cause the brokers to bear better conditions to drive sales."Technology may help them to take insurance to an ever greater population, if they are aware of opportunities which will arise, either for better service for insured parties or for acquiring new niches and new clients", he states.
Caroline Capitani advocates that the "human factor" bears its value in putting insurance to market. "No matter how a process to remove "insurese' from service explanations is undergoing, we contiue talking about a non-trivial sale, which bears a degree of complexity involved. What will change, or what has been changing is the broker's role in this flow: he will be more consultive and less operational. However, inclusion in this digital context will be a decisive factor for him to remain relevant in the sales cycle", she points out.
Buonny's president points out that an insurance broker should create conditions which provide for bringing together his structure and investments in technology. "Nothing can replace the contact created in developing partnerships, but it is certain that it has come to stay and that we cannot shut our eyes to such reality", he ponders Buonavoglia.
Marcelo Sena has a similar opinion and believes technology has come to ever more benefit good professionals, in any category. "No technology will replace services from those who use it to improve their relationship with their clients. Those who know how to use it better will stand out. And an insurance broker knows how to do this very well!, he praises.
SulAmerica has been undergoing a "digital change journey", and has invested in a consistent manner in innovation, says Barbieri. "We are dedicated to employing the new technologies to facilitate a broker's work and provide custom services so that these professionals may become references in complete solutions for client protection", he states.
For Mazieiro, the Digital Era in the Insurance Market will benefit all, "without exception". According to him, the new platforms will provide greater speed and ease in the relationship between insurer, brokrer, and client. For Planetum's founding partner, the insurance broker's role "is huge", in any relationship environment with insured parties. "In all concepts we have implemented, brokers were involved in the process from beginning to end. And it is thorough them that the innovation process is being implemented and through it that clients are broadly advised", he advocates.
The advent of Insurtechs has further brought the promise of a better client experience and the need for insurance product supply reinvention and of risk definitions and types. And the key for embracing this disruption for once will be by exploiting the synergy between technology and ways of life and of consumption of the new generation of potential insured parties.
The Sector needs to be aware of its consumer behavior and of the profile of its consumers and of future Insurance Industry clients. Members of the so-called Generation Z (born from the half of the 1990's up to 2010, barely access their e-mail accounts and do (almost!) all through their smartphones. They will be the protagonists of the Fourth Industrial Revolution. In this sense, the practice of innovation is an invitable way for Insurance Sector renewal and its contribution to the so-called Mobile internet, Digital and Carbon Free Internet by associating for once, insurance, trchnology and sustainability.
"Speed and information quality wil be the major gains in this segment. But we believe that relationship in this segment will be strongly impacted. We have a new generation arising that is used to the digital world and that this will cause insurers to shape and adapt their new products. The Digital Era will provide this speed and all will will gain", bets Marcelo Sena. Cristiano Barbieri says that the Digital era has brought great advances for the relationship with insured parties, brokers and advisories," as it facilitates processes, ensures productivity, generates value experience, brings autonomy and reliabilility.
Technologies such ad one click and on-demand will be some of the terms guiding the rewriting of business models of in the insurance area. emphasizes Caroline Capitani. This means, according to the executive, more customized services, hired according to clients' needs, as from the channel which better suits them. "Speed and customization are important aspects in the gain of the relationship between the insurer and the insured parties," she points out.
"Technology will cause insured parties to be moore demanding", argues Trindade. According to him, investments in technology and innovation will cause insurers and brokers to expedite insurance quotations. "We will have insured clients better informed, demanding more, and a market always pursuing improvements to meet this new type of demand", he foresees.
Business models in this "almost present-time future", says Cyro Buonavoglia, will step away ever more from traditional formats. Smartphone use, according to Buonny's president, demonstrates this strong trend. "In Brazil, it will not be different: we have already moved toward the development of new service models, aiming at such cost optimization and product range, and which will involve, certainly involve the Insurance Sector", he states.
In fact the DIGITAL era, innovation and technology already comprise part of the Brazilian Insurance Market culture. And why not?
Source: REVISTA ACONSEG - JANUARY/2018