Opinion  

Time for insurance to move into the future

Paul Hately

In a market where we have been doing the same thing for a long time, we need to find ways to create agility and product creativity. The fact is that there are very large parts of the market that could be better protected – and who most likely would take out cover – if only we were making it easier for these customers to feel comfortable with the product.

Making use of data is one of the keys to making sure we are a part of this future. It can enable us to integrate cover into people’s lives, enabling awareness and choices. Here, I am not sure the industry can do it alone.

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We will need strong creative partnerships. There is much more to be done in tapping expertise outside our own companies and industry. Many insurers turn to their reinsurers, with expect advice and expertise being sought beyond risk management and into areas of consumer behaviour.

One area that has the potential to drive the revolution is predictive modelling, which can ease the underwriting process and get customers on risk quickly. Behavioural economics can also play a role in improving the context in which people think about protection. Then of course, there is the area of digital consumer engagement, where we better inspire people to buy insurance and as a result, close protection gaps.

Being a first-mover in the insurance industry bears inherent risks. However, the value of getting it right, of being the first provider who can provide the right product as easy as chicken soup, will be enormous. The protection gap for mortality insurance in the UK alone is well over £2,000bn. That is a lot of business and a lot of new customers who can be brought within the insurance safety net.

It might be a bit far-fetched to expect people to trust their fridge for financial planning – but making sure we are on the wave as the technology moves forward will make it a lot more likely that future customers are still in the equation.

Paul Hately is global head of Swiss Re Protection partners and board member of iptiQ.