On Wednesday 2nd August, experteq released the inaugural Insurance Industry Report 2017 with a launch event and panel discussion, featuring high-profile insurance industry thought leaders.
Moderated by Andrew Stabback, CEO and Publisher, AB+F, the panel discussion included the following high-profile speakers: Sally Loane, CEO, Financial Services Council; Vanessa Dobson, Head of Research and Development, Munich Re; Brenton Charnley, Founder of InsurTech Sydney; and Shane Baker, CEO, experteq.
Held at the Allens offices in Sydney’s CBD, the event was attended by close to 100 esteemed guests, bringing together the brightest minds in insurance, reinsurance, InsurTech, and financial services more broadly.
The panel discussion was sparked by in-depth conversations around some of the report’s key findings, such as the current opportunities and challenges facing today’s incumbent insurers; the rise of the customer and InsurTechs; and the disruptive impact of technology upon the industry.
Why did experteq initiate the Insurance Industry Report 2017?
At a time of rapid change driven by technology and disruption, the insurance industry faces new and complex obstacles in the road ahead. The rise of disruptive players like InsurTechs and a push for customer-centric business models has forced insurers to adopt a more innovative mindset and shift away from outdated legacy models.
As a trusted technology partner for over 50 insurance and financial services institutions, experteq initiated the Insurance Industry Report 2017 to spark a much-needed conversation about the insurance industry’s current trends and future outlook. The aim of the report is to provide a timely and relevant industry snapshot for executive leaders, customers, and stakeholders alike.
“Drawing on interviews with over 50 executive leaders from a diverse range of insurance companies and InsurTechs, the report highlights strategies for remaining competitive, relevant and customer-centric in a highly regulated and disrupted industry,” said Shane Baker, CEO of experteq.
“The report serves as a pulse-check for the market and a benchmarking tool for companies to measure progress. Our aim is to answer the burning question: where to from here?”
6 key insights from the panel discussion
1. Innovation and collaboration with InsurTechs are key to progressing the sector.
While the panel acknowledged the distinct challenges today’s insurers must overcome, the consensus was that the industry faces a positive outlook.
The panelists discussed the elements of risk and reward involved in innovation and forming new partnerships. A strategic focus on innovation, creativity and collaboration between incumbents and InsurTechs will create timely opportunities to further the sector.
As Vanessa Dobson phrased it, “The challenge for incumbents is to take a step of faith to work with organisations that don’t fit neatly in the box.”
Innovation is not just a strategy but a mentality that drives opportunities for growth. As evidenced in the Insurance Industry Report findings, incumbents can deliver capital, scale, and regulatory support to InsurTechs, while InsurTechs can deliver innovative tech, greater efficiencies, and a forward-thinking mindset to incumbents.
Brenton Charnley agreed that to set the tone for the wider industry, both insurers and InsurTechs need to bring their innovations outside of the company and work together.
“Insurance is not alone in this struggle to innovate. We need to level the playing field and collaborate to bring new developments into the wider arena.”
2. Insurers are ready and willing to change but struggle amidst legacy shackles.
Vanessa Dobson indicated that incumbent insurers are ready and willing to change, yet continue to be challenged by outdated systems and a legacy mindset.
“Insurers are demonstrating readiness for change, but are struggling to move past legacy systems and legacy products. The willingness is there, but leaders seek guidance and a strategy regarding how to change.”
Sally Loane agreed that legacy systems can’t respond effectively to changing customer demands. She advocated that companies need to shift towards a customer-centric strategy.
“Key strategies to get ahead include partnerships with InsurTechs, leveraging Big Data and a focus on digital/social media marketing to target millennials. Don’t overlook the importance of brand.”
3. To remain competitive, solving customer pain points must be top of mind.
The panelists agreed that for companies to remain relevant and competitive, addressing and solving customer pain points should be top of mind. Shane Baker advocated that while innovation, disruption, and tech will continue to be key drivers of growth, the customer simply cannot be ignored.
“We’re at the tipping point of realisation that we must innovate, or risk being left behind. Solve the customer’s problem or somebody else will – and they might just do a better job.”
Customers are already responding to opportunities to use more convenient insurance platforms, such as Trov, an on-demand insurance platform that allows people to protect what they want, when they want, entirely from a smartphone. (Download the Insurance Industry Report 2017 to read a full interview with Scott Walchek, Founder and CEO of Trov.)
Sally Loane recommended that the life insurance market, in particular, can benefit from simpler, more convenient services on-the-go.
“The life insurance market can benefit from adapting to new market trends and demands being driven by millennials. To ensure insurance is accessible and easy for the customer to understand, insurers need to have the conversation in simple language and reduce jargon.”
4. Tech is not the disruptor: the business model is.
The panel discussion highlighted the important role of disruptive technologies in progressing the industry, both now and in the future. To remove barriers for growth and drive more efficient processes, incumbents need to look at new tech innovations like AI bots.
However, tech isn’t everything. As Brenton Charnley phrased it, “Tech is not the disruptor: the business model is. Do something really well in a niche market and you will stand out. Go after non-disruption to truly disrupt.”
Vanessa Dobson suggested that some incumbents are confident in paving the way for change alone, rather than relying upon InsurTechs to shake things up.
“If we consider other industries, usually established players don’t lead the innovation agenda. Instead, they make smart alliances in order to draw on the strengths of one another,” she said.
5. A culture change is needed, with compliance as the catalyst.
The discussion highlighted that insurers continue to face the opposing forces of compliance versus innovation. Yet several panelists argued that compliance should be a catalyst for innovation, rather than a burden.
As Shane Baker explained it, “Insurers face opposing forces. There is heavy restriction around what you can do, yet a push for companies to innovate. The industry requires more transparency around the regulator’s perspective, with frameworks in place to view compliance not as a burden, but as a culture and catalyst for change.”
Sally Loane suggested that compliance teams are a key growth area for businesses.
“Insurers need to focus on a code of practice around self-regulation, starting by building an internal compliance team and a culture of risk awareness. Culture is fundamental to remaining focused on customer needs and ensuring your brand promise meets those needs.”
Brenton Charnley also advocated for an enhanced focus on the customer through more convenient and easy-to-use offerings, such as chat, social media and mobile platforms.
“Consumers don’t buy life insurance unless it’s easy, convenient and a selling point. Through an enhanced focus on the customer, insurers can further reduce the regulatory burden. Save time for the customer through more efficient, mobile-friendly channels.”
6. Drive greater transparency between the government, the regulator, and insurers.
To conclude the discussion, the panelists called for the government and the regulator to reduce regulatory overhead through greater transparency and open communication with insurers.
Only through collaboration between government, regulators, and insurers can the industry forge forward. As evidenced in the Insurance Industry Report a shift away from a one-size-fits-all approach is needed.
As Vanessa Dobson explained it, “The industry is cautious around how to innovate because of the weight of regulatory overhead. From the top-down, we need to engage with and educate consumers about how the industry helps people.”
At the same time, technology can further enable insurers to innovate while remaining compliant. Brenton Charnley argued that automation and AI need to be embraced on every level, from the government to the regulator, to incumbents and InsurTechs.
“Are humans the right people to be giving advice to customers? We won’t find out without more regulatory sandboxes, where incumbents can explore new ways of thinking without the demands of strict regulation.”
The Insurance Industry Report 2017 launch event and panel discussion were a great success. Featuring a number of industry influencers, the panel discussion
addressed hot topics about innovation as a mentality; the need to shift away from legacy systems; why solving customer pain points should be top of mind; how to disrupt business models; compliance as a culture; and the need for greater transparency and collaboration between government, regulators, insurers, and InsurTechs.
About the panelists
Andrew Stabback is the Founder and Managing Director of Australian Financial Publications (AFP), a financial media company that delivers high-quality industry news and events across Australia, New Zealand, and Asia. Andrew regularly features in industry columns, panel discussions, and roundtables that discuss major topics shaping the financial services sector.
Sally Loane joined Financial Services Council as Chief Executive Officer in December 2014. Prior to this, Sally worked in the corporate sector as Director of Media and Public Affairs at Coca-Cola Amatil from 2006-2014. She also spent 25 years as a journalist for Australia’s major print, radio, and television media organisations.
Vanessa Dobson leads the Munich Re Research & Development team to deliver strategic innovations and a holistic approach to risk. Vanessa’s specialties include research and development in the life insurance industry; and optimising portfolio-level risk management via strategy, insights, technology, and creative leadership.
Brenton Charnley is a strategy, innovation and operations specialist and Founder of InsurTech Sydney. Brenton is passionate about inspiring and empowering leaders to solve complex problems and build scalable businesses. He has over 14 years’ experience helping entrepreneurs, teams and corporate executives embrace new ways of thinking and doing business.
Shane Baker is CEO of experteq, an Australian-owned and operated technology business for the banking and finance industry. Shane has extensive experience working in the IT, finance, and professional services sectors, both in Australia and internationally. For almost three decades, his ambition and dedication have paved the way for experteq’s strong track record as a trusted technology partner for financial services.