Future of Insurance - November 2020

Future of Insurance – November 2020

How connected motor insurance is driving growth

While personal black-box motor insurance seems to have plateaued, its commercial counterpart shows potential

Sensors today are everywhere – in our homes, our streets and on our wrists – and businesses of all shapes and sizes are taking advantage. The dusty old insurance sector, isn’t exactly known for taking the lead in cutting-edge methodologies. In one area, however – that of telematics, a risk assessment model that combines telecommunications and sensor technologies, informatics and computer analytics – it’s been leading the way for a surprising period of time.

As Matteo Carbone, founder and director of global insurance think tank the Connected Insurance Observatory, points out, personal telematics-based motor insurance has already been around for 15 years. It brings benefits for both the insurer and the insured – enabling the former, who would traditionally rely on historical data and client reports, to assess risks much more accurately, thus offer lower premiums to the latter, provided they don’t display reckless or incompetent driving behaviour.

Additionally, technology has vastly improved since telematics emerged on the scene. Today black box insurance – also known as connected car insurance – doesn’t necessarily have to involve devices being mounted on automobiles. Alternative, and often more reliable methods, include smartphone apps an on-board diagnostics (OBDs) – which can be plugged into the car’s OBD port, while some car manufacturers already provide embedded solutions. Moreover, this usage-based insurance market offers opportunities to find the scheme that suits the insured party’s driving habits the best: you can pay as you drive (PAUD), increasingly popular during lockdowns; or pay based on how you drive (PHYD), a favourite with safe drivers.

In the UK, telematics is a big hit among new drivers, especially teenagers and their parents. As one of its users put it, having telematics in your car is “like having a driving instructor still with you”. The device will register how sharp your corners are, how hard you brake, and the smarter ones can even tell when it’s not the policyholder driving the car.

The telematics device or app will also clock whether you hit urban roads or motorways more often, at night or in broad daylight. Its approach to risk is somewhat different from that taken in credit rating, for example. While a blank credit record might be an ideal state from a customer’s perspective, the ideal borrower from the bank’s perspective repeatedly takes out credit to demonstrate their reliability in paying it back.

In contrast, instead of encouraging higher mileage to prove your skills, telematics devices disincentivise driving under sub-optimal circumstances. Some of them even impose curfews, with one teenager complaining how friends took the mickey out of him when he needed to drive back home before 10 pm.

This “nannying” feature of telematics insurance, together with the fact that prohibitive premiums tend to plunge when drivers reach 25, are the factors that might jointly explain the precipitous drop of market penetration to 14 per cent for the 25 to 49 age group.

Alastair Walker, editor of British online magazine Insurance Edge, goes as far as to say that “the hope of mass adoption of telematics for personal motor [insurance] has stalled. Somewhere around 20 per cent of drivers use them, and it has been flat now for several years. But those are generally the lowest-risk drivers. Beyond that, there is no incentive.”

While governments mandating telematics or the spread of advanced driver assistance systems (ADAS), including drowsiness detection, lane departure and forward collision warnings, may prove gamechangers in the personal motor insurance line in the long run. But for a more imminently emerging trend, we might need to look to the commercial branch of telematics insurance.

Is commercial auto insurance ready to take up the baton?

Commercial motor insurance could end up a more likely adopter of telematics than personal, as the use of the technology in fleet management has already paved the way for it. In fact, B2B telematics insurance can also be regarded as an additional use-case for fleet management technology.

The same devices that monitor the location and movement of commercial vehicles or fleets, track their diagnostics, flag their unauthorised movement or help achieve route and fuel efficiencies, for example, can also be leveraged to monitor driver behaviour and determine risk factors to offer personalised insurance policies. Here, the uptake of the technology is not hindered by trade-offs between personalisation and privacy. The installation of telematics in the vehicle is the choice of the fleet manager, not the driver.

With claim costs rising steadily and distracted driving being the cause of a quarter of fatal accidents, motor insurers have a vested interest in finding ways of changing driving behaviour for the better. Naturally, there are significant differences between personal and commercial telematics solutions, therefore the number of insurers who have the necessary expertise and infrastructure to handle comprehensive commercial solutions is still limited.

Cross-sectoral partnerships, however, are on the rise. Take, for example, WeFlex – a vehicle leasing business that provides cars to Uber and other ride-hailing services – and its partnership with Zego, a London-based insurtech – the first to get its insurance licence last year. Instead of a one-size-fits-all policy, Zego’s calculation of premiums for WeFlex’s 700-strong fleet is driven by live data as well as the historic behaviour of the fleet’s drivers.

Telematics, in this case, gives WeFlex a bigger and more focused picture of its fleet and its drivers’ behaviour, while Zego has a better understanding of the risks it underwrites. Meanwhile, a decrease in the number of accidents works in both partners’ favour.

Articles on Zego’s expansion and new players entering the telematics fleet insurance market suggest that this line of business has future potential. General Motors (GM), for example, partnered with Italian multinational technology company Octo Telematics four years ago to provide usage-based insurance and fleet management services for its embedded OnStar technology.

Fast forward to November 2020 and you can read news of GM going it alone, as the auto giant jumps back into the insurance business with its OnStar brand. The new service is expected to be rolled out across the US by the end of 2022. Until then, watch out for, says Carbone, “a new IoT insurance wave”.

By Zita Goldman

How Covid-19 can drive safe digital insurance transformation

Almost 20 per cent of insurance claims contain an element of fraud, according to a recent FRISS survey of insurers from 52 countries.

That’s a high number. Insurance is founded on honesty, and most policyholders are honest; those who aren’t drive up premiums. Fraud cannot be accepted as a cost of doing business – as Celent analyst Marty Ellingsworth says, “Fighting fraud is not a strategic competitive advantage. It’s the right thing to do.” And with Covid-19 impacting the industry, automated risk analysis is a strategic necessity for a safe digital transformation.

Covid-19 insurance trends

Covid-19 has left us with the worst economic crisis in living memory, and the effects will be long-lasting. As government support tapers off, the anticipated increase in unemployment and economic uncertainty will put more pressure on households and businesses. That will give rise to an increase in insurance fraud. Fortunately, most insurers realise quality data and real-time analytics can help solve the problem.

The survey shows Covid impacting insurance companies in three major ways:

Increased workloads
Fewer inspections because of remote working
An increase in suspected or proven fraud

While fewer claims have been made since the pandemic, insurers are also reporting more fraud. The schemes are similar, but people are committing fraud earlier due to anticipated financial problems.

The need for real-time fraud checks

Covid-19 has also forced organisations to focus more on digitalisation and reducing costs. A more digital process without fraud checks can leave insurers exposed.

A recent example was a tattoo parlour that reported a break-in, with a lot of cash stolen. The amount represented a lot more than the shop’s normal turnover, which real-time detection can flag.

Such proactive alerts that are based on events and data need to be part of your digital process – they can help streamline the workload, reduce the cost of claims and prevent payout of fraudulent claims. Consistently applied, they’ll help you fast-track genuine claims while freeing up time to investigate suspicious activity.

Leverage the potential to drive trust

We all hope the impact of coronavirus will soon fade – however, the economic fallout will last for a long time. In a survey by the ACFE, 92 per cent of respondents expected an increase in fraud over the next 12 months. As insurers drive digital change, it is important they remember to include fraud prevention as part of their digital toolkit. We see insurers moving towards the real-time monitoring of risks and fraud and proactively monitoring policies and claims throughout the life-cycle, to make sure they can run a healthy portfolio.

We are working closely with our customers to keep risk and fraud schemes relevant and up to date – and we’re proud to note that last year our customers were able to save more than $1 billion as a result. So let’s not wait for what Covid brings us, but proactively start fighting fraud. Your honest customers deserve it.

By Christian van Leeuwen, CTO and co-founder, FRISS

Christian.van.leeuwen@friss.com

THE FUTURE OF CLAIMS: Delivering at the moment of truth

Richard Della Rocca, President, Claims at Verisk

Like most industries, property and casualty insurance has been upended by disruptive technology and rapidly changing customer expectations. Customer experience is now one of the primary ways companies of all types differentiate themselves and compete. For insurers, it’s become the key driver of innovation and is shaping the future of claims.

Claim handling is the insurer’s moment of truth. It’s when they fulfil the fiduciary promise of the policy and where customer loyalty is won or lost. After a loss, customers want to be made whole as quickly and easily as possible. That could mean quick resolution after clicking a few buttons in an app, a conversation with an adjuster to better understand the claims process or getting alerts as the claim moves through an expedited process. Some carriers are progressing towards this future state by investing in automated technologies. But others are lagging and lack the technological capabilities and resources to deliver on rising policy-holder expectations.

Covid-19 has only accelerated the pace of change – and exposed gaps. While early adopters were already implementing innovations such as virtual inspections and were able to quickly pivot early in the pandemic, others are having to scramble to catch up and remain competitive. Now, the pressure is on. The future of claims is about elevating the customer experience, and carriers that aggressively pursue digital enablement today will be primed to excel tomorrow.

Keeping pace with change

When stay-at-home orders swept across the nation earlier in the year, it was a time of reckoning for insurers. Just prior to that, claims teams had on-site inspections scheduled and field adjusters were poised to go to the scene of accidents. That all changed in an instant. For some, it simply meant ramping up virtual inspections. For others, it became a time of uncertainty and concern. We’re working with carriers from different spectrums of their digital maturity, helping them transition to virtual inspections through video collaboration with policyholders. By mid-Q2 2020, more than 90 per cent of simple claims at the largest insurers were adjusted virtually, and customer satisfaction had improved.[I]

Enhancing backend efficiencies

Covid-19 has revealed deficiencies in operations that enable digital claims experiences that engage policyholders on their terms and keep insurers’ claim management standards intact. Digital transformation requires deep data stores and powerful analytics to process and analyse disparate inputs and pathways of every claim scenario.

For example, in a bodily injury claim, predictive models can analyse a claim’s attributes at intake and provide a severity score to quickly triage the claim to the appropriate handling unit. From there, the claim can be analysed against historical company data to generate an accurate general damages assessment. And if the claimant obtains a solicitor, legal analytics can provide insights on the defence’s case outcomes to help adjusters determine whether to settle or litigate. These capabilities require the right combination of data and technology to enhance efficiencies. Those components are also critical to another important area of the future of claims – fraud detection.

Strengthening perimeter defence

It’s estimated that one in 10 claims may contain some element of fraud.[II] With fraudsters constantly pressure testing carriers to discover which have weak defence systems, a strong perimeter defence is critical.

Imagine this: your insured was involved in a car accident where the claimant was injured. Your adjuster receives a medical package and damage photos from the claimant. As the adjuster enters claim information in your system, fraud analytics flag the claim and recommend further investigation based on a triggered fraud scenario. Meanwhile, image forensics reveal that the loss photo was taken prior to the date of loss. The claim is referred to SIU and managed through an automated system to speed resolution.

Those types of insights and tools are vital to helping prevent insurers from paying suspicious claims, as well as providing necessary checks to quickly process genuine ones.

The future: imagine new possibilities

The same data and technology that can expedite claims processing and detect fraud have the potential to catapult insurers to a new level of innovation – proactive claim prevention.

As weather analytics automatically determine which policy-holders are affected by a hailstorm, insurers may immediately deploy aerial imagery to identify damage to insured property, notify insureds and instantly start the claim process for them. This type of innovation can redefine insurance companies, from being organisations you contact when something goes wrong to becoming innovators that deliver proactive customer service that improves the quality of life.

The future is possible today with Verisk. We power, develop, and accelerate digital transformation with unmatched data, integrated technology, and deep domain expertise. Let us show you what’s possible.

For more information, visit our website or contact cbarr@verisk.com.

^[I] Celent. Data Science in Claims – Digital Acceleration and Customer Delight.

^[II] Insurance Information Institute. Background on: insurance fraud. https://www.iii.org/article/background-on-insurance-fraud

How tech is helping us take more control over our healthcare

Benenden Health CEO Bob Andrews discusses game-changing health technology and why there is no one-size-fits-all solution to health insurance

As the UK’s second national lockdown continues, the healthcare sector remains under great strain. The pandemic continues to impact every aspect of our day-to-day lives with changes to the economy, working habits and the healthcare system.

With scheduled operations cancelled because of the squeeze on hospital capacity and staffing, it’s no surprise that an increasing number of people in the UK are opting for private healthcare for a range of procedures, to ensure that treatments can still go ahead.

I believe the unprecedented challenges we have faced as a nation over the last eight months will have a lasting impact on the way we think about our own personal health, as we become increasingly concerned about how our lifestyles may impact our long-term wellbeing, as well as our financial stability.

It will be vital that individuals take greater accountability for their future wellbeing, and the market is likely to see more personalised healthcare and insurance options available to cater to that need.

Personalised healthcare

The future of health insurance must allow individuals to take more responsibility for their health, and we must see greater recognition that one size does not fit all when it comes to healthcare.

Ethically sound private healthcare provision can play an extremely beneficial role in a mixed economy and helps to guarantee that individuals receive the support they need, when and how they need it.

Private healthcare not only offers great support to families and businesses but to our NHS too. The provision of private healthcare should not be in direct competition with the NHS, nor the expensive luxury it is often perceived as. Health insurance doesn’t need to be costly – instead, it should be a crucial part of the matrix to keep the nation healthy.

It is increasingly important to ensure that people can choose the services they want as part of their personal healthcare package, and we are likely to see a greater movement towards a more “tick-box” approach whereby individuals can select the specific cover they need. This personalised approach could mean that individuals will turn to different providers for different elements of their package, rather than having everything in one place.

It is critical that individuals are well informed to make choices about their own health, to protect themselves now and into later life. Not only should health insurance be something that people think about when they get ill, it should also be an important, proactive investment that individuals choose to make for their own future.

Businesses are increasingly offering bespoke healthcare packages for all employees, rather than just for very senior members of staff. The financial impact of the pandemic has led businesses to focus more on delivering effective, tailored benefits for all employees. The multi-generational nature of the workforce also means that employees will have differing needs – emphasising the point that one size-fits-all healthcare is not appropriate.

Benenden Health’s recent mental health report revealed that younger workers value mental wellbeing support the most, with a whopping 78 per cent of 18- to 24-year-olds saying they would leave a job if they did not feel adequately supported, making this a critical business decision and one that makes financial sense.

Game-changing health tech

Throughout the pandemic it is vital that individuals still have full access to the support and advice they need to remain safe and healthy.

Since the first lockdown in March, many healthcare providers have switched their services to digital offerings, ensuring that members receive the support they need in an environment where they feel most comfortable. At Benenden Health, we have been able to offer a 24/7 GP helpline and 24/7 mental health helpline for several years to ensure that our members always have access to support and advice, so we were well placed to adapt.

We also considered how services such as physiotherapy could be offered remotely, as while online fitness classes and GP services have been increasingly popular with the more tech-savvy, it is crucial that we can offer alternative services for those without access to this, so they do not feel isolated.

Insurance providers are also increasingly offering incentives for people to sign up, with rewards for staying healthy. At Benenden Health, we offer our members great discounts on digital fitness subscriptions, activity trackers and lifestyle shopping vouchers throughout their membership. I think this highlights a greater switch towards preventative action and the use of data when it comes to health insurance, as individuals want to know they have this support available but are becoming more committed to staying healthy themselves, and are rewarded for doing so.

I believe technology can be a game-changer for healthcare with so many options available – from new gadgets to aid remote services or track exercise and heart rate, to sensors or pressure pads to monitor vulnerable people. We were already making great movements in how we use technology to monitor our health even before the pandemic hit, but this is likely to accelerate adoption further with greater consciousness about our health and the safety of our loved ones.

As healthcare becomes more tech-focused, it is possible we’ll see new players in the market such as Amazon, Google and Apple, but the question remains whether something as important as healthcare can be put in the hands of organisations that do not have experience and existing trust within the sector.

Health technology will enable individuals to receive the support and services they need at the touch of a button and allows people to be more aware of their health. More technology in the home is also likely to provide an opportunity for vulnerable people to remain in their home for longer as family members can remotely check they are safe and be alerted to any warning signs.

The future of private healthcare insurance will see this technology and data put to good use, and we will also see more cooperation between providers in the coming years. Crucially, however, whoever you are and whatever your circumstances, you will be able to build a package that works specifically for you.

Healthcare will become more flexible, be delivered in the way you want it and be affordable for everyone. By taking responsibility and investing in our own personal wellbeing, together we will improve the nation’s health.

Benenden Health offers affordable, high quality, discretionary private healthcare to both its consumer and corporate members. This includes round-the-clock care such as 24/7 GP and mental health helplines, plus speedy access to services such as physiotherapy and medical treatment so individuals can have peace of mind that they can ask for help whenever they need it. As a not-for-profit organisation, Benenden Health offers support to its more than 800,000 members at the same affordable cost of just £11.50 per member per month.

Customer experience is the driver of insurance success, but automation is the engine

Charlie Newark-French, Chief Operating Officer, Hyperscience

Imagine the competitive advantage an insurance firm could have by being able to confidently state that it pays out most insurance claims within seven minutes, and actually have the cutting-edge tech and data to back it up. Thanks to AI-driven automation that begins in the back office, we’re on our way to making that a reality.

Changing market dynamics are driving an automation revolution within an insurance marketplace that competes on two factors: cost, and customer experience. Insurers work to mitigate costs and risks, while savvy consumers demand faster service, increased transparency and greater control over the products they purchase and how personalised their plans are. The ability to deliver on this begins with data – the critical “step zero” of any business process.

Insurers today succeed or fail based on how they process and use data to make swifter and smarter business decisions. Yet the insurance industry continues to struggle with the first mile of data processing, partly because that information is unstructured and enters an organisation in various ways, such as online portals, PDFs uploaded to an email, or physical documents. Classifying this information, extracting the data, and getting it into the correct system of record remains extremely manual, leading to unnecessarily complex workflows, delayed processing times, high costs and increased errors.

Legacy band-aid solutions

If you were to peek under the hood of most major insurers, you might find a complex patchwork of outdated, legacy technology and cumbersome, manual workarounds. Companies today are spending around $60 billion each year on data entry to turn unstructured document data into formats that can be read by various systems. This creates an information and operational bottleneck that prevents customers from getting the experience they demand – and have come to expect – and puts an insurance organisation’s position in the market in jeopardy.

A better way: AI-driven automation

Insurance leaders everywhere are rethinking how they operate to reduce manual burdens, modernise existing processes and unlock a more agile, customer-centric approach. According to McKinsey & Company’s Insurance 360° benchmark, “IT costs per policy for players with modernised IT can be 41 per cent lower than those of players with legacy IT systems.” Intelligent automation technologies that leverage the latest advances in AI and machine learning (ML) will become the critical driver to greater data, fewer errors and faster and more reliable insurance processing – whether that’s processing a life insurance application or handling a medical claim.

Leading insurance companies are already using these innovative solutions to automatically classify and extract data from diverse document types, including those that are distorted, handwritten, of low resolution and more. These solutions continue to learn and improve based on the data they’re exposed to, leading to fewer errors and greater automation over time.

One Global 200 insurer we work with receives more than 20 million pages within its life and retirement business alone each year. Relying on people to manually index, route and key the information was unsustainable from a cost and resource perspective, and most importantly, prevented the firm from responding to customers in a timely manner and maintaining a competitive advantage. After testing legacy, rules-based technology that failed to deliver accurate data, the firm adopted intelligent document processing (IDP) software and was able to reliably automate document processing and data extraction, soon realising a 70 per cent reduction in manual entry – almost 30 minutes saved per transaction. The solution enabled a smoother experience for brokers and customers alike, freeing up critical resources to focus on delivering more innovative products and services and staying ahead of market conditions.

By investing in innovative automation technologies, insurance leaders can reimagine workflows and processes and build a new digital assembly line that seamlessly orchestrates work between software and people, based on the needs of the task and the strengths of each. By enabling the free flow of data, insurance companies can increase the quality of their business decisions, build a workforce more prepared to meet the future, and facilitate a performance-driven organisation with superior outcomes.

Discover the automation platform Global 2000 insurers trust with their mission-critical processes. Learn more.

The chaos of the pandemic has provided opportunities for insurers

It’s safe to say that 2020 has been a year like no other. The turbulence Covid-19 has brought to the insurance sector has certainly been detrimental to growth and profitability. For many product lines, demand is down, and investment returns have been limited by low interest rates. But amid the chaos, the industry is taking advantage of an opportunity to transform how it operates and engages with its customers. Digital transformation was important before the virus hit, but the pandemic has accelerated the need for digital solutions, both within the customer’s buying journey and for the insurer to deliver value through new distribution mechanisms and product innovation.

As we head into 2021, insurers will need to contend with an unpredictable virus and its economic consequences, dramatic climate events and the aftermath of a polarising US presidential election. But in midst of chaos, there is opportunity. Forrester predicts that in 2021, increasing appetite for usage-based insurance (UBI) in personal auto will drive insurers to rethink how they help customers discover and use auto insurance. Adoption of UBI has been modest in many regions, but Covid-19 has ushered in a new paradigm where consumers are more conscious about price transparency. This consumer enlightenment will result in strong new business growth in UBI across the sector. Forrester also predicts that US life insurers, recognising a structural shift where employers replace employees with contractors, will get serious about digital individual disability sales. The gig economy has transformed how the world works – literally – and gig workers need injury protection, too. Start-ups are exploiting this need. Expect incumbents to jump on the bandwagon.

Product and services innovation bode well for the sector, as they create value and differentiation in the marketplace. But the mechanism for prosperity in the new year isn’t singular. In 2021, containing claim leakage will also become a top priority for property and casualty carriers as they deal with exorbitant claim losses from the economic fallout of Covid-19 and global natural disasters. Insurtech, which, following a rough start in 2020, has already recovered strongly, as investors have rewarded the digital mindset that start-ups bring to the market. The new year holds great promise for established insurtechs such as Lemonade Insurance and Hippo Insurance. Unfortunately, smaller, less-known start-ups will find the funding environment challenging as investors take a flight to quality (in the form of “safer” investments).

The societal effects and economic implications of Covid-19 will undoubtedly play out for years. But, with 2021, we open a new chapter in which one thing is certain: change and uncertainty will remain constants in customers’ lives. Insurers must therefore remain vigilant in investing in the digital products, services and capabilities that customers expect

If you want to learn more about the Forrester 2021 Predictions get the complimentary guide here.

by Jeffery Williams, Forrester Senior Analyst

How to avoid technological upheaval: three suggestions for (re)insurance brokers

People often ask us if Relay is meant to disintermediate (re)insurance brokers. It makes me chuckle every time, based on what I have observed in the industry so far, and how we came up with the idea for Relay.

The risk-placement function is a specialised one. Many insurance carriers have created specialised “ceding” functions for reinsurance, but have yet to displace the brokers themselves. In fact, we see a counter-trend at play for “reintermediation”, which Relay is more in favour of, by allowing brokers to move deeper “inland” into their client operations, to optimise and package previously unsupported placements.

Relay helps brokers structure placements at their origins alongside their clients, animating the whole value chain to work more collaboratively. Brokers, alongside ceding departments where they exist, are the natural users of Relay.

We first conceptualised Relay, then called Parachute, as a placement tool to “tech-enable” brokers. While I ran with the idea, I have to give credit to our investor – Highline Beta’s Ben Yoskovitz, who co-authored Lean Analytics – for suggesting it.

Equipped with Ben’s idea, our next step was to speak with brokers themselves. They told us that until we had an actual product and some of their clients on board, they weren’t interested. Brokers are not tech ventures, they said, and they have little time to play with product concepts.

So we followed their advice. We built the best platform in the market for fac reinsurance, for both cedents and reinsurers first. We made it visual, fast, and easy to sign up for online – which apparently no other platform had done until then.

We quickly expanded this platform to B2B insurance placements, and enroled insurance brokers. We took an investment from NFP Ventures, the VC arm of US brokerage NFP. And we finished our broker module for both fac and insurance, with help from NFP and other brokers.

We are now expanding Relay to reinsurance brokers, as well as Programs (in the US sense of the word, i.e. MGA/MGU/TPAs) and Treaty – both of which companies can already pre-sign on to and experience. We think having all risk transfers in one engine will be revolutionary, and we are rapidly proving it.

Along the way, I learned a few things that are relevant to brokers:

Recommendation #1: embrace technology specialists to expand your brokerage’s reach. You will save time and money by working more effectively with insurtech ventures (such as ours).

Many brokers are more worried about disintermediation than they should be, if experiences in fintech or real estate are any guide. This insecurity can drive defensive behaviours, including a lot of money spent on internal platform builds. While internal platforms are sold by their proponents as the only way to achieve control, we have proved that Relay can have brokers digitise faster, better and cheaper while integrating with other systems and retaining control, through our new white-labeled or co-labeled solutions.

Recommendation #2: do not embark into multi-year transformations, but favour agile solutions that will adapt to rapidly changing conditions. Correspondingly, identify internal change agents who are inherently incentivised for tangible results and make them transformation leaders and champions.

Brokers are not a uniform bunch. Even within the same brokerages, we find pockets of progressive brokers who understand that in the 21st century, speed and agility will drive more business than focusing on control and creating more siloes. Find those practitioners and put them in charge, supported by the right external technology partners. Avoid establishing permanent internal transformation roles, rewarded for building the longest, largest initiative possible, and often moving to a new role during the project.

Recommendation #3: broaden your talent pool, and welcome inputs from non-traditional industries and backgrounds.

While brokers are not a uniform group, they lack diversity, just like (re)insurance in general. And that certainly impacts creativity, as countless studies have shown. Hire with a view to greater balance in gender, cultures, ethnic backgrounds and sexual orientation, among others. Don’t just open your systems, open up your mindsets and entire organisations.

Major opportunities are being lost right now by brokerages both large and small, to adapt to changing conditions. Pick bold partners, and go for rapid changes, even if some mistakes are made along the way – innovation rewards those, but not regrets.

I’d very much welcome your perspective – reach me at greg.boutin@relayplatform.com

By Greg Boutin, CEO of Relay

Guiding an ageing population

Dr Matthew Connell examines the best methods to improve financial resilience in later life.

Anyone who has worked in a client-facing role will be familiar with this scenario: they are talking to an elderly client who is unsure of what they need to ask for or even how to navigate the client verification process. In the background, a helpful voice is prompting them with information and helping them frame their questions.

Is this financial abuse? Is the elderly person being exploited? Or are they being given vital help, without which they would not be able to manage their finances? What is the legal and regulatory situation? How can the client’s data be protected, while still facilitating their request?

A wrong move, such as not treating the security implications seriously enough, or not being sufficiently helpful to the client, will result in a serious loss of trust between the client and financial services professionals.

This is only the most basic challenge facing the profession as it learns how to serve an increasingly ageing population. Overcoming each of these challenges requires a strong act of imagination and empathy on the part of professionals to achieve a good outcome for their client.

The kind of knowledge and skills that are needed to service an ageing population rely not so much on technical knowledge about insurance and financial services, but rather on empathy and an awareness of how other people live their lives.

Insuring futures

This kind of insight is at the heart of the Chartered Insurance Institute’s Insuring Futures initiative. It aims to build a picture of the risks people face in their lives, and how the services provided by financial advisers, insurers and the wider community are relevant to these. The first phase of Insuring Futures looked at the lives of women in the UK and how their financial futures were affected by the career choices and caring responsibilities they took on, as well as how they were saving for retirement and how family life affected their ability to save and protect themselves.

The next stage of Insuring Futures will look at the ageing population. It will look at how people build and maintain independence throughout their lives. This means looking not only at financial independence, but also health and mental and social wellbeing.

For many people, retirement can be a time of unparalleled independence – they may have enough savings to afford not to work for the first time, giving them a huge amount of leisure time that they can use to encounter new challenges and experiences, deepen bonds with their family and widen their social circle.

Of course, levels of independence are closely linked to health, but changes in health can also be managed to preserve independence. For example, as we encounter losses in mobility or even in cognitive ability as our lives go on, there are many ways that we can access help or reshape our environment to preserve our independence and increase our quality of life.

Usually, we build this independence in a tactical and unstructured way. We embark on a career based on opportunities that present themselves when we leave education, we amass assets such as houses and pension pots along the way, riding the ups and downs of different markets, and pick up caring responsibilities too. All the time, we are bombarded by advice and expectations around health and mental wellbeing that are sometimes sound and sometimes deeply misleading.

Our work on insightful leadership will look at what people can do during every decade of their adult lives to build and maintain their independence, and look at the kind of conversations people need to have with their families, friends and mentors to create more resilience throughout their lives, right into later life.

Diverse needs

The work will build on the insights from Insuring Women’s Futures, and it will be supported by work with focus groups to better understand the diverse needs of people in retirement and later life. These insights will form the basis of a conversation with members, which will lead to guidance and support for professionals in:

• How we design products and communications for older people that resonate with the way they live their lives

• How professionals can structure conversations with clients that are more relevant to the risks and aims they have

• How advisers can advise their clients’ whole family, rather than just the individual, as they grow older and their plans become more entwined with the needs of that family

The CII will be working with experienced insurance and financial services professionals, charities, policymakers and researchers throughout the process, and looking to produce guidance that puts consumers and professionals in direct touch with each other in innovative and engaging ways.

by Matthew Connell, Director of Policy and Public Affairs, CII