Digital innovation spells an opportunity for insurers to re-express the essence of the industry as the ultimate community tool that facilitates the management and sharing of risks.
With the digital revolution increasingly driving disruption in the social, economic and political spheres, the concept of insurance resonates more strongly than ever as a solution for global resilience, said Willis Tower Watson’s CEO of Capital, Science & Policy Practice Rowan Douglas.
Speaking at the Asia & Oceania Association of ICMIF (AOA) seminar in Hong Kong yesterday, Mr Douglas, who is also the founding co-chair of the Insurance Development Forum (IDF), said that the IDF has provided the insurance industry with an avenue to integrate its discussions into senior levels of policymaking.
Recounting the IDF’s involvement at the G20 Summit in Argentina last month, Mr Douglas said policymakers are today more in tune with the role than insurance can play in solving problems such as food security and infrastructure development.
“Insurance is an instrument that is attractive in any country and it could be the integrating fuel that can overcome some of the fragmentation issues we see today. It would be attractive if the insurance sector can offer a global risk management system which would benefit every country,” he said.
With the AOA seminar targeted at the cooperative and mutual insurance segment, he believes the collaborative nature of co-ops and mutuals would be conducive in creating shared systems to allow for better delivery of insurance solutions to its members.
Fintech and InsurTechs
The impact of InsurTech on the industry has been felt, and is pushing insurers to transform themselves. However, one of the concerns that some policymakers have is the prospect of job displacement as automation and artificial intelligence become more prevalent, said Asian Development Bank’s principal financial sector specialist Arup Chatterjee.
“I think when we engage policymakers, we can provide the comfort by saying what new jobs will be created from this digital revolution as well as the skill sets required for them,” he said.
Citing the potential for increased usage of blockchain technology within the industry, he believes its tamper-proof nature would have the effect of building greater trust towards insurance.
“I believe it could be a differentiator in instilling trust because there is a demonstrable effect for people.”
He also pointed out the need for regulators to be in sync with various new technologies and set out “proportionate and enabling regulations”.
“I also do feel that regulators need to make the boards of (re)insurance companies more responsible in terms of managing and evaluating risks associated with technology because risk management is a corporate governance function,” said Mr Chatterjee.
The AOA summit ends today. A more detailed coverage of the event will be available in the January edition of Asia Insurance Review.