News eDaily12 Sep 2017

InsurTech:Open architecture enables traditional insurance model

12 Sep 2017

Three leading areas where analytics can help with insurance industry growth - cyber risk, casualty catastrophe risk, and pathogen risk - could become increasingly insurable through collaborations with InsurTech companies, and technology and analytics providers, thereby opening up new opportunities for insurers and reinsurers to provide new and enhanced products, says Aon, the leading global professional services firm providing a broad range of risk, retirement and health solutions.

Aon yesterday launched its annual Global Insurance Market Opportunities (GIMO) report, which examines key areas of potential growth for insurers.

The study highlights that InsurTech could be an enabler rather than a disruptor of the traditional insurance model. The fast-growing entrepreneurial Insurtech segment – that has secured approximately US$14 billion in investments to date across more than 550 start-ups globally – may have a more supportive role for insurers than previously thought via “open architecture innovation”. Established organisations play an important role in open architecture innovation, by collaborating in a framework which has both standards that enable scalable solutions for clients and the flexibility that encourages entrepreneurial innovation.

Meanwhile, the on-demand economy (ODE) is presenting both opportunity and disruption to the traditional insurance sector, through the requirement for a greater range of time-based insurance products that recognise that assets such as cars and homes are increasingly used on both a commercial and personal basis – driven by the increasing utilisation of services such as Uber and Airbnb.

Mr Paul Mang, Aon’s Global CEO of Analytics, said: “We know that the insurance sector is facing challenges in the current macroeconomic environment; so we should expect leading organisations in the industry to drive change. We are already using technology to make us more efficient as a sector, and to expand into emerging risk markets. However, the true transformation will happen as we re-imagine risk management altogether. In this new environment, collaborations, or what we call open architecture innovation, will be key to creating net new growth.”


 

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