Actuaries, not software engineers, behind insurtech push

The roles of insurer Information Technology teams and management are changing and merging, with insurtechs increasingly being founded by actuaries and other industry veterans rather than tech experts, says Capco APAC Insurance Lead Emma Yang.

Hong Kong-based Ms Yang tells insuranceNEWS.com.au that insurtechs such as OneDegree, founded by actuary Arthur Lee, and Coherent, founded by former Manulife and QBE senior executive John Brisco, are on trend.

“Interestingly, quite a few of the insurtech companies in Asia are founded by actuaries rather than tech people,” she said.

“Actuaries are the ones who really understand insurance very well. To be able to stay competitive you need to understand business and watch the market demands.”

Insurer IT teams will increasingly need to have that awareness and knowledge of options “rather than playing a passive role in the back,” she says, recommending a more proactive role and making strategic recommendations.

“It is really interesting. The traditional way of thinking insurtechs are founded by tech people – we don’t really see that kind of trend any more,” Ms Yang said.

Ms Yang spent three years in the UK where she was Actuarial & Advanced Manager at Deloitte and saw the inner workings of Lloyd’s. Covid has accelerated consumer expectations that insurers will match the service of firms such as Amazon, she says, and while the pace of change in insurance has been slow – held back in part by the onus of regulatory mandates – it is finding momentum.

“It is a very old-fashioned industry with very old ways of working but now all of a sudden we are seeing adoption, new things available,” she said. “With digital adoption and e-commerce everywhere, there is this massive amount of data.”

Use of digital data can help make premium pricing more fair for customers and more tailored, Capco says, adding that insurers can no longer rely on the customer initiating a policy sale process if they want to sustain market share.

Embedded insurance – where cover is packaged as a native feature within the product or service sold by a retailer, manufacturer or other provider – is growing via notable examples Tesla, Uber and Airbnb, and this is “forcing insurers to really rethink and do more”.

“The idea of embedded insurance is not a wholly new concept. What has changed is the consumer, who more than ever want a fuss-free experience which provides a tailored solution at their individual point of need,” Ms Yang said.

Traditional insurance distribution models like white labelling or reselling are being dispensed with in favour of engaging customer experiences using real-time transaction data and tailored solutions, she says.

UK-based Capco fast-tracks digital initiatives in insurance and other financial services. It was acquired by Bangalore-based, NYSE-listed Wipro for $US1.45 billion ($2.05 billion) last year.