Innovation is key, insurers told

Consultancy Accenture has urged the Australian insurance industry to make innovation an “obsession” this year, as competition from insurtechs and other rivals is set to intensify.

“Prior to the pandemic years, the Australian insurance sector was not innovating at the same rate as its European and American counterparts,” Accenture Insurance Lead Australia and New Zealand Marianne Hutchinson said.

“This was not because of a lack of willingness or capability, but mainly a lack of necessity.”

She says the status quo no longer holds partly because customer expectations have changed.

“Australian insurers’ traditional ways of operating have meant that it has taken longer for the local market to be disrupted by new entrants and influenced by global trends,” Ms Hutchinson said.

“However, this is changing fast. Consumer behaviour is demanding change, insurtechs are growing, and macro risks like climate change are challenging industry players to reinvent how they work.”

The consultancy listed five key trends it believes will shape the insurance industry this year. They are: artificial intelligence (AI), embedded ecosystems, physical health and wellness, workforce transformation and green policies.

Accenture says the trends identified are based on submissions received last year for the annual insurance innovation awards organised jointly with global financial association Efma.

On AI, Ms Hutchinson says the technology is increasingly becoming an enabler of innovative customer experiences for insurance providers.

In the US market for example, Generali Global Corporate has partnered with Ticinum Aerospace to develop a tool using geospatial datasets and AI to enhance underwriting, pricing, and risk modelling resulting in more accurate insurance protection for its customers.

“We have seen AI used incrementally across the industry, but to really benefit from this technology, an immersive application across the value chain is necessary,” Ms Hutchinson said.