Digitalization

Digitised data and technology-enabled business
  models can lead to improvements and disruptions
    along the insurance value chain. The Geneva Association
      has set out to explore the effects of digitalization on
        insurers and their customers, and to raise awareness
          about the changing competitive landscape.

Digitalization

Digitised data and technology-enabled business
  models can lead to improvements and disruptions
    along the insurance value chain. The Geneva
      Association has set out to explore the effects of
        digitalization on insurers and their customers,
          and to raise awareness about the changing
            competitive landscape.

Digitalization

Digitised data and technology-enabled business models can lead to improvements and disruptions along the insurance value chain. The Geneva Association has set out to explore the effects of digitalization on insurers and their customers, and to raise awareness about the changing competitive landscape.

RESEARCH REPORT

Insurance in the Digital Age

The Geneva Association published its third research report on digitalization, Insurance in the Digital Age, in September 2018. The report reviews key socio-economic implications of the digital transformation of the economy. It indicates that the greatest source of value creation through the digitalization of insurance lies in the ability to develop new and more customer-centric products and solutions.

Digitalization and new technologies can help to improve access to insurance by making it more affordable, easing distribution, creating new markets and thus bringing the benefits of insurance to new customers. However, there are ethical and societal concerns related to digital technologies, for example in the areas of privacy and data protection, and with regard to access to insurance for high-risk individuals.

Digital technology underpins almost every aspect of modern life. Autonomous machines increasingly feature in daily business and customers’ everyday lives. In minimising the human factor, which is usually the main cause of accidents, a shift from loss frequency to loss severity might take place, and losses may accumulate in new ways.

In the face of an ever-increasing digitalization of the economy, and in spite of pervasive trends to personalise more and more aspects of our daily lives, risk pooling through insurance is likely to remain the best response of the industry to the financial consequences of risk in the digital age.

DIGITAL INTERSECTION IN THE INSURANCE VALUE CHAIN

Source: The Geneva Association

Virtual Competition: Online Platforms, Consumer Outcomes and Competition in Insurance

In November 2018, The Geneva Association published the report Virtual Competition: Online Platforms, Consumer Outcomes and Competition in Insurance, which focuses on the increasing importance of online platforms in the insurance industry and its implications for customers, competition and regulation.

Online platforms have the potential to enhance market transparency and consumer convenience. By making information easily accessible, platforms may also help overcome consumer bias in purchasing insurance and efficiently match buyers and sellers. The use of big data analytics, artificial intelligence and cloud computing could equip insurance to go beyond its traditional role by advising clients on how to prevent, mitigate and manage risks.

However, inaccurate or biased information, search results and rankings as well as loss of privacy represent potential risks for consumers. Large platform markets could abuse their position by charging excessive prices or by extending their dominant position to other markets.

In order to ensure a thriving and competitive marketplace, policymakers should consider the role of data when assessing market power and potential anti-competitive conduct. Competition authorities should pay particular attention to practices that have the potential to create market entry barriers, such as best price regimes (often called ‘MFN clauses’). Transparency and non-discrimination requirements for online platforms may play an important role in ensuring consumer trust and a competitive insurance marketplace in the long term.


Read the report


CONFERENCES

IAIS Conference on Big Data and Artificial Intelligence

The Geneva Association participated in the panel discussion, A Brave New World of Big Data and Artificial Intelligence, organised by the International Association of Insurance Supervisors (IAIS) in the context of its 25th annual general meeting in Luxembourg in November 2018.

As digital technologies become a transformational force in the global financial services sector, it is key for insurers and supervisors to understand the relationship between enhanced data collection and the analytic capabilities required. The response of both insurers and supervisors to these new challenges will affect industry behaviour.

China Life Insurance Qianhai Summit Shenzhen, China, October 2018

The number of Insurtech companies is expected to reach 175,000 by 2020. Insurance companies have an opportunity to leverage technology not only for underwriting, claims processing or administration—they can tap into areas along the insurance value chain where Insurtech firms do not participate, such as product development and pricing and risk acceptance.

Antoine Baronnet, Deputy Secretary General, gave an international address at the China Life Insurance Qianhai Summit 2018.