How is technology enhancing insurers’ strategic approach?

Sherif Zakhary and Morena Dell’Aglio from Aon’s Strategy and Technology Group (STG) highlight how emerging technologies are transforming the industry

How is technology enhancing insurers’ strategic approach?

Morena Dell’Aglio (MD): New technologies such as AI, machine learning and predictive analytics are underpinning the evolution of the (re)insurance market. We are seeing insurers investing in these technologies to move to a digital insurance business and operational model, and moving away from siloed separate systems, to enterprise solutions where data quality, integration, workflows, automation, analytics, reporting and digital distribution are key.

The ability to stream data and analytics across all areas the business has improved operational efficiencies, and drives new business insights and decision intelligence. This is particularly important where certain skills – such as actuarial – are in demand, and there is now a concerted effort to make sure that their roles move away from processing data to focusing on making better and faster business decisions, while improving efficiency and speed to market.

Are there any particular areas where this transformation is taking place?

MD: I would say there are three key areas. Firstly, in data analytics and predictive modelling, where big data and advanced analytics allow insurers to analyse huge volumes of data to identify patterns, trends, and risks. This allows them to better and more accurately price their products, understand their client base, and predict future losses. Predictive modelling can help in identifying potential fraud, customers segmentation, and customise insurance products to individual needs.

Secondly, in digitalisation and automation. Digital platforms and automation tools help to streamline many of the traditional insurance processes – such as pricing, claims automation, and data cleansing. Automation is reducing both manual interventions and human errors, allowing for faster client service and reduced operational costs. If properly implemented digitalisation embeds insurers’ products into a single integrated distribution channel, and provides a better user-client experience.

Finally, AI and machine learning have become more and more important in various insurance processes; chatbots, for example, can handle customer queries. ML algorithms are helping in claims processing or insurance pricing by assessing historical data or clients’ needs based on the collected information and their behaviour. AI and ML are making processes more efficient, reducing the risk of human error, and also enhancing the user experience.

Where are you making ongoing investments?

Sherif Zakhary (SZ): Financial software and platforms represent a significant investment. For instance, we launched a new pricing platform in June that offers insurers a tool to better optimise pricing, and aims to give them a competitive advantage through enabling better risk selection and analytics.

Our other big investment is in talent. We hire people who have high levels of client empathy – they understand clients’ pain points, their issues and concerns, as well as their opportunities. When you have this empathy with clients, you can build them a strategic plan; you can help them to develop milestones, and to identify and be purposeful about where they are going. This process is both driven and supported by global data and insights. Each client needs their own direction of travel, and we help to distinguish them from the average, always remembering that enduring success isn’t achieved by accident.

How are EMEA insurers specifically utilising STG technology solutions?

MD: STG’s mission is to support our clients to make better business decisions through strategy advice and technology, which are underpinned by Aon’s unparalleled market data. Our technology continues to deliver new capabilities in advanced analytics, automation and workflows, cloud and AI. Our suite of products is used for capital modelling, pricing and reserving across EMEA, enabling insurers to manage their portfolio risk. Insurers use our software to make business decisions with regard to their overall capital, profitability and risk.

Key areas include assessing the capital impact of purchasing a new entity – changing portfolio mix or altering the outwards reinsurance programme; identifying trends in loss patterns to address under-performance swiftly; and updating the underwriting guidelines when moving close to risk appetite.

STG is the only provider offering a suite of technology solutions built on a single platform, so that our clients benefit from integration and automation of their workflows.

How important is talent, given current industry dynamics?

SZ: We are advising insurance leaders on how to adapt their talent pool in what is an evolving business environment. They need to attract people who have technical skill, the ability to collaborate, and who can understand and respond to emergent risk. Digitalisation is a big challenge for insurers in terms of identifying and hiring appropriate talent, and this now extends to artificial intelligence – which may be one of the most transformative technologies we have ever experienced.

So we need talent entering the sector from a wide range of backgrounds – not just those with risk, finance, operations, compliance, and HR expertise, but also with climate, cyber, and geo-political experience. We help our clients to build this new talent pool, in order that they can navigate future volatility and maintain operational resilience.

With all these capabilities, does Aon STG have a specific mission?

SZ: The Strategy and Technology Group was built for times of volatility and complexity, and by taking a fact-based, data-driven approach, we help our clients to understand the nature of risk and, just as importantly, opportunity. Our mission has always been to be holistic, relevant, and executable, as this allows us to serve clients in a way that adds measurable value to their businesses.

Sherif Zakhary is CEO of Aon’s Strategy and Technology Group. Morena Dell’Aglio is global technology sales leader of Aon’s Strategy and Technology Group.