Technology can transform and improve how the property/casualty insurance industry works on both the carrier and broker sides of the equation, asserts Hamilton Insurance Group CEO Brian Duperreault.
Duperreault, the former head of ACE Insurance and global broker Marsh & McLennan, spoke about the impact technology is having on brokers and insurers during an interview with Carrier Management at this fall’s Reinsurance Rendezvous in Monte Carlo.
He said that technology has a wide impact on the industry, affecting how insurance is transacted, the role performed by brokers, how carriers structure their workplaces and whether younger people will join the industry. At the same time, Duperreault said the property/casualty insurance and reinsurance sectors remain inefficient even with the increased use of technology, with too much of the premium dollar still going to administrative and acquisitions costs.
Duperreault said that more can be done to squeeze these costs out of the system, and that the key to this trimming these costs is technology.
“I was happy to be a CEO of a broker, Marsh & McLennan. I saw the other side and there’s inefficiencies on both sides,” Duperreault said. “Technology is the way through to get a better product to the client for a lot less. It’s just inevitable,” he said.
Duperreault said technology can have a huge impact on the data analysis side of insurance.
“Technology can make it so much better. It can make it faster. It allows you to digest massive amounts of data that you couldn’t in the old days do. It gives you the opportunity to take nontraditional data and match it with traditional data to make a better decision, to have a better insight into the risk,” Duperreault said. “You can do it in an efficient way. A much more efficient way than we do today.”
Technology can also help lower costs on the brokerage side, Duperreault said, which he believes is too focused on facilitating the transaction and not enough on giving advice.
“What happens with this trend in technology is the transactional efforts become quicker, better and require less human intervention,” Duperreault said. “That shifts the activities of the broker to where it belongs in the first place. It belongs in the advice.”
According to Duperreault, what a client needs is the best possible advice about what it should do with its risk, and that is where technology can make a difference.
“Technology makes the broker better because it forces the broker into really doing the thing that creates the most value,” he said.
As important as lowering costs is, attracting young people to the industry matters to its future, according to Duperreault, who believes technology plays a major role here also.
In order to attract young people, the industry may have to change how it works because millennials are often very tech savvy.
“They like flat organizations. They like to be involved early. They bring certain skill sets that we need. They’re fluent in the technology that we need to deploy in our business,” he said of millennials.
(Accompanying photo from the International Insurance Society.)