Aon’s James Platt spoke to SiliconRepublic.com about the changing risks within insurance and how the sector is using tech to address them.
Some of the biggest changes happening within the insurance industry are the insurance risks themselves. The climate crisis, for example, can result in a whole host of new risks for insurance companies to consider.
Meanwhile, the evolution of tech has brought groundbreaking innovations but also new risks, from cyberattacks to risks around the use of emerging technology such as AI. Even the pandemic has forced the insurance industry to look at risks such as the effect on supply chains.
Aon chief operating officer James Platt said challenges arise because traditional methods of understanding risk, such as looking from a historical perspective, don’t work on newer risks.
“So, what’s happening in the background is our teams are working to do two things. One is to collect the data that they need for those risks and then the second is to start modelling that in ways that insurers or capital providers will feel confident to put their money behind people’s risks,” he said.
“These models are new. We’re using the latest modelling techniques. We’re building new ways of thinking about it.”
Outside of the risks themselves, Platt also spoke about how technology and data can be used to help the underserved within the insurance industry, those with little or no insurance protection.
He said this might be the case for a number of reasons. “Maybe the first one is education. What do I actually need? The second is around product. So what’s the best product for me to cover those needs that I have? And then the third is, how do we get those products and distribute them to that individual cheaply enough that they can actually afford the product?”
Platt said that technology can be used to address all three problems. For education, he said benchmarking comparison can be used for insurance in the same ways Netflix or Amazon might use it to recommend TV shows.
“When it comes to product matching, we’re beginning to build algorithms which search thousands of products and work out the best solution for an individual,” he said.
“That takes pretty advanced and complicated modelling given the amount of products and different people’s needs.”
When it comes to distribution, Platt said tech can be used along with partners to embed insurance products into people’s everyday lives, while building insurance exchanges can help with comparison shopping so that consumers can find the most affordable product.
“Tech has got a role to play everywhere in getting insurance to the underserved.”