Mark McLaughlin, Global Insurance Director at IBM, was interviewed by A.M. BestTV at the Meeting of Reinsurance Officials 2018 in Montreal. A.M. BestTV delivers A.M. Best’s coverage of the insurance industry in a television-quality format. In this interview with John Weber of A.M. Best TV, Mark describes how insurers and insureds benefit from four main changes happening in the insurance industry. The transcript of the interview was shared as a blog by IBM here and is shared for ICMIF members below.
A.M. BestTV: What do see as some technological changes taking place in the insurance industry?
Marc McLaughlin: I think there are four big areas. The first one is data – the ability to capture more information about risk to use mobility and IoT (Internet of Things) and a number of different technologies to… understand risk a little bit better.
The second big change is artificial intelligence and the ability to analyse that data and find insights about both risk and about the underlying end-insureds who have to take action to potentially reduce or eliminate those risks.
The third big area is cloud, and the ability to take all that information and pull it up to the cloud where it can be operated on at-scale, or where you can connect to different data sources, where you can connect to different models, different AI tools and… bring it all together to provide a holistic risk experience.
The fourth big change is the movement of the insurance industry to industry platforms – the idea… [of] insurance as a service, in the way that today we think about cloud computing-as-a-service or software-as-a-service. We now can take the entire insurance stack and provide that via a technology platform on a per-policy, per-year basis. It makes it a lot easier to pursue the innovative models that all these technologies make possible.
AMBTV: How do we take this technology and mitigate risk and make the world a safer place?
MM: You can take these technologies and understand and measure the risk going on in the marketplace better. You use the IoT data, use the monitoring of financial transactions, use health-monitoring to connect to risk more thoroughly and identify… areas where we can potentially reduce risk and provide advice and products at the point of risk, or maybe value-added services around the risk, to help the end-insured ultimately reduce their risk exposure.
AMBTV: Do you think insurers are going to be able to take all this data, interpret it and make it customer positive experience?
MM: Absolutely. I think a lot of this space has to do with how to frame things appropriately for the end insureds. If I offer them a watch or… tool that says I’m going to… monitor you and raise your rates if you do something bad, no one reacts very well to that. But if I provide tools to help [manage risk effectively, reduce the probability of your team driver getting into an accident, manage your health better, manage your financial situation better] and plan for retirement by monitoring those transactions and alerting…to issues that are impacting that – it becomes a more positive conversation.
And it’s a conversation I get to have more frequently with the end insureds. So, technology gives us the opportunity to become, instead of risk remediators, true risk partners to help improve risk around the world.
Watch the interview with Mark McLaughlin here.
Watch all the interviews from the ICMIF Meeting of Reinsurance Officials 2018 here.