April 13, 2018 09:45
Photo : Freepik
The technological challenges pose a problem for the companies here, said Yvon Charest , and Jean St-Gelais, both presidents and heads of the respective direction ofai Group’s financial and Capital, during a debate organized by the Cercle finance du Québec. Mr. St-Gelais added that insurers cannot do otherwise than to make the technological shift.
Yvon Charest pointed out the difficulty for the insurers to choose the right pane of innovation. The insurer can choose to focus on underwriting, claims management or fraud detection. «We don’t always know where it is going, as technology is changing rapidly. «
Then, it is necessary to also monitor what the competitors. «The neighbor can take another direction and it is this that will be in fashion the following years,» says Mr. Charest. As a result, the long-term planning of investments in the digital sector, is an activity very complex. «The only solution is to be agile, try new things and be able to adapt quickly,» he says.
Jean St-Gelais, approves the statements of his colleague concerning the impact of technological changes on the business environment of insurers. He noted that the insurance industry has long been regarded, with good reason, as an environment to be extremely conservative. There are in the United States the national Association of insurance companies (NAIC). «Jokingly, we said that NAIC wanted to say : «No Action Immediately Contemplated», said Mr. St-Gelais.
Even for an insurer of smaller size, as is The Capital, the issues are the same : we must do better both in the issuing of contracts to pay benefits, » he continues.
The Capital city, The mutual must allocate its budgets in terms of its ability to quickly integrate innovation in its business lines. «We don’t have the right to be wrong, because we don’t have the same financial capacity that a larger insurer,» noted Mr. St-Gelais.
The tools related to the progress of artificial intelligence can speed up the processing of applications. Even in group insurance, a growing number of customers will send their claims through a mobile phone, Yvon Charest. Within three years, customers will want to receive their compensation as possible quickly.
«In a system like ours, there are about 10 % of fraudulent claims in group insurance. It will only be a few seconds to assess the risk connected to the claim. «If you think it may be a fraud, the claim will be processed separately by an expert,» he says.
In individual insurance, it had to be sometime in the average of twenty days to issue a contract of insurance. In 2018, it takes a second to issue the contract for more than 55% of the policies that cover an amount less than $ 500,000. Within a few years, we will be able to offer the same fast service for the very large majority of the customer and for amounts of several million dollars, said Mr. Charest.
In the area of cyber security, Yvon Charest tells a story recent. One of its vice-presidents has hired an external firm to test the robustness of the it systems of the insurer. What was the method of the consultant ? He offered bribes to three employees.
«My V. P. I was not told if the consultant has had success. The information technology risk, up to a certain point, beyond the technology, it’s also about the human, our employees, » says Mr. Charest.
Firms in financial technology, already offer systems that allow to assess the level of risk associated with each employee, and verify if the files they are viewing are compatible with their definition of tasks. «One learns as well as over 6, 000 employees, there are 15 that have a risk profile of 92 % and more,» he says.
According to Mr. Charest, will be nice put a lot of money to make systems unassailable, the risk connected to the human will always be present, and it was all the more important that insurers feed their system a mountain of data.
More generally, Yvon Charest notes that the emerging risk is not always the one that we had planned, and sometimes it happens in an unexpected direction. For example, the business environment of insurers of group plans may be amended by the introduction in Canada of a public prescription drug insurance plan. The increase in contributions to public plans retirement savings also has an impact on the private insurers, he says.
To succeed the technology curve
For his part, Jean St-Gelais notes that the insurers have no choice but to succeed in their technology curve, so the competition is fierce in the sector of damage insurance. In insurance of persons, regulatory requirements force insurers to keep in liquid form a larger proportion of their capital.
The performance requirements will ensure that the investment decisions will be analyzed more thoroughly. The insurer will need to know more about the firms where they invest, says Jean St-Gelais, which includes technology companies.