In this debate Fei Zhang and Petra Wildemann discuss the essence of insurance with respect to risk analysis, prevention, preparedness and reimbursement. They compare the origin of the insurance industry with that of its sister industry, stock trading. They agree that both industries started with similar paper certificates and yet the two industries today have very different levels of digitalization in the full cycle of contract management.
The essence of insurance is the understanding and controlling of risks as well as protecting businesses and individuals from the devastating effects of possible dangers, losses or injuries. So although the fundamental goal of insurance is to mitigate risk and remediate losses, the industry spends a huge amount of time and resources in processing “legal papers”. The insurance industry has a proven record in leading and driving safety and security behaviours in the auto industry, the health industry and nearly all other lines of business. However, the minimization of data and the lack of transparency of insured data from the insured to the insurer make it more difficult to develop new products and services.
The stock market is enormously far ahead of the insurance industry in replacing paper work with digitalized processes. The capital markets have digital market places and shared market infrastructures.
In the article, Fei and Petra discuss what a future insurance digital business model could look like and what the technology pillars of the business model are likely to be. A futuristic risk management ecosystem model, covering front, middle and back offices, could enable customers to have a significant digital footprint in a variety of social media. The article takes a close look at how this could be realized in the different office layers.
We believe that with appropriate layers of capability modules, fulfilled by human and machine working in close coordination, a much more efficient digital business model of risk management ecosystem can be built. In our next article, we will analyse the digital platform strategy of PingAn through the lens of such a future digital business model of risk management.
ABOUT THE AUTHORS
Petra Wildemann is the Chair and Founder of the Swiss Cyber Think Tank (https://www.risk-cyber-insurance.com), a business networkof like-minded peoplefor Cyber Risk & Insurability, providing an industry-wide networking platform for insurers, technology and security firms. As a qualified actuary for Life Insurance and Property & Casualty Insurance in Switzerland (SAV), Germany (DAV) and UK (IFoAAffiliate), her specialisation includes risk management on a variety of local and global risks. Of late, she has expanded her focus to also include the challenges of modelling the riskson Pro-active pricing and incentive models.
Petra is a memberof the AustralianInsurance Cyber Think Tank (www.linkedin.com/groups/13606933/)and theASA Groupe des Dames de SAV (www.linkedin.com/groups/13606933/).
Fei Zhang istheHead of Blockchain at Allianz Group andwasco-founderandCOO of the B3i consortium (www.b3i.tech),a global (re)insurance transaction platform based on Blockchain technology.Fei has 15+ years ofinternational experience in designing, implementing and drivingdigital technology innovations in the consulting, telecom and insurance industries.Fei has a mixed backgroundin electronicengineering, computer scienceand MBA from INSEAD. RecentlyFei hasrefocused his careerdriving Insurtech ventures and investments in the insurance space.