Insurers must digitalise to meet buyers’ needs, says Greenberg

The financial services industry – including insurance – will undergo massive change thanks to digitalisation, Evan Greenberg, Chairman and CEO of Chubb Limited told MMC’s Young Professionals’ Global Forum Thursday.

We should remember that “insurance companies are already digital companies, just not very good ones!” Mr. Greenberg said.

“But it varies vastly by company, just as the response by companies to transform themselves varies enormously,” he said.

Insurers acquire and – to varying degrees – use large amounts of data to market, underwrite, manage claims and provide risk-related services, Mr Greenberg told delegates.

“We are endeavouring to improve our customer experience more in line with what customers experience with other modern, consumer brands,” he said.

Mr. Greenberg said Chubb’s goal was to become “a digitally integrated enterprise from top to bottom” within a few years. This will not happen overnight, “but it is happening,” he said.

Robotics, automation and artificial intelligence will transform the insurance industry and make the product less expensive, but also improve speed and the relevance of the coverage to buyers, he said.

Insurance buyers’ needs are changing, said Mr. Greenberg, pointing out that traditional, annual insurance policies are not relevant to many businesses in the Sharing Economy, such as Uber or Airbnb.

Insurers also must reassess the way that smart homes are insured, for example, Mr. Greenberg said.

While a traditional homeowners’ policy operates on a “repair and replace” model – where the coverage is a simple financial transaction – insurers of smart homes must move towards a “predict and prevent” model, that would, for example, predict a leak at a home before it happens, he explained.

Over the coming 12 months, Chubb will be very engaged in that transformation, he said.

The use of drones also is hugely powerful for the insurance industry, Mr. Greenberg continued.

For example, drones can be used to assess a building after an industrial fire much earlier than it would be safe for a human adjuster to do so, and to inspect and risk-engineer buildings at the time of underwriting.

Mr. Greenberg also addressed delegates on the theme of the current geopolitical environment and the challenges – and opportunities – it presents to the insurance world.

This is a period of uncertainty both economically and geopolitically, he said, which can be viewed with “optimism and opportunity balanced with caution and concern.”

While deregulation in the US may prompt innovation and growth, social concerns must be addressed to prevent nationalism that might threaten global trade and cooperation, he said.

Multinational companies, such as Chubb, benefit hugely from a “democratic liberal world order,” and this must be preserved, he said.