THE INVESTMENT: The insurance industry is striving for more agility, which in German means something like mobility. The motto of this year’s Guidewire Connections industry trade fair is “Agility in Action”. But what is the background? Is agility perhaps just a buzzword or an end in itself?
René Schönauer: No, certainly not. Because today we live in a world that is changing very quickly. The insurance industry is also heavily affected by these external influences. The environment for policy brokers in particular is currently changing fundamentally. Digital sales appear to be the solution of the future because consumers are increasingly organizing their everyday lives online. On the other hand, the desire for a personal contact in emergencies and difficult matters remains. This also applies to younger people, for whom life without a smartphone seems almost unimaginable. Agility is also in demand in companies due to the shortage of skilled workers. Artificial intelligence is seen as a hope for taking over routine work. However, this also requires people to control the machines via prompts.
That sounds more like an even more efficient use of IT systems. Was this change fundamental?
Schönauer: Take homeowners insurance, for example. This product is no longer trivial. Instead of buying standard solutions for certain types of property, customers today want to be able to adapt their police to their own four walls. However, it is very difficult for many traditional insurers to position themselves flexibly for this purpose. This also has to do with your existing IT systems. These are not designed to change the products and processes received. We therefore want to be able to react more easily to changing customer requests and become more flexible overall. In concrete terms, this means that providers can launch or adapt new products more quickly. The Guidewire core system stands like a hub in the middle of the spokes of the software package of a property and casualty insurer.
However, the increasing digitalization of insurers also means that they are more vulnerable to attacks by hackers. The trend towards cloud computing is also likely to play into the hands of cybercriminals.
Schönauer: Today, all companies are affected by hackers and other criminals in cyberspace. This is precisely why we advise insurers to stop looking after their software themselves, as was previously the case. Instead, we use the Amazon Web Services infrastructure for our software services, which offers the highest standards of security and resilience. A maximum level of protection in the cloud has also become so important because even a single incident at a company level can paralyze global supply chains. However, artificial intelligence can help to better detect possible vulnerabilities in the future and simulate impending attacks on them.
What does the ever-increasing connectivity of the world mean for insurers?
Schönauer: A new risk has emerged in the international insurance market: the collapse of global supply chains. In the event of damage, it is often questionable how these risks are actually insured. In the spring, for example, a Turkish port was blocked after a wrecked container ship knocked over several port cranes. Because many parties are involved in such a case, the question arises as to who can seek recourse from whom. This is confusing and there is a risk of a so-called claims leakage. This means that many insurers pay more than necessary out of ignorance.
How can companies better protect themselves against this?
Schönauer: Here too, artificial intelligence can help to structure the information available – even if it is available in different languages and requires a lot of legal expertise. As a result, the better data situation also accelerates the acceptance process by insurers. Because they can better calculate in their underwriting whether they can actually guarantee risky large-scale projects such as a satellite. Although generative artificial intelligence does not make the momentous decisions independently, it can support the people behind the machine with its refined forecast models.
About the interviewee:
René Schönauer is director of product marketing at Guidewire in the Europe, Middle East and Africa region. In this role, he is responsible for the market launch of the software provider's products and services in this country. The customers of the internationally active IT company headquartered in the US state of California include 450 property and casualty insurers – from small start-ups to large insurance groups. The company offers a core system suite for the entire life cycle of the composite division: underwriting and inventory management, collections and disbursements, claims processing and provisioning.
