Turbotodd

Ruminations on tech, the digital media, and some golf thrown in for good measure.

Archive for the ‘insurance’ Category

Moving Insurance

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You may think the insurance business is boring, but hey, my dad was an insurance agent, and he sure was never boring (anything, but!)

But he’s been retired for a few years, and the insurance biz is changing.

Example: TechCrunch is reporting on a London-based startup called Zego, a firm that foresaw the need for gig-economy workers to have insurance. 

Though its first products were pay-as-you-go scooter and car insurance for food delivery workers, it has now announced a $42M Series B raise that will help it cater to a variety of “the new mobility services,” including ride-hailing, ridesharing, car rental and scooter sharing.

From a risk management perspective, things get even more interesting, because the company will now offer a range of policies, “from minute-by-minute insurance to annual cover[age], providing more flexibility than traditional insurers, with pricing based on usage data from vehicles.”

Zego’s mission statement in a nutshell can be found in this quote:

Sten Saar, CEO and co-founder of Zego, said: “When we built Zego from scratch three years ago, our mission was to transform the insurance sector by creating products which truly reflected the rapidly changing world of transport… The world is becoming more urbanized and because of this, we are moving from traditional ownership of vehicles to shared ‘usership’. This means that the rigid model of insurance that has existed for hundreds of years is no longer fit for purpose.”

Written by turbotodd

June 18, 2019 at 3:07 pm

Close Those Circles

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As goes Wichita, so goes Wichita Falls.

Reuters is reporting that one of America’s oldest and largest North American life insurance firms, John Hancock, will stop underwriting traditional life insurance and instead sell only interactive policies that track fitness and health data through wearable devices and smartphones.

Reuters story indicates that policyholders score premium discounts for hitting exercise targets tracked on wearable devices such as a Fitbit or Apple Watch and get gift cards for retail stores and other perks by logging their workouts and healthy food purchases in an app.

Presumably that doesn’t include buying pints of Chocolate Häagen-Dazs.

Privacy and consumer advocates have already raised the alarm, wondering whether insurers like John Hancock could use the data to select for more profitable customers, and penalizing those who don’t close all their Apple Watch circles every day.

And you thought it was just a cool digital watch you could show off to your friends!

Written by turbotodd

September 20, 2018 at 10:16 am

AIG, IBM, and Standard Chartered Bank Deliver First Multinational Insurance Policy Powered by Blockchain

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American International Group Inc., IBM and Standard Chartered Bank plc announced they have successfully piloted the first multinational, “smart contract” based insurance policy using blockchain, a distributed ledger technology.

 

The blockchain solution creates a new level of trust and transparency in the underwriting process, enabling AIG and Standard Chartered to deliver multinational insurance more efficiently. Coordinating management and placement of multiple insurance policies across multiple countries is highly complex. The pilot solution was built by IBM and is based on Hyperledger Fabric — a blockchain framework and one of the Hyperledger projects hosted by The Linux Foundation.

Working together, AIG, Standard Chartered and IBM converted a multinational, controlled master policy written in the UK, and three local policies in the US, Singapore and Kenya, into a “smart contract” that provides a shared view of policy data and documentation in real-time. This also allows visibility into coverage and premium payment at the local and master level as well as automated notifications to network participants following payment events.  

The pilot also demonstrates the ability to include third parties in the network, such as brokers, auditors and other stakeholders, giving them a customized view of policy and payment data and documentation. 

Rob Schimek, CEO of Commercial, AIG said: “Our pilot proves blockchain has a powerful role to play in the future of insurance. Any technology, including blockchain, that can increase trust and transparency for an industry whose pillars are built on that, should be fully explored. We’re excited to be delivering innovation that matters to our clients — and co-developing key components of this new technology together.”

The three parties chose to execute this initiative in one of the most complicated areas of Commercial Insurance – multinational risk transfer – to better understand blockchain’s potential to reduce friction and increase trust in other areas of the insurance value chain.

How it works:

  • Blockchain, an immutable, security rich and transparent shared digital ledger provides a single view of truth across all participants while simultaneously providing selective visibility to participants based on their credentials.
  • It provides the ability to record and track events and associated payments in each country related to the insurance policy.
  • No one party can modify, delete or even append any record without the consensus from others on the network.
  • This level of transparency helps reduce fraud and errors, as well as the need for the parties to contact each other to view policy and payment data and the status of policies. 

Emily Jenner, Head of Insurable Operational Risk at Standard Chartered, said: “As a global bank we have to ensure consistent, trustworthy and secure financial transactions, be that as part of our business or as customers ourselves. By creating a process by which we can arrange multinational insurance contracts through blockchain we not only have transaction security but contract certainty across multiple business locations.”

The multinational “master policy” is written out of London and for the pilot, three local policies were chosen that cover the US, Kenya and Singapore. These three jurisdictions were chosen because the US is a large and complex market, Singapore is a growth market for Standard Chartered, and Kenya has a specific regulatory requirement, known as “cash before cover” which means that cover must be paid for before it is valid.

“We chose these three territories because of their importance to Standard Chartered and also because of their regulatory complexity, so that we could fully test how blockchain technology might make these contracts work more efficiently,” said Standard Chartered’s Jenner.

You can learn more about IBM Blockchain solutions here.

Written by turbotodd

June 15, 2017 at 12:33 pm

Posted in 2017, blockchain, ibm, insurance

IBM Business Analytics: Preventing Fraud, Predicting Profits

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Scott Laningham and I are starting to think about repacking our suitcases and preparing to head back out on the road, this time across the pond to Madrid for the IBM Smarter Commerce Global Summit May 22-24.

In Madrid, we expect to hear quite a bit about IBM’s investment in the analytics space, but that doesn’t mean we have to wait to visit the Prado to relate some interesting details about business analytics.

Specifically, predictive analytics that can help companies across the span of industries to prevent fraud.

Here’s a sound byte you may not have yet heard: Did you know that insurance fraud has reached an estimated $80 billion per year in the U.S. alone??

And in South Africa, the rate of short-term insurance fraud is about 15 percent of all premium costs.

And yet, we’ve also found that organizations that effectively apply predictive analytics are 2.2 times more likely to outperform their peers.

One such client of IBM is Santam, South Africa’s leading short term insurance company, which has saved $2.4 million on fraudulent claims in the first four months of using IBM business analytics software.

This new analytics solution has not only enhanced Santam’s fraud detection capabilities, however — it has also enabled faster payouts for legitimate claims.

In partnering with IBM, Santam’s claims division developed a new operating model for processing claims, depending on varying risk levels. IBM’s predictive analytics software has enabled Santam to automatically assess if there is any fraud risk associated with incoming claims and allows the insurer to distribute claims to the appropriate processing channel for immediate settlement or further investigation, which in turn optimizes Santam’s operational efficiency.

In turn, Santam is able to reduce the number of claims that need to be assessed by mobile operatives visiting the customer or claim site, resulting in further considerable cost savings for the company.

IBM: Investing In Analytics, Predicting Results

In the last five years, IBM has invested more than $14 billion in acquisitions. With investments in SPSS, Clarity, OpenPages, i2 and Algorithmics, and others, IBM is building business analytics solutions providing clients with capabilities for managing fraud, risk and threat. In addition, IBM has assembled almost 9,000 dedicated analytics consultants with industry expertise, and created a network of eight global analytics solution centers.

The Santam project also illustrates IBM’s leadership in analytics in Africa. IBM is also actively laying the foundations for a major presence throughout the African continent, with offices in more than 20 African countries, where the company is assisting businesses and governments in building strategies, expertise, solutions, frameworks and operating procedures to help improve performance.

You can learn more about Santam here, and their new predictive analytics solution in the video below.  You can learn more about IBM business analytics solutions here.

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