Much remains to be done to bolster awareness, availability and take-up of p&c insurance on a global scale, but there are encouraging signs in play that may be further advanced by use of technology, Moses Ojeisekhoba, chief executive officer, reinsurance for Swiss Re, suggested Tuesday.
“We’re still a long way from actually getting to the point where, on a global scale, people are far more aware of what things are and they look at insurance in the way that, in their eyes, makes sense,” Ojeisekhoba told reporters following Swiss Re Canada’s 32nd Annual Canadian Outlook Breakfast in downtown Toronto.
“To me, that’s the most important thing that has to change,” he emphasized. That said, “encouragingly, in my own mind, I think there are some things already in play that allow for availability to be greater and that relates to use-based products.”
People seem to be embracing the concept of accessing protection for a certain period of time “as opposed to saying you buy a product for a full year,” Ojeisekhoba said.
These developments may relate to, for example, a sharing economy approach or to parametric-related products, he pointed out.
Moses Ojeisekhoba, CEO of Reinsurance for Swiss Re
The latter offers clean triggers. “We go with simple products. We pay at a certain period of time if certain things hit. It allows for the ability and the structure of the product to change completely, which then improves affordability as well,” Ojeisekhoba (pictured left) explained.
With regard to a shared economy, he said, this “generally allows you to deconstruct the product itself and move it into units that are a bit smaller.”
This then allows for “designing the products a little bit differently and embedding the cost of certain insurance products in all the mechanisms,” Ojeisekhoba said.
“So there’s a series of things that are being done to try and help with reducing costs of distribution, which then allows you to translate that reduction in cost of distribution into the reduction of price itself,” he said.
Micro insurance is not particularly popular here in Canada, said Veronica Scotti, president and CEO of Swiss Re Canada.
It started in some of the poorest countries, which have simpler insurance ecosystems and distribution, and was designed to provide protection at an extremely low cost, Scotti explained.
The idea was not to start from an insurance standpoint, but rather “from the very fundamental need and work with the ecosystem that exists,” she told reporters.
Veronica Scotti, President and CEO of Swiss Re Canada
But there is there is no reason the micro insurance “approach cannot be replicated even in more developed markets and lead us to more simple products,” Scotti (pictured left) argued, suggesting that that might make for “a worthy experiment.”
A current stumbling block to making this work is that everything is very manual, she reported. “It’s done on paper, you have to brief your sales force, there are these market cycles of six months to a year,” she pointed out.
“So you plan your product a year to two years in advance before it hits the market and then you cross your fingers that someone is going to buy it,” Scotti said.
Being bundled together, “by the time you get through the machine, a lot of costs have been added up,” she added.
Scotti, though, points to how technology may be used to advance and develop things.
“If you use technology as a backbone to your organization and you embed it in all the key processes, I can’t imagine why you couldn’t be delivering policies, for instance, that are on-demand, where the policyholder can say I only want to get that type of coverage,” she told reporters.
“You can assemble a package of solutions that are really bespoke to your needs for a period that is bespoke to your needs,” she suggested.
Her view is that “the cost does goes down. Most importantly, the flexibility is enhanced. So it’s not just about is it affordable, but is it doing something for me that I actually value?”
Getting to the point where insurance “makes sense” for more people on a global scale means enhancing “awareness from the standpoint of you have to be able to look and say, ‘This applies to me,’” Ojeisekhoba suggested.
“There, to me, I think technology plays a big role,” he pointed out.
For example, looking at his home continent of Africa, “and the expansion of insurance and the expansion of banking using smartphones in that platform as a way to distribute and drive product price down, that’s very, very encouraging in my own mind on a global scale.”