An Ideas Incubator Is Helping Insurers to Transform
When it comes to digitalization and transforming their business for the internet age, the insurance industry is “lagging a bit,” says Dennis Barnes. He heads RGAX, the innovation incubator of Reinsurance Group of America, one of the largest global reinsurance firms.
Speaking recently with Knowledge@Wharton, Barnes detailed the industry’s progress toward changing the way insurers are transforming themselves to meet the rapidly changing needs of customers and to better compete with the digital-only “insurtechs.” In fact, Barnes said, traditional insurance companies are collaborating with these startups.
Last year, $4 billion was invested in insuretechs, an amount that continues to grow. Yet, said, Barnes, much of that was in partnerships with carriers. “Partnerships are really becoming the norm,” he said.
Hampering more aggressive innovation is the institutional silos insurance companies have built up over the years. Where the CEO takes a stand, collaboration across functions develops. “It starts with the CEO.”
One effort that already bearing fruit is helping companies leverage the enormous amounts of data they have. “The role we see for us is helping them determine which data is important and how do we, in some cases, anonymize yet still leverage that data,” said Barnes.
As important as managing data to improve business intelligence, the product innovation is the most visible. Among the developments Barnes discussed are chatbots and virtual digital assistants that prompt agents with the right questions to ask consumers, making the process more efficient.
A product RGAX developed with a partner is a short-term disability policy for gig workers. Now, a carrier is scaling up to offer it.
In an area Barnes described as “very experimental,” RGAX is working with carriers that provide long-term care insurance and some health and wellness-related organizations to see how to enable eldercare inside the home.
“We’re working with Internet of Things companies, to find out, how do we leverage connected devices in the home so that, as the adult caregiver, I might know if mom left the oven on or the back door open, [so she can maintain her] independence and give me the comfort to keep her in the home?”