Tell us more about what reinsurance is, and how it connects to data?
Reinsurance itself is not [so] much about interacting with policyholders
─ that's what we call individuals like you, Michael, who are typically purchasing insurance,
or with SMEs who are also buying insurance.
We are focusing more on supporting the large and smaller insurance companies on how to
deal with the customers.
So, we give them an understanding about the different risks: how they calculate it and
how they work with it.
When you have very complex facilities, we do something we call "risk engineering."
You go out to these facilities, [and] try to find out: what can go wrong; what the impact
might be.
And this needs tons of experts.
So, if you look into Swiss Re, you'll only find a few guys focusing on bringing insurance,
or reinsurance to our customers, but tons of experts from many, many different areas.
Tons of engineers, physicists, [and] mathematicians who build the brightest models about earthquakes,
weather, [and] people aging.
So, how do you think about bringing this information in, and [about] the nature of the workplace
and how your workplace is evolving to make it easier for this group of data experts to
carry out their job?
When we talk about bringing in data, we are not only the experts in how to work with that
data and on methodologies but also leveraging the latest technologies.
When it gets to mathematical models, for example, or
how you calculate weather conditions, then we have our engineer-physicists who know this
much better than we do.
Let me give you a little example.
When you get a claim after something happens, then classically, you will have somebody typing
this from an email into a system.
From that system, someone would review it, and put some more information into another
system.
However, everything you get, you could extract more or less automatically, and digitize significant
part of the processes.
But, you need to leverage quite a lot the capabilities that are slowly emerging in the
field.
And it is the same as [for] understanding different risks.
There is so much information there and we only use a minuscule portion.
But, the majority of that information is particularly unstructured ─ is unrelated, meaning it
comes from very different sources.
You need to put it into context; understand it.
And no, we do not employ hundreds and thousands of people.
You need to do this in an intelligent way.
And, and that’ s where our focus is.
How do you get your workforce to change the way it works, in order to absorb these new
ways of thinking about data, analyzing data, incorporating data, or making decisions with
data?
And this is a huge challenge you're bringing up here because it's not just about analyzing
data.
If you think [about it], we typically have experts whom we have had with us for years.
So, at Swiss Re, you can find a lot of very experienced intel people.
They are confronted with an industry that is suddenly changing because it’ s getting
more products in there ─ for example, new cyber defense products.
Then, they get a work environment that changes.
Ten years ago, they never used any sort of iPads to go to customers, write in notes,
chat and interact in high frequency with their customer [when] developing a contract.
Then, you suddenly have new models of transparency, and understanding of how risks are developing
and where it’ s going.
And then you have all these new possibilities with data.
So, all of these things suddenly come together.
And we heavily struggled with [on-boarding] all of our workforces onto the journey by
adapting different capabilities offered.
And, the solution and path we are taking at the moment, is to provide different possibilities
and opportunities to them and let them choose, to some extent.
[We] tried sometimes to impose a certain way of working.
We failed pretty miserably.
We also have a big mantra, which is, "Own the way you work."
So, people can work at home, while traveling, and with that, have a much more attractive
work environment for them.
At least, we have had some pretty good feedback on how we are exposing these capabilities
to our employees now.
So in this case, when you talk about the digital workplace or the future of work, it mainly
comes down to convincing these experts to adopt new ways of working that enable them
to take advantage of the data - the unstructured data - especially that which you're able to
supply through various types of data feeds and analytic tools.
Yes, that’ s one part of it...
You can also see this classical adoption problem with the latest technologies when you... and
let me perhaps switch to another industry ─ if you go to lawyers.
Lawyers, especially in their early years, spend tons of time finding the right information
somewhere, preparing it, and distilling insights out of court case decisions.
There is a small portion that is truly high in value-adding: sitting with the customers,
listening to them, understanding where they are, defining a strategy on how to tackle
the legal challenge.
And, that part of thinking, this value-adding, probably remains.
But, the other part that I described initially.
You can substitute more and more [with] technology, leaving you on one side with a problem that
the other people don’ t have the possibility to learn and get into it.
And for the well-established lawyers, let's think like this: You for sure have a lot of
investment into preparing this show.
If you needed to run ten such shows every day and having five minutes to prepare it,
I’ m very sure your life would be pretty stressful.
Yes.
So, this type of change that you're talking about must feed into the ultimate thinking
of the business model, right?
So, maybe speak to us about your thinking [on] the transformation of your business model,
and then this use of technology, and the adoption of the different ways of thinking,
our business model probably evolves much slower than most people would expect when they look
at the other end.
However, it becomes much more transformed through what is around us.
And, “what is around us” means the understanding of the world and how the word is changing.
If you look, for example, at the kind of risks we have today, they are so different than
the risks we had twenty years ago.
this connectivity of the world changes the whole thing.
So we suddenly need to understand that the risk is much broader, much more interconnected.
And, this also asks us to think, "Can we offer insurance, for example, that is more tailored,
more short-term, so that you don't get very long coverage?
Could we also partner more with our primary insurers, and the bigger customers, and also
individual customers so that they prevent things more?”
The digitization shortens the distance from a reinsurance to the ultimate customer significantly.
Suddenly, we have a chance to get in touch with them; get real handy signals from them;
and also shape their behavior ─ influence them.
Because risk management [and] risk reductions is a lot about influencing and assuring that
things do not happen that we don't want to happen.
Can you talk about innovation, which I assume also is the kind of glue that holds these
various pieces together that you’ve been describing?
Innovation, in fact, is one of our core paths in the company.
Innovation, for us, doesn’ t come from tough, stringent, managed research projects.
Innovation comes from the entire company.
We aim at creating a lot of freedom, and we invite people to think about different opportunities.
So, collaboration, open problem-sharing discussions are at the core.
You could even say that certain kinds of edgier working environments, which some tech companies
have are not new to us since we try to foster those kinds of exchanges.
And, when we then look into the individual activities and how they worked, and very often
during a lunch talk, or during a discussion with a primary insurer, we come to the idea
of, “Oh, we could, or should; and try out something.”
And, with our expertise, we are typically able to grow these things.
Can you share your thoughts on some of the next generation of technologies that relate
to insurance, such as mobility, the blockchain, things like that?
For sure, Michael.
First, most technologies will transform the way we look at the world.
Or, in other words, the change of the world itself is the transforming factor for us.
With IoT, we will get more and more insights about how things are working.
With this, we understand risks much better and can influence them much more closely.
Mobility, or what I would call "connectiveness," allows us to stay in touch with whatever is
out there.
Digital payments are especially interesting, from my perspective, in two areas.
One is that when you get more into insurance-as-a-service on-the-go ─ so pay-as-you-drive, pay-as-you-live
─ then you need to have very small payments to capture these respective choices.
So, [through] electronic ways, new digital payments enable that.
The other side, micro-payments ─ small payment possibilities ─ are also the key to opening
up insurance solutions to areas of the world which have very limited access to insurance.
So, if you think about Africa, how can you provide microinsurance to farmers?