14 <strong>InView</strong> | An independent eye on insurance GOING THROUGH THE GEARS OF CHANGE Ashton West OBE, Chief Executive, Motor Insurers’ Bureau (MIB) © Copyright. Weightmans <strong>2015</strong>. All rights reserved.
Issue 2 | <strong>Autumn</strong>/<strong>Winter</strong> <strong>2015</strong> 15 Technology is fundamentally reshaping the motor insurance industry. Ashton West OBE, chief executive of the Motor Insurers’ Bureau (MIB), talks candidly about the enormous challenges as well as the major opportunities. How much has technology changed since you joined MIB in 2003? In the last decade there has been extensive change. In terms of technology enabled change I’d split this in to two areas – the customer and the business. Customers’ expectations are very different nowadays due to the nature and extent of technology, such as smartphones and tablets. This means there is a desire and expectation for information, instantly and at all times. Buying behaviours have also changed. People want to be able to buy anytime, anyplace – and they’re doing this more and more through technology. The internet has influenced both customer behaviour and business operations, and we must all understand how Google and other search engines work to maximise our marketing activity. In addition, technology such as the cloud has brought down the whole cost and increased availability of digital storage space. The price of hardware has also dropped or remained static. Businesses additionally need to satisfy multi-channel requirements to reflect the ‘anywhere, anyhow’ expectation of customers. Just as importantly, the increased use and reliance on technology means cyber risks have become increasingly prevalent across the industry and this is a huge issue that we must all address, working with the government and other organisations. From a business perspective what are the main challenges around technology? If I was asked what keeps me awake at night, I’d say firstly, information security; secondly, information security; and thirdly, information security. Without doubt, this is the single most important risk for us to manage. As Gerald Ratner famously learned after he rubbished one of his jewellery firm’s products – it takes years to build a reputation and moments to destroy it. Reputational damage from data loss or a data security breach is potentially huge – particularly if a significant part of your activity is providing data asset management services for the insurance industry. It could be loss of data, corruption of data, or people selling your data if they illegally get access to it. Issues could also stem from software failures, loss of intellectual property, or sensitive commercial information. These risks are inherent whether you’re hosting your own data or someone else is hosting it for you. Just as importantly, the increased use and reliance on technology means cyber risks have become increasingly prevalent across the industry and this is a huge issue that we must all address, working with the government and other organisations. On the flipside, what about cyber opportunities? Every threat creates an opportunity. A topical subject would be autonomous vehicles and the hacking of cars. Vehicles already run on computers to a significant extent and, as we move towards autonomous vehicles, not only will they be run by computers, they’ll be driven by computers – literally. There is significant cyber risk related to that. Just who will be responsible for accidents? Autonomous and semi-autonomous vehicles are a real market disruptor. As we move from semi-autonomous through to autonomous vehicles, the whole profile of insurance changes dramatically. The motor insurance market as we know it will disappear. In its place we will have a very different market where you’re looking at product liability claims. Who’s responsible? Was it the driver? Was it the equipment? Obviously if vehicles are fully autonomous it will always be the equipment. We are some way off that just now, but as we move towards it, we’ll see things changing. Then there’s the issue of hacking into computers. If you can take control of a car, what are the implications in terms of accident risk and injury?
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