Insurance Journal (1st Quarter 2019)

Guest Contribution
collaboration. Successful businesses
need each other and collaborate.
Apple would not become a Trillion
D o l l a r C o m p a n y w i t h o u t
collaborating with Foxconn due to
their manufacturing prowess.
Similarly, Samsung and Huawei
would have never competed with
Apple without collaborating with
Google for their “Android” operating
system. There are numerous examples
where successful or even failed
businesses have collaborated and
become successful.
The same model is adopted by
successful Insurance Industries i.e.
collaborating with technologists to
create successful partnerships giving
them edge where they are provided
with the most updated technologies to
meet their transformation needs.
With so many benefits that the
Insurers could avail with such
collaboration, the question arises as to
what is stopping them from
collaborating with tech partners?
One of the key resistance by Insurers
for not collaborating particularly in
our market is the privacy of their data
or the right insurance terminology
would be Moral Hazard. Some
companies do not want to share data as
they are concerned that the
information provided could also work
against them. For example; a broker
only shares minimum required
information with Insurer and
Underwriter so their potential client is
not approached directly by the Insurer.
Similarly, the Loss Adjuster /
Surveyor is only provided with the
information required to settle the
c l a i m . A n o t h e r m i s p l a c e d
apprehension is that technology will
replace underwriting and claims jobs
which can never be the case. The
judgement of a prudent underwriter
and input of claim manager and
surveyor combined with data and
technology would enhance decision
making securing their job rather
replacing them.
Apart from trust worthiness, another
reason for not collaborating is tight
budgets and slim profit margins. The
Insurers do understand that using new
technologies will make them more
competitive but at a cost which they
are not ready to bear. This is where
they fail to realize that reducing
claims by the use of technology would
result in decreasing their overall
claims cost. No doubt, there are fiscal
constraints to invest in new
technologies but the many indirect
and monetary benefits of investing in
Technology advancements will help
them in recovering cost besides make
them realize that the cost is just a
fraction of benefits attained.
Improvement in processes like claims
tracking, timely information for
decision making and better customer
servicing will help them to be more
valuable to their clients and ultimately
help increase their value to their
clients. Analysing historical data
would also help them in developing
better insurance products.
The Insurance Industries across the
globe has always been collaborating
with local and foreign entities for
several needs such as re-insurances,
fronting, broking, loss adjusting,
surveying etc. The local Insurers have
also been collaborating with all of the
above and, if such is the case, then
what stops them from collaborating
with technology firms.
The Insurance Industry of Pakistan is
now standing at crossroads to choose
between collaboration and isolation.
Personally, I can see two possible
outcomes for either option the
Insurers may choose. They can keep
developing Software Solutions in
isolation as traditionally being done
and compromise on the quality,
functionality and timely deliverance
of insurance technology. Or, they can
choose collaboration and utilize the
most updated, tested platforms for
their insurance functions at least for
the Insurance Surveying function
which had always been quite
problematic. The Software Solution is
currently available and successfully
used by at least one Insurer.
The key to success, however, is the
basic principle of insurance of
“Utmost Good Faith” which could
only be established through
collaborating and detaching from
suspicions of data breaches.
Insurance Surveyors provide with detailed technical reports on underwriters the risks involved
in a request for insurance cover. Their reports outline any aspects which might affect the
Insurance Premium.
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Insurance Surveyors are professionals who assess the loss or damage and serve as a link between
the insurance and the insured. They usually function only in non-life business. Insurance risk
Surveyors carry out Surveys of buildings, machinery, transport and other sites or items that
need to be insured.
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Before forming “Insurance Surveyor Company” the legal requirement must be fully observed
the license of Surveyors are issued by the regulatory authority in case of Pakistan Insurance,
licenses are issued by Security Exchange Commission of Pakistan (SECP).
Insurance Journal January, February, March 2019
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