Inspecting Risks Set To Improve Returns, As System Goes Digital
One day, people will not believe we used to insure risks without inspecting them first. That is the view of Virtual i Technologies.
The company has launched an insurtech platform to allow the insurance industry to make dynamic decisions based on real data. It provides 100% visible risk data in real time with the AI-backed risk selection platform [VRS]™ Virtual Risk Space, accessible to all kinds and sizes of businesses.
Here we talk with Virtual i Technologies’ representative in Africa, Nicholas Agama, about the challenges and opportunities.
Q: Risk assessment is clearly at the core of the insurance business model. Could you tell us more about why in your view risk improvement is now more relevant than ever?
Today, the insurance market operates as it did 150 years ago. Globally, no more than about 5% of the risks are assessed, whereas the rest are simply priced based on historical data and data provided by customers.
Imagine investing in a stock or in a company without data, without insights. Currently, around 95% of commercial and home property insurance policies are priced while not actually being seen. The high costs and turnaround time for real insight is prohibitive. The result is that insurers are sort of ‘blind’ towards their property risk quality, until a loss event occurs.
This does not have to be the case anymore. Digital solutions aim to make risks visible, to increase the sustainability and resilience of the insurance carrier. The inspection of each and every risk will become standard.
Q: How does this change the way of doing business in insurance?
Insurance companies can now identify bad risks and avoid taking on risk or provide policyholders with ways to reduce the risk through the solution. The reduced cost of inspections, the real-time data and the automatic risk scoring make it possible to inspect every risk.
Risk assessment reports can also be used for onsite assessments, offering standardisation, automation, and minimisation of delivery time. The service is offered globally and is readily available for African insurers. In less than a week, every customer is able to already experience what the company considers to be its success measures: 100% visibility of the inspected risks, available in real time, 40% improvement in workload efficiency, 100% customer satisfaction.
Q: It seems there are specific tech trends that are pivotal
The main trends are digitalisation and everyday use of data analytics. The imperative necessity in the very near future is the use of data in the insurance industry – in particular in the P&C area. Our solution is easy to adapt without any need to install any software on your IT network, and the platform setup requirements are simple. It is an API-based software architecture, meaning it can integrate easily with existing platforms. It is hosted on GDPR-compliant servers, therefore there are no minimal regulatory activities necessary.
It is server-agnostic, meaning it can be hosted on any cloud or fixed server, according to your requirements. Google cybersecurity and data backup provisions are best in class. The existing capabilities, powered by AI and machine learning, are patented. Infrequent users can access all functionality in-browser, without the need to download the app. If you want white-labelling or your own questionnaire templates, we can complete this in less than five days.
Q: How do you see the needs and the solutions for insurers in the Africa region?
We had the good fortune to recently sit down and discuss the needs of the property and casualty insurance sector with a number of leaders in the African insurance community at a roundtable event, and their insights were illuminating.
For example, Mikir Shah, CEO at Africa Specialty Risks, sees a pain point in the lack of data on small to medium-sized properties on multi-location placements, with the submissions often lacking even a precise location for the property.
Bruno Nalletamby, at Swan for Life in Mauritius, sees the need to leverage better and more structured property data, to allow African insurers and reinsurers to retain more risk, rather than transferring it out of the continent.
Lawrence Nazare, CEO at Continental Re, was able to give us a perspective from decades in the industry and, interestingly, he saw that insurers had lost the discipline of inspecting risks adequately and that digital technologies could be the catalyst for returning to an acceptable level of insight for property risks.
And Rose Wanda, the general secretary of the Organisation of Eastern and Southern African Insurers, drew our attention to a parallel sector, mobile banking, which McKinsey has also raised and used as a case study for where dramatically increased market penetration can really happen through the vehicle of a digital disruptor.
Q: So, what is the company’s vision when it comes to risk assessment in Africa?
Each risk location will be inspected either by human eye or computer eye/algorithm. As a mission, we are answering the call of the African insurance community. So, insurers will become more aware of their ways of risk calculation than they do today, so they would increase the visibility of risks from 5% to 100%. In fact, they could actually accomplish this in just one year if they would use such a solution. Not only large corporations but small and medium-sized companies as well. It’s easy to use, the processes are easy to adopt and, last but not least, it’s affordable. It could actually benefit the whole insurance ecosystem.
