Digital Disruption in the Australian Insurance Industry

There are two reasons for this, he says. The biggest reason is fear. The second reason is lack of direction. Say you’re a truck driver facing automation, without a clear career alternative. What should you do? 

Neumann’s attitude is a realistic one: “You will have winners and you will have losers in the game.” Some of us will simply have to adapt, to do things we aren’t necessarily qualified for yet. “People have to do something else.”

There are countless examples throughout history of when jobs were replaced by new technologies, he says, for instance horse-drawn carriage drivers suffering displacement as automobiles became more mainstream.  

At the same time, it’s not the sudden revolution the media likes to suggest.

“We tend to overestimate the short-term impact and underestimate the long-term impact of new technologies,” Neumann says. “We say, ‘Okay, I’m panicking because digital disruption will disrupt the whole business, but that doesn’t usually happen.”

It’s more of a gradual process with fundamental and lasting change. 

For insurance industry leaders and HR managers, Neumann says training your team to be open-minded is paramount.

“How open is your organisation in terms of change, mindset, culture? Is your workforce able to adapt? Are your leaders good ambassadors? What’s my long-term plan? Is the strategy and management plan future-based? Is it possible to earn money from this in the future?”

HR must lead this transformation. “What skills are needed to recruit the right people and to educate people with soft and hard skills?” It may not be easy, but Neumann emphasises that all of the above questions are connected, which means that targeting all of them will create a more positive impact in the long run.   

Looking at the trends among more than 500 insurance companies in Germany, Neumann sees a major shift toward the customer. “What I see here is that [companies] understand that digital disruption is needed because the customer requests it. There’s a push from the outside, so companies will wake up soon.”

The role of insurance companies will change. In Germany, only six percent of companies have gone completely digital, but it will soon be the case that few customers will want to go to a physical location. 

“Now you take a video, a photo of the damage, send it to an address with your customer ID number, and no one has to come. They transfer you money and you can do it all from your smartphone.” 

It’s these kinds of services that company leaders should focus on developing. That is, services focused around customer needs. They’re services that require strong soft skills, allowing employees to understand the needs and processes between customers and insurance companies. The role of the mediator, he says, is a growing field in insurance market. 

David Wisemantel, Recruitment Specialist in InsurTech 

Sydney, Australia

Next, we spoke with David Wisemantel, who specialises in disruption in recruitment.

“Personal Insurance is seeing advances in digital for two reasons. Tech providers have built advanced claims platforms, making insurers a lot more efficient in processing claims. This includes a lot of automation. Second, insurers now have the ability to better assess the risk of policy holders through big data and the appetite for the market to make PI policies customisable to the policy holder’s situation. (Think health testing, genetic mapping for health/life insurance etc.). Also, blockchain technology is playing its part in reducing fraudulent claims. I think GI will see more disruption. Driverless cars and similar technology will reduce the need for people to insure property like they have in the past.

Naturally, roles like claims support will be less relevant. I think front end sales types roles will also decrease significantly. There is huge demand for technical roles now, like developers. Most of these companies build in a .NET or Java back-end tech stack. Re-skilling in this area is a pretty big leap for someone coming from claims support but that’s where the demand is coming from.  To recruit for in-demand areas (depending on the size of the company), companies need to become more competitive as employers. Talent drivers in this space include salary, work from home, employee share schemes, culture, career advancement, etc. There are a lot of companies who ‘claim’ to do this. You actually ‘have’ to do this, though.”

Andy Jamieson, Founder & CEO of Advisr 

Sydney, Australia

Andy Jamieson, CEO of Advisr, which focuses on the Australian insurance marketplace, shared the following insights about disruption. 

“Firstly, I see that technology is more empowering and enabling for brokers and customers. Second, brokers will need to continue to evolve from distribution only to strong personal advice—that is one real area brokers can deliver value and win customers.

Brokers need to move beyond product understanding and distributing insurance and to more business-client-centric and reviewing and understanding risk. Insurance is a key part of the process, but I feel it needs to be more. Maybe process changes and improvements that reduce risk and reduce insurance premiums.”

Skye Theodoru, Co-founder & CEO at UpCover

Sydney, Australia 

Skye Theodoru, entrepreneur and project manager, advises the following:

“Encourage employees to upskill in emerging trends, business models, and technologies. This could be done by supporting employees and encouraging new projects, in addition to their existing work, or when they start a side hustle if it’s paid or unpaid, by even allowing them to cut back to part-time. I was always encouraged to work in this manner in my corporate roles, and it’s made adapting to starting my own insurtech full-time that much easier. The jobs of the future will be so varied anyway, it makes sense to start now. Manual or process intensive tasks over time will be streamlined, and are already. It means the workforce can now focus on relationships and creative and strategic thinking.”

Rita Yates, CEO at InsurTech Australia

Sydney, Australia

Rita Yates, who has worked for Allianz and Stone & Chalk and now helps insurtech startups grow, recommends broadening your perspective by gaining experience from outside the insurance industry: 

“Insurance professionals of the future will likely need to have broader expertise, lateral thinking and skills which will often include tech skills rather than deep knowledge and expertise in one specific area of insurance alone. To create a culture of innovation, insurers will need to hire talent that understands how to work in a test-and-learn environment and be open to change. Having broader experience outside of the insurance industry alone will also potentially bring fresh ideas and perspectives into the business.”

Jennifer Harrison, FinTech Consultant

Sydney, Australia

Jennifer Harrison, an advisor with experience in fintech, insurtech, and edtech, says company culture is key:

“A lot of the time, employees are in ‘eyes down’ mode delivering against tasks. Whilst this gets today’s work done, it is not conducive to discovering longer-term challenges. Innovation shouldn’t be outsourced to an offsite corporate lab divorced from the day-to-day business. My recommendation is to ensure that every employee periodically participates in a facilitated group session where the focus is ‘eyes up.’ Your employees know your business and your customers the best. When they are supported to be creative and curious, and to imagine the possibilities of the future, you will discover many amazing insights that were hiding in plain sight just waiting to be seen.

You should involve everyone in your digital transformation through facilitated workshops (e.g. along Design Thinking principles). In this way you are upskilling because everyone learns to be ‘eyes up’ at least from time to time.”

Nigel Walsh, Partner at Deloitte & Co-Host at InsurTech Insider

London, United Kingdom

Representing the UK market, Nigel Walsh share the following insights:

“I think like every industry we are going through massive change, probably more so here than any other given you could argue we are further behind the curve. People often perceive our industry to be slow and out of date. But that’s just not true. Insurance isn’t sitting back on its laurels. As my InsurTech Insider co-host Sarah said, ‘We have drones and self-driving cars… find me someone else who can top that.’ 

Globally, InsurTech has had over 30bn of investment with over 4,000 startups worldwide. Close to home, the InsurTech Australia scene is thriving with folks like CoverGenius just nailing it along with incumbents partnering or creating their own thing, for example with Trov or indeed Poncho as set up by the great team from IAG Phil Wilson-Brown and Marcus Verrall. The future is very bright in insurance and it’s not too far you have to scratch to find it.”