Every week, Cowbell’s Director of Agency Marketing, Alexis Vaughn, invites the most interesting and knowledgeable experts in insurance and technology to talk about the latest happenings in the industry. In this week’s episode, Jeffery Williams, Senior Analyst at Forrester, discusses new trends and forecasts for the industry.
Jeffery is a 14 year veteran of the insurance industry. He currently works at Forrester, a respected research firm in the industry, where he focuses on Digitization.
“To me, digitizing a business means digitizing the customer experience,” Jeffery explains. He understands that customers don’t accept antiquated processes and cumbersome paperwork anymore. Instead, they expect better service and products from their insurance providers. “There is so much that needs to happen in the insurance industry. Companies like Cowbell help to usher in a new way to think about pricing and bundling insurance products.”
An important accelerator of digitization has been COVID. “During the pandemic, insurers have grown more appreciative of the relationship they have with their customers.” As a consequence, they want to use technology to further help strengthen the customer experience.
So, how can insurers accommodate this? According to Jeffery, the solution is a new concept, called “connected insurance”. “The way I see it, connected insurance is the future of insurance.”
Connected insurance is a new term in the industry. It entails personalized insurance solutions and products that fit policyholders’ unique needs, using Data Science and AI. Connected insurance can eliminate issues like ambiguous pricing, and instead align insurance pricing directly to the underlying risk, all in real-time.
But, many insurance companies struggle to deploy connected insurance due to a lack of knowledge in Data Science.
“There is an almost unlimited amount of data online, shedding light on all aspects of the world, and certainly businesses. But, we need Big Data, Artificial Intelligence, and Analytics to access and interpret it.”
“Companies like Cowbell help to usher in a new way to think about pricing and bundling insurance products.”
Cowbell was one of the first to take the step towards connected insurance. Jeffery noticed that.
“I first got interested in Cowbell Cyber after hearing about its fundings”, he explains. What further piqued his interest was Cowbell’s use of cutting-edge technology to realize the concept that he calls connected insurance (for Cowbell, connected insurance is part of our closed-loop approach to risk management). “I love how Cowbell is bundling the risk assessment with the actual insurance bundling.”
Cowbell and Forrester alike believe that the use of AI and Data Science is the only way to keep up with the ever-evolving trends of cyber risk. The consequence of neglecting data is a disconnect between cyber risk and cyber insurance eligibility and premiums.
The consequences of this can be grave. Cybercrime has skyrocketed since the pandemic and most small and medium-sized companies in the US still lack basic cybersecurity hygiene. This is a dangerous combination, both for policyholders, and insurance providers.
“Policyholders need more protection, especially now that working from home is the new normal,” Jeffery states. “And insurance providers need to remain profitable. One of Forrester’s predictions is that in 2022, one of the major cyber writers is going to exit the business due to a major loss event”. If insurance companies don’t start to use real-time data to base their underwriting on, they are at risk of a severely unbalanced book of business.
So, what comes next?
According to Forrester, there is no sign of stopping for insurtech. “Funding through the first three Quarters of 2021 has already equaled what we saw in 2020 and 2019 combined.”
If you are interested in learning more about Jeffery’s research, you can search for his name on Forrester.com.