Technology Driven Change and Next Generation Insurance Value Chains (TECHNGI)

Lead Research Organisation: Loughborough University
Department Name: Business and Economics

Abstract

Financial and insurance services contribute more than 7% of UK national income and over one million jobs, with around one third of this employment in insurance. London is the leading global centre for specialist commercial (re)insurance broking and underwriting, with a wide range of specialised skills that supported the writing of £60 billion of gross written premium in 2013. Exports of insurance and pension services were £17.6bn in 2016, some 7% of total services exports.

Our project investigates the opportunities and challenges for the UK insurance industry arising from the application of the new Ai technologies, including machine learning, distributed ledger, automated processing and the explosion of available data for business analytics and modelling including from social media and the connections emerging to the 'internet of things'.

We will explore the implications for the insurance industry of this wave of new digital technologies, with the support of many of the UK's leading insurance companies. We will identify and map the range of opportunities for AI based innovation in business processes and business models, across underwriting and risk analytics, claims processing and customer engagement. We will examine, through engagement with industry on business opportunities and challenges and through a range of case studies, the barriers to adoption and the enablers of change.

We will examine these barriers and enablers both from organisational and industry wide perspectives. At the organisational level we will examine the requirements for successful innovation ("critical success factors") and develop organisation wide assessments of their readiness for adoption. At the industry level we will examine new emerging ways of providing insurance services, including the possibilities for transformative change in insurance value chains, for example with separation of risk and underwriting from customer engagement, and the potential for sharing of services and data.
Finally from these organisational and industry investigations we will develop strategic and policy analysis and recommendations, identifying the steps required from firms and from policy makers to support the adoption of AI technologies and ensure that these support automation and efficiency gains in UK insurance industry and benefit insurance customers.

A distinctive feature of our project is our deep industry engagement, offering us the opportunity to engage with practitioners across the full range of business functions: in strategic roles; in specific business areas across product lines and operational processes; in risk analytics; and in technology. These contacts will support a range of case studies of the deployment of AI in insurance and also interview, survey and forum style empirical investigations to achieve the full understanding from both these organisational and industry perspectives.

Planned Impact

WHO MIGHT BENEFIT FROM THIS RESEARCH?

Our research is designed for several different user groups:
(a) Staff working across the insurance value chain. Successful technology based business innovation involves changes in both business process and business models and hence (Stephenson 2018 ch 7) requires a combination of expertise: technological (AI and data science), business (responsible for engagement with customers and suppliers) and analytical (e.g. underwriting and risk pricing). Our research - the Delphi interviews in Phase A, the case studies in Phase B, the frameworks and solutions in Phase C - will directly support these staff by providing relevant knowledge and understanding.
(b) Techinsur startups or in new competing technology based challengers, e.g. major internet platforms, who need understanding the insurance value chain and the potential for AI and data technologies. They will particularly benefit from our Phase A mapping and our detailed Phase B case studies.
(c) Senior management in the industry need to shape an appropriate strategic response to this new emerging landscape. Our integrative workpackages in Phase B (WP4.1, WP4.2, WP5.1, WP5.2) together with our Phase C workpackage 6.3 on implementation frameworks are addressed to their needs.
(d) Regulators, compliance officers and policy makers want to support these technological changes, and where possible use them to better achieve regulatory objectives such as customer protection at less cost to the industry.

HOW MIGHT THEY BENEFIT FROM THIS RESEARCH?

Business line and technology staff in UK insurance can gain insight into the organisational and business challenges arising from the application of AI to their products and business processes. They will be able to learn best practice and the factors for successful innovation from our case studies and research based empirical investigations. Risk analytics staff may also benefit from better understanding the opportunities for data-based improvements in risk modelling and underwriting.

Insuretech entrepreneurs can gain from a better understanding, especially from our case studies, of the business requirements for successful new technologies.

Senior management can also gain strategic insight, in particular into changing business models, into the possibilities for co-operative effort to develop standards and supporting technology and for negotiating the potentially transformative impact of technology on the industry as a whole.

Policy makers and line staff in regulatory bodies can benefit from improved understanding of insurance business models and how they are affected by technological change; on recommendations and opportunities for better alignment of regulations with the new technologies; on developing policies for regulation of new business products and technology supported business models; and from understanding and supporting opportunities for using technology to support regulatory compliance

We offer all of these different user groups practical options for promoting the application of AI and data technologies in the UK insurance industry, in the short to medium term at the level of specific business process and over the longer term by influencing the strategic and policy decisions that shape future business models and support industry transformation.

Our research strategy, based on close engagement with our industry partners and co-production of research, provides assurance that our range of research outputs will be relevant to these targeted user groups and, if we do our job well, have the desired medium and long term impact on the future of the UK insurance industry.
 
Description • We review of application of AI and data technologies in the UK insurance industry and how these can impact on business processes and business model. We find that while substantial change in processes and business models is happening, many applications are relatively limited, for example supporting greater automation and efficiency in existing processes.
• We find a broad consensus amongst leading users that AI is an umbrella term encompassing a variety of technologies with a wide range of potential applications. The term AI is often applied by practitioners even to technologies that do not involve learning. The firms actively employing these technologies have all developed a more nuanced understanding, breaking down the broad category into a number of more precise opportunities.
• UK public policy discussion has been focused on the notion that AI is a nascent industry, like the internet commerce industries that emerged in the 1990s, and the UK needs to ensure that it is abreast of these technologies not to lose ground. We find that support for a contrary view, that these are techniques not technologies and that the principal business challenge is on building and implementing business processes using AI and data technologies, including accessing the required data, not the AI itself which is fairly standard.
• We have investigated the varying ways in which incumbents are engaging both with the technologies and with startups. Engagement with startups is primarily commercially driven, what do they have that can benefit our existing business? The emphasis is on immediate practical application and also, if the engagement is of value, providing them with the skills and resources to help them scale. With regard to technology implementation, there are several factors that must be combined: useable data, operationalising the technology in business context, talent and regulatory compliance - it's never the technology on its own.
Exploitation Route We have found a substantial appetite across the UK insurance industry for independent research based insight into the adoption of artificial intelligence and data technologies. ideally we would see this research being taken forward through creation of a longer term institute or research centre for work on the digital transformation of UK insurance, perhaps industry funded or joint funded by industry and RCUK.
Sectors Digital/Communication/Information Technologies (including Software),Financial Services, and Management Consultancy,Government, Democracy and Justice

URL https://www.techngi.uk/
 
Description Our conference, research outputs and webpages are being used by insurance firms in the relatively early stages of adoptoin of AI and data technologies in the their business, providing them with insight into the experience of adoption across the industry.
First Year Of Impact 2019
Sector Financial Services, and Management Consultancy
Impact Types Economic

 
Description Techngi Industry Partner - BGL Group Limited 
Organisation BGL Group Limited
Country United Kingdom 
Sector Private 
PI Contribution Engagement with industry to determine implications of AI within Insurance Sector
Collaborator Contribution Insight into application of AI and support of case study. Provision of resources over two year project (staff time and hosting of meetings).
Impact Attendance at quarterly meetings. Meetings with TECHNGI team.
Start Year 2019
 
Description Techngi Industry Partner - IBM UK 
Organisation IBM
Department IBM UK Ltd
Country United Kingdom 
Sector Private 
PI Contribution Engagement with industry to determine implications of AI within Insurance Sector
Collaborator Contribution Insight into application of AI and support of case study. Provision of resources over two year project (staff time and hosting of meetings).
Impact Attendance at quarterly meetings. Bi-lateral meetings with team members. Focus group support.
Start Year 2019
 
Description Techngi Industry Partner - Jaguar Land Rover Automotive PLC 
Organisation Jaguar Land Rover
Country United Kingdom 
Sector Private 
PI Contribution Engagement with industry to determine implications of AI within Insurance Sector
Collaborator Contribution Input from Company ceased due to business demands
Impact Input from Company ceased due to business demands
Start Year 2019
 
Description Techngi Industry Partner - Lloyds, London 
Organisation Lloyds Bank
Country United Kingdom 
Sector Private 
PI Contribution Engagement with industry to determine implications of AI within Insurance Sector
Collaborator Contribution Insight into application of AI and support of case study. Provision of resources over two year project (staff time and hosting of meetings).
Impact Attending quarterly partnership meetings.
Start Year 2019
 
Description Techngi Industry Partner - Pricewaterhouse Coopers LLP 
Organisation Price Waterhouse Cooper
Country United Kingdom 
Sector Private 
PI Contribution Engagement with industry to determine implications of AI within Insurance Sector
Collaborator Contribution Insight into application of AI and support of case study. Provision of resources over two year project (staff time and hosting of meetings).
Impact Attendance at quarterly meetings. Bi-lateral meetings. Case study development.
Start Year 2019
 
Description Techngi Industry Partner - SCOR Global 
Organisation SCOR
Country France 
Sector Private 
PI Contribution Engagement with industry to determine implications of AI within Insurance Sector
Collaborator Contribution Insight into application of AI and support of case study. Provision of resources over two year project (staff time and hosting of meetings).
Impact Quarterly meeting attendance and contact with team member J Hillier
Start Year 2019
 
Description Techngi Partner - Z/Yen 
Organisation Z/Yen Group Limited
Country United Kingdom 
Sector Private 
PI Contribution Engagement with industry to determine implications of AI within Insurance Sector
Collaborator Contribution Insight into application of AI within insurance industry.
Impact Attendance at quarterly meetings.
Start Year 2019
 
Description Techngi industry partner - Willis Towers Watson 
Organisation Willis Group
Department Willis Research Network
Country United Kingdom 
Sector Private 
PI Contribution Research team has fully engaged with Partner and work collaboratively to ensure specific tasks are completed. Team engage with Partner to determine objectives and outputs.
Collaborator Contribution Partner has made significant contributions to supporting research project. Provision of venue in London office to hold TECHNGI conference, provision of staff time to organise event, provision of videographer, provision of refreshments at event at reduced cost. Advertising and associated PR of event to Willis network. Commitment of role as Partner to group.
Impact Huge attendance at the Techngi conference hosted by Willis. Total of 300+ attendees from industry. Prompted many more to make contact with group.
Start Year 2019
 
Description A Milne - FinTech 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact A Milne - initial engagement with FinTech
Year(s) Of Engagement Activity 2019
 
Description A Milne Meeting with RegTech Council FCA & PRA 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact A Milne attends meeting to ascertain views of industry.
Year(s) Of Engagement Activity 2019
 
Description A Milne co-hosting round table at Global Insuretech CXO forum 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact 2. Alistair Milne co-hosting a roundtable at the Global Insuretech CXO Forum, sponsored by EXL. https://fintech.global/globalinsurtechsummit/agenda/ Audience 20. Date 4th March 2020
Year(s) Of Engagement Activity 2020
URL https://fintech.global/globalinsurtechsummit/agenda/
 
Description A Milne meeting with EXL Services to discuss adoption of AI in insurance (19/02/2020) 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact 1. Alistair Milne with EXL services, a leading technology consultancy specialising in insurance and health care. Discussed adoption of AI in insurance.
Year(s) Of Engagement Activity 2020
 
Description A Milne meeting with Willis Towers Watson staff to discuss Digital Technology and RegTech in insurance industry (20/03/2020) 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact 3. Alistair Milne , conference call with 4 staff member of Willis Towers Watson to discuss Digital Technology and RegTech in the insurance industry Date March 20th, 2020
Year(s) Of Engagement Activity 2020
 
Description Article published in 'The Conversation' - A Zarifis 31/01/2020 
Form Of Engagement Activity A magazine, newsletter or online publication
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Media (as a channel to the public)
Results and Impact Article within business sector highlighting impact on AI and insurance for Tesla drivers.
Year(s) Of Engagement Activity 2020
URL https://theconversation.com/why-is-tesla-selling-insurance-and-what-does-it-mean-for-drivers-130910
 
Description C Holland - Article published in Willis Towers Watson Newsletter (Nov 2019) 
Form Of Engagement Activity A magazine, newsletter or online publication
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact Article by C Holland
Year(s) Of Engagement Activity 2019
URL https://www.willistowerswatson.com/en-GB/Insights/2019/11/artificial-intelligence-ai-and-emerging-bu...
 
Description C Holland - InsureTech matchmaking event hosted by AI for Services (30/01/2020) 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact C Holland presented on Panel and discussed ideas with six Insurance start ups at event hosted by AI for Services.
Year(s) Of Engagement Activity 2020
 
Description C Holland attends UK Westminster Forum, London 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact C Holland attends discussion 'Competition in the Digital Economy', UK Westminster Forum, London (10/09/2019)
Year(s) Of Engagement Activity 2019
 
Description C Holland meeting with BGL Group 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact C Holland meets with BGL to provide briefing on AI. Productive discussion to clarify current AI assumptions.
Year(s) Of Engagement Activity 2019
 
Description C Holland meeting with Dr J Taylor, Pricewaterhouse Coopers 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact C Holland meets J Taylor to plan position paper on development of AI in Insurance.
Year(s) Of Engagement Activity 2019
 
Description Conference on artificial intelligence with Willis Towers Watson 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact great day, lots of interest
Year(s) Of Engagement Activity 2019
 
Description EIOPA Conference, Frankfurt 08/10/2019 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact C Holland attends EIOPA Conference. Prompts debate and gauges common issues within industry sector.
Year(s) Of Engagement Activity 2019
 
Description IBM Focus Workshop 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact Workshop to gauge industry needs.
Year(s) Of Engagement Activity 2019
 
Description InsTech Conference - Emerging platforms and eco systems, London 22/10/2019 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact Attendance to gain insight into core topics for Phase A.
Year(s) Of Engagement Activity 2019
 
Description Insurtech Europe Conference, London 14/10/2019 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact Presentation to industry by MVM and TR
Year(s) Of Engagement Activity 2019
 
Description Interview with Alistair Milne on Willis Towers Watson Research Network website 
Form Of Engagement Activity A broadcast e.g. TV/radio/film/podcast (other than news/press)
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact Spotlight on Alistair Milne - interview by Willis Towers Watson, London
Year(s) Of Engagement Activity 2019
URL https://www.willistowerswatson.com/en-GB/Insights/2019/12/willis-research-network-spotlight-series-a...
 
Description Lloyds London - Workshop 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact Initial debate and questions to determine Phase A
Year(s) Of Engagement Activity 2019
 
Description Lloyds workshop (24/04/2019) 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact TECHNGI group attend Lloyds workshop to exchange ideas and debate initial research issues.
Year(s) Of Engagement Activity 2019
 
Description M Van-Meeteren and J Hillier meting with Broughtbymany 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact Group memebers meet with Broughtbymany as interview for case study
Year(s) Of Engagement Activity 2019
 
Description Meeting with FCA - Financial Conduct Authority 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact Initial meeting to discuss remit of research and gauge opinion
Year(s) Of Engagement Activity 2019
 
Description Meeting with Head of Digital Artificial intelligence, AXA ML 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact Meeting with influential industry contact to gain further insight into industry view.
Year(s) Of Engagement Activity 2019
 
Description T Rubin - meeting with Lloyds Data Lab to discuss incubators case (06/02/2020) 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact T Rubin - useful meeting to plan Insurance specific start ups and incubators with view to Phase B in-depth case study.
Year(s) Of Engagement Activity 2020
 
Description Techngi Industry Partner - ABI 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact ABI join TECHNGI quarterly Partner meetings
Year(s) Of Engagement Activity 2019,2020
 
Description Techngi Quarterly Partner meeting 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact Quarterly partner meeting. Industry Partners include Lloyds Data Lab, Z/Yen Group, ABI, BGL Group Limited, Pricewaterhouse Coopers LLP, SCOR Global, Willis Towers Watson Limited, IBM Global Markets. Discussion of research focus, issues and report of work completed within each Phase.
Year(s) Of Engagement Activity 2019,2020
 
Description Techngi social media accounts 
Form Of Engagement Activity Engagement focused website, blog or social media channel
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact TECHNGI social media accounts set up. These run alongside the TECHNGI website and provide updates on TECHNGI events, publications and blogs.
Year(s) Of Engagement Activity 2019
URL https://twitter.com/techngi?ref_src=twsrc%5Etfw%7Ctwcamp%5Eembeddedtimeline%7Ctwterm%5Eprofile%3Atec...
 
Description Techngi website 
Form Of Engagement Activity Engagement focused website, blog or social media channel
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact TECHNGI website created to inform industry of events, publications and updates regarding research.
Year(s) Of Engagement Activity 2019
URL http://www.techngi.co.uk
 
Description Willis Towers Watson Research Network - Annual Report 2019 
Form Of Engagement Activity A magazine, newsletter or online publication
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact file:///C:/Users/cvjw17.LUNET/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/ONNUJ2GX/WRN-brochure-october-2019%20(002).pdf
Year(s) Of Engagement Activity 2019