Collaboration will be key to the digital transformation of insurance in 2023

With global leaders in Davos for the World Economic Forum's (WEF) Annual Meeting, we can expect a lively exchange of ideas about our future readiness in an interconnected world. Of course, we will also undoubtedly continue to grapple with the current challenges such as energy shortage, inflation and the Ukraine war for the foreseeable future. So, while we discuss new ideas, we also must be prepared for all eventualities imaginable. It's like carrying a spare tyre with your car. It's great to have, but always best when you don't have to use it. 

But it is precisely this interconnectedness of ideas and actions that fascinates me as a Group Digital & Technology Officer because, by its very nature, digitalisation it is not limited to one entity or organisation and is not bound to the implementation of any particular new technology or process. Instead, it provides a constantly changing and constructive challenge to the way we think about the interplay between different actors, how we work, the ways in which we define success, and, for the insurance industry in particular, the huge potential offered by greater engagement with ecosystem partners from other sectors.

Where do I see that potential? To be successful, ecosystem partnerships must enable seamless digital customer journeys. This requires a cross-border, end-to-end view. And, with ecosystem partnerships evolving significantly over the past year in our industry, increasingly they provide the bedrock for embedded insurance, one of the most exciting ideas of recent times. And it is easy to see why. By using digital technology and data in new ways to create better underwriting models we can improve customer experiences, marketing effectiveness, risk selection, pricing and unit economics. 

Such seamless collaboration is a prerequisite to ensure the level of agility the insurance industry needs to adapt to rapidly changing environments and dynamic customer behaviour. In short, now is the time for "co-opetition," where partners compete and collaborate simultaneously. 

This also requires rethinking how we view customers. In an ecosystem, customers never "belong" to a single organisation, but rather to the entire network. And by leveraging such ecosystems, insurers can compensate for a lack of direct customer touchpoints and gain data to understand and address needs most efficiently and effectively. Non-insurance partners, in turn, can enhance their offerings by incorporating insurance coverage in a way that boosts loyalty and deepens their relationship with their customers. A recent example is the Rapport Sales Platform from iptiQ, which offers a new value proposition made possible by collaboration between Swiss Re's digital B2B2C insurer. It is a highly customised machine learning tool that looks at the customer basis of ecosystems partners to identify the right offer at the right time.

If we think even bolder, digitalisation and collaborative business models are also enabling the current paradigm shift in insurance offerings with a stronger focus on risk prevention and mitigation services, instead of traditional pay-outs after an event has occurred. How? First, such models are far better able to capture, analyse and understand the risks customers face, helping mitigate them. Second, with real-time insights and end-to-end visibility, insurers can advise and guide customers, while also incentivising more risk-averse behaviour. 

However, it is important that such data-driven and AI-enabled insurance solutions are covered by agreed industry best practices to guide the responsible and ethical use of data for the benefit of end customers and society. And at Swiss Re, we believe such technology will only reach its true potential if we gain the trust of customers, regulators and other stakeholders.

For all the excitement about what's possible with digitalisation, let's not forget that progress depends on talented people who dare to leave well-trodden paths, challenge traditional approaches and who try again after failure. 

It will take very connected minds to realise the potential of digital technologies – with their inherent cyber risks, and ethical implications – for the benefit of society. Given the uncertainty facing the industry at the start of another year, it helps when there is also one constant: At Swiss Re, the answer to the question "Why have we hitched our fortunes to driving the digital transformation forward?" remains simple: To make the world more resilient.  

So, let's keep our focus squarely on this purpose this year as we prepare for all possible scenarios – and then hope we have the good fortune of being able to keep the spare tyre in the boot.