’Data analytics in the insurance industry is a game changing moment’ because it enables firms to ’connect information with levels of granularity’, according to Google’s Dr Henna Karna
Google plans to accelerate the insurance sector’s data evolution using analytics, as it strives to combat underinsurance and close the global coverage gap, which stood at $1.2 trillion according to a 2019 report by the Swiss Re Institute.
The tech giant has developed several recent partnerships in the insurance industry, including its collaboration with Brit Insurance in May 2020 to launch Ki – the first fully digital Lloyd’s of London syndicate.
Dr Henna Karna, Google’s global managing director for insurance and reinsurance, told Insurance Times: “Google has a mission that it sticks by, which is ‘making the world’s information more meaningful’ and for insurance, that’s exactly what we are doing. We are working through understanding exposures.
“The bread and butter of insurance has always been data and the bread and butter of Google is data analytics – connecting those two things is really important for us.
“We want to be able to empower these insurance colleagues with tools to create experiences that are much more tailored, personalised and even more relevant to the life of the customer. In doing so, [we can] hopefully [start] to reduce that insurance gap that we have seen growing year-on-year.”
However, the Covid-19 pandemic has polarised consumers on the matter of data sharing. Consumer Intelligence’s July 2020 research cited that more than half of motor and home insurance customers are not comfortable sharing their data with their insurer.
Insurtechs are critical
Speaking about partnerships more broadly, Karna continued: “Insurtechs have become critical.
”The ecosystem in insurance we are looking at from a strategic standpoint will only evolve those partnerships. I always say that ‘what Google does for insurance is led by the insurance industry’ and not the other way around.”
This is because Google understands that the insurance sector is hungry to get closer to its customer, underwrite using dynamic risk models and gain more data connection points.
“That’s why the value of Google becomes more meaningful. Our goal is very much to accelerate the mission of the industry,” she said.
When asked how Google will be working with the UK insurance market, Karna referred back to Google Cloud’s partnership with Brit Insurance and University College London (UCL) to launch Ki in May 2020.
She continued: “That helped bring together data, technology, innovation and intelligence. We started bringing that [approach] to specialty underwriting and corporate specialty underwriting.”
Karna said the launch of Ki was great because it encouraged conversations about what it means to be disruptive within financial services.
“Disruptive in the sense of customer relevancy and the digital experience we are trying to create with Ki. [This] is starting to move that needle towards value recognition for the company,” she explained.
”We have spent a lot of time and effort speaking with brokers. We have connected the ecosystem of brokers, agents, etc to look at trading efficiencies, being more responsive and having a competitive edge.”
Mark Allan, chief executive of Ki, said: ”Working with Google Cloud last year to launch Ki was critical in building such a successful platform.
”We’ve been able to put a real focus on user experience and simplicity, which truly puts the broker first. In contrast to some others in the market, technology is at the heart of Ki – our platform drives broker interaction and our algorithm drives the underwriting.
”With data science and technology so central to our business model, we have looked well beyond the insurance market to attract top talent, hiring software engineers from consumer goods companies and numerous [PhD candidates] with commercial experience in other sectors. This widened talent pool is key to building our market-disrupting platform and algorithms and offers huge growth potential.”
Allan said Ki has “only scratched the surface” of what it can do.
He continued: ”The next step is digital integration with broking platforms, particularly as we now have the application programming interface (API) capability ready.
”This will reduce friction even further, allowing brokers seamless access to Ki’s capacity in their own systems. Ultimately, we expect Ki to allow Lloyd’s to compete for business that doesn’t reach the market today.”
There could be more partnerships ahead, according to Karna. She added that Google Cloud is geared to be partnership heavy and solve complicated problems.
Insurance as a safety blanket
For Karna, data analytics drives her. But as risks are always evolving, for example around cyber and climate change, there is not always a historical data back story for all risks.
She continued: “When we think of insurance, it is a safety blanket.
”In some cases, the risks are low frequency but high severity. Now the question is: what data is relevant?
”The importance of data analytics in the insurance industry is a game changing moment because we can now start to connect information with the levels of granularity that is shifting the way we think.
“It goes back to what insurance does best as an industry – risk management. [This] has become a big data game.
”Insurance needs technology. Google is a data analytics company and insurance is [in] data analytics’ DNA - it is remarkable what we can do together. We are trying to connect information for underwriting purposes and dynamic modelling.”
She referenced Google’s API management platform, Apigee, as being a powerful tool for incumbents because traditionally, a lot of insurance information sits in separate locations.
“Insurtechs have a different problem. They have technology ease, but they don’t have historical data, so they are pooling partnerships for that purpose as well,” she said.
Google’s key insurance partnerships
Brit Insurance, Google Cloud and the University College London collaborated in May 2020 to launch a follow-only Lloyd’s of London syndicate called Ki.
At the time, James Birch, head of innovation at Brit Insurance, told Insurance Times: “Ki is the first incubation of that partnership, focusing on the follow-only market within Lloyd’s of London [and] trying to streamline a lot of the operational inefficiencies, as well as providing more broker-led solutions, [which] provides an advantage to all market participants.”
Ki began trading in January 2021. In May this year, the syndicate announced that it was “on track” to deliver its full year premiums, following a strong first quarter.
The syndicate has also updated its platform by developing and releasing its first broker API.
Applied Systems expanded its partnership with Google in February 2021 - it aims to enhance cloud technologies following an investment by the tech giant’s venture capital arm CapitalG.
Applied Systems originally partnered with Google back in October 2018. At the time, Jesse Wedler, Capital G’s principal, said Google was actively looking for further investment in the insurtech sector.
Speaking about the partnership expansion at Insurance Times’s three-day Insurance2025 conference in April, Stephen Murphy, customer success director at Applied Systems Europe, said: “The partnership will ultimately enable our brokers to leverage technology like artificial intelligence, machine learning and [application processing interface] technology.
“Ultimately, [it will] provide a more end-to-end digital experience and cut down the time and increase the speed of doing business. This partnership has developed and matured our research and development pipeline.”