What's in your future?

By  Vero Insurance

Recent media reports discussed a fascinating and mildly frightening technological development from Chinese insurance giant Ping An, based around the use of facial scanning and artificial intelligence (AI).

The insurer has begun utilising AI to identify micro-expressions on the faces of potential customers. Certain expressions would reveal that applicants for health insurance may be lying and will therefore likely be unprofitable.

Furthermore, the scanners also check out the body mass of applicants. Overweight? That’ll cost you!

It’s a brave, new, highly technological world in which we’re living, but what exactly does this mean for the clients of brokers? What new risks and threats are waiting around the corner and how do brokers best illustrate them to those who require cover?

The big picture

The Global Economic Forum’s Global Risks Report 2019 says the top five global risks in terms of likelihood are:

  • Extreme weather events
  • Failure of climate change mitigation and adaptation
  • Natural disasters
  • Data fraud or theft
  • Cyber attacks

Just ten years ago, this list was completely different. The top five in 2009 were:

  • Asset price collapse
  • Slowing Chinese economy
  • Chronic disease
  • Global governance gaps
  • Retrenchment from globalisation

What a difference a decade makes! So how can brokers prepare clients for a future that is impossible to predict?

Conduct deep research

Shane Genziuk, who during the past decade has held senior strategic, technology and HR roles across the insurance industry, says large insurance firms aren’t delivering a lot of long-term perspective, which creates good opportunities for brokers to make a difference through the research they can reveal to their clients.

“Remember, a broker is only as valuable as the information they’re able to provide and the unique insight they are able to bring,” Genziuk says.

In order to achieve this, they must look deeper for indicators of future movements in their clients’ industries.

“If a broker can offer a client information they can’t find elsewhere, that’s a powerful offering. Say, for example, you have a Gartner subscription. Their research on future trends isn’t necessarily made available to the public. If you were to bring that to your clients, that would be valuable because they can’t just go and find it themselves. But if you are only providing information that they can find themselves, why would they work with you?”

A Gartner subscription can be costly, but there are other ways a broker can build their knowledge and synthesise valuable insights. From wide reading of the latest research papers, both industry and academic, to taking part in industry learning opportunities, like those available through the Suncorp Learning Campus.

Take your clients on a journey

Paul Higgins, futurist and founder of consulting business Emergent Futures, says that when he is discussing upcoming issues with SME clients, there are three important points to make.

One is that people who own or manage businesses must envision more than one image of the future of their sector.

“If you’re in a business and you rely on a single forward vision for all of your income and all of your strategy, that only works if that one picture of the future comes true, and it never does,” Higgins says. “Having several alternative future views encourages you to develop various ideas around dealing with strategic risks.”

The second step, Higgins says, is to take those future views and figure out the key strategic risks that each introduces, then work out how you might recognise those risks and what you should do to mitigate them. How often should you look for those tell-tale signs, to ensure that none of the imagined risks are becoming a reality?

Finally, recognise that there are now different opportunities to identify risk, and it no longer involves looking exclusively at historical data. One good illustration of this is the aforementioned Ping An example.

“In the past, risk assessment has been largely based on historical data around life expectancy, actuarial tables, accident data, etc,” Higgins says. “But some of the real value of data these days is its ability to figure things out before they happen.”

He offers the example of an American business called Ceres Imaging, which is supplying disease, water and pest predictions for crops. A plane equipped with special imaging equipment is flown over a farm and, the company claims, can identify crop diseases weeks before they are visible to the human eye. The company provides probability forecasting for farm owners.

“I think technology is going to rewrite a whole lot of business models over the next decade,” Higgins says. “So, look out!”

Disclaimer: The information is intended to be of a general nature only. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.