Interview: Ravi Tewari

Which segments of the insurance sector show the most room for growth in Trinidad and Tobago?

RAVI TEWARI: In absolute terms life and pensions remain untapped markets. In the property and casualty segment the penetration rate is marginally better, although there is also room to grow. In any case, opportunity exists to significantly increase the number of customers in the market by favouring digital distribution channels.

The issue is that the market is soft and will continue to remain soft in the future. However, even though this might pose downward pressure on total premiums, there is scope to increase the number of customers and raise margins by adopting digital distribution methods and more automated policy processes.

How have insurance companies’ strategies evolved?

TEWARI: With online distribution on the rise, consumers will be presented with a wider range of insurance providers, both domestic and international. At the same time customers are becoming more demanding, wanting in the manner of their choosing.

While the insurance industry has not reacted to the changing environment quickly enough – with most companies operating on legacy systems and using traditional methods to deliver customer services – adaptation is nevertheless a priority for insurers. Insurance companies are thus becoming more technologically driven in order to meet customer needs. Adopting technological solutions allows companies to operate in other markets, which can bring down the unit cost and make the product more attractive.

What steps have been taken by insurers to ensure more effective data harvesting?

TEWARI: Data will increasingly become an asset of insurance companies and not just an enabler of transactions. While the successful companies of the past are those that offer dynamic products and have diverse assets, the successful companies of the future will be those that can best leverage data to help increase revenue and develop services.

There is much discussion surrounding a secondary market for the exchange of data. Factored into this market are the regulations around the sharing of data and consent, which is critical. T&T already has regulation based on sharing data without consent, and it will only become more and more robust. However, challenges remain regarding how to make data anonymous and how to convince the customer that by sharing their data they gain a value-added service.

To what extent will technology transform insurance companies in the future?

TEWARI: In the future it will be very hard to tell the difference between an insurance company and a tech company. Insurance is, at its core, a mathematical model and is completely intangible. Technology will enable insurance to use the model in all sorts of new ways. The growth of the internet and cloud-based computing have made geography irrelevant to insurance providers, while the growth of pay-per-service computing has made scale irrelevant. Every insurance company now has the ability to operate anywhere in the world, regardless of the size of its operations.

The focus, therefore, should be on the use of technology to create ideas and new products. From the creation of products and devices that can be worn on a person, to the use of artificial intelligence to supercharge products and make them hyper-responsive to individuals, or the industry shift from generic products to highly customised, bespoke products, insurance will become more transactional. Millennials, for example, want to buy insurance on a per-life-event basis, which was not previously possible.

In the next few years the level of innovation in insurance will be substantial. We will enter a golden age of innovation, with technology opening up opportunities for the most creative insurance companies to succeed.