How new technologies like Google Chauffeur could dramatically change motor insurance.
It’s the age old question for many actuaries – what do you do with yourself when you’ve finally qualified? Some people go travelling around the world. Some decide to pick up a language or continue studying another discipline. In my case, I was lucky enough to win the chance to do a little of both!
Early this year my manager sent me an email calling for applications to the 2014 Aon Benfield Scholarship. The winner of the Scholarship would receive a ticket to London to study at the 49th Global Clients Reinsurance Seminar, and would be invited to attend the ANZIIF Annual Insurance Industry Awards dinner. As part of the application, it was a requirement to write a 2,500 word essay on whether ‘Google Cars’ would end the insurance world as we know it. While I was initially daunted at the thought of such an undertaking (I hadn’t written an essay since university!), the prize was just so amazing that I couldn’t possibly let the opportunity slip.
The opportunity to learn more about reinsurance was a strong draw card. While I had been exposed to the basic concepts of reinsurance through my actuarial studies, I really wanted to have a better understanding of the structure of reinsurance arrangements, and how they work ‘behind the scenes’ beyond the simple gross less net measure that I normally get to see in my day job. Another aspect of the course which appealed, and which was potentially at least as important as the subject matter skills, was the opportunity to extend my personal development and people skills through meeting other insurance professionals from different countries and working backgrounds, thereby broadening my thinking and knowledge. The fact that all of this would take place in London was definitely a bonus!
In my essay I explored how new technologies like Google Chauffeur could dramatically change motor insurance. The initial impact of new technologies such as Google Chauffeur will be to remove or at least dramatically reduce driver error as a factor in accidents, improving overall claims experience. The consequence of this improvement could be an estimated 60% reduction in motor insurance premiums, which at first glance would appear to be a major blow to insurers. However, the more I discussed and researched the topic, the more I began to think that these new technologies can open up opportunities for insurers to develop innovative new products, alternative distribution approaches, and new customer analysis which can help them thrive, not just survive. For those who are interested in reading more on this, my essay will appear in edition five of the ANZIIF Journal magazine which comes out in December this year.
Google Cars are autonomous vehicles – Google Chauffeur is the technology that allows Google Cars to operate.
This technology has been developed with the goal of reducing humans’ role in driving to the point of having little to no interaction with the controls of the vehicle. this technology aims to increase the safety of travel, along with saving motorists’ time. Passengers will get to their destination faster due to efficient driving and better traffic flow. In addition to this, passengers could hold meetings or perform other tasks while travelling.
The seminar was all I had hoped it would be – and more! I was one of just over 30 people representing countries like Switzerland, Bahrain, Brazil, Singapore, Malaysia, Algeria, China, Germany, Spain, Greece, Canada and Saudi Arabia. I’d worried before I left for London that without a reinsurance background I might get left behind, but the course was structured in such a way that we started with the basics and built up from there. I didn’t get left behind – and I actually surprised myself by the end of the course by managing to price a reinsurance program in our final exercise! The course covered a wealth of information, ranging from the role of the reinsurance broker, to facultative reinsurance solutions, through to more specialist subjects such as Dynamic Financial Analysis (DFA), Solvency II and rating agencies. I thought the structure of the course was exceptional, where bookwork and basics were underpinned with real world examples from market practitioners. An organised visit to Lloyd’s of London was incredible – standing in the hub of the London market and learning the stories behind the inception of insurance was a great way to help put everything into context. Learning about how much insurance has grown and changed since those early days really made me think about where the future might lie, and has made me excited for the future.
Outside of the course work the insights and conversations I had with the other attendees really opened my eyes to the different market practices and conditions, and helped broaden my way of thinking by introducing new concepts and ideas. It was also great to mingle with the participants on a social level, as well as see some of the sights of London through the organised group activities! Everyone was so welcoming and friendly, from the participants to the Aon Benfield staff. It was really such a great bunch of people to spend two weeks with. One of the highlights of the social calendar was a dinner cruise down the Thames. Watching the sun set over the river with my new friends, looking out at the London Eye and Houses of Parliament was an experience I will never forget. I was truly impressed with the level of professionalism and organisation Aon Benfield brought to the seminar. While I can only imagine the work involved in such a huge logistical undertaking they somehow managed to make it look effortless.
If you do have the opportunity to apply for this scholarship I would highly encourage you to do so. It is truly a once in a lifetime chance to attend a world class seminar, learn something new and connect with people from different insurance and cultural backgrounds. In my experience it not only improved my technical knowledge of reinsurance, but also gave me a new way of thinking. Hearing about real world examples from the participants and how they approach things in a different way helped broaden my mind and has made me a better insurance professional and advisor in my day-to-day role.
I would sincerely like to thank Aon Benfield and ANZIIF for giving me the opportunity to attend the 49th Global Clients Reinsurance Seminar in London. It was an amazing experience to spend two weeks studying with other insurance and reinsurance professionals from around the world, learning from some of the best in the business. My employer, Suncorp, also deserve a huge thank you for not only allowing me the time to attend the course, but also for really supporting and recognising my application. I also couldn’t have done it without the help and encouragement of many of my colleagues who were never too busy to chat about Google Cars and even give me sightseeing advice for my London stint!
CPD: Actuaries Institute Members can claim two CPD points for every hour of reading articles on Actuaries Digital.