InsurTech Insights: Q&A with Mark Breading

Mark Breading, Senior Partner at ReSource Pro, is a visionary in the insurance industry, renowned for his forward-thinking strategies and expertise in integrating technology with business innovation. With a distinguished career spanning roles at IBM and now leading ReSource Pro’s consulting and advisory services, Mark brings unparalleled insights into the digital transformation of P&C insurers. Recognized globally as a top influencer in InsurTech and a mentor in the industry, Mark continues to shape the future of insurance through his pioneering methodologies and strategic leadership. In a recent Q&A session with InsurTech Israel News magazine, he shared exclusive insights and perspectives for the readers.

In your view, what are the most significant trends shaping the future of InsurTech over the next decade?

Breading:

1. Demonstrating (financial) value – there will be a winnowing of winners and losers among Insurtechs with the winners being those that deliver quantifiable value to their re(insurer), MGA, or broker customers.
2. Addressing coverage gaps – embedded and parametric models will rely heavily on addressing risks that heretofore have not been covered by the industry. There will be other Insurtech entities that focus on specific lines and tailored coverages to expand the overall market.
3. New Insurtech MGAs – will continue to be launched to capitalize on the move towards more specialization.

Can you discuss some of the most innovative uses of technology you’ve witnessed in the insurance industry, and how they have transformed traditional business models?

Breading: I don’t think technology has transformed the insurance industry, but it has certainly been a key force in its evolution. Here are three general examples of how technology has benefitted the industry:

1. Vehicle telematics is a long-term trend that has made a big difference in auto insurance.
2. Digital capabilities have significantly improved policyholder and agent experiences.
3. Aerial imagery for property inspections and CAT damage assessment.

That said there are many very innovative use cases for AI (especially in underwriting and claims), parametric insurance, computer vision for auto damage assessment, digital payments, wearables in workers comp…  all of these developments have significantly improved the industry, but none have fundamentally transformed the industry.

What are the biggest challenges facing insurers in adopting new technologies, and how can these be overcome?

Breading:

1. Organizational inertia – many insurers have good financial performance so there is no burning platform to change. External market events and actions by competitors can change that picture though.
2. Integration of systems – one of the biggest challenges is incorporating new tech solutions into the existing tech stack.
3. Resources and skills – many insurers, especially smaller ones, have a shortage of talent and their current resources are fully engaged in other projects.

How do you see artificial intelligence and big data evolving within the insurance sector, and what impact might this have on consumer relations and policy personalization?

Breading: AI has been leveraged by insurers for a long time. Predictive models based on machine learning technology have been used in underwriting, claims, and other areas extensively over the past decade. Computer vision technologies coupled with ML have enabled aerial imagery to become commonly used in inspections and claims. Now GenAI is introducing a whole new set of potential use cases. Right now it is still early days but experimentation is underway across the industry.

Insurers are also using AI in chatbots, although there are still relatively few true conversational AI chatbots in use. Our research shows that may are concerned that this could have a negative effect on customer satisfaction.

Given recent global events such as the COVID-19 pandemic, how do you think insurance companies need to adapt their strategies to better manage future unforeseen challenges?

Breading: The insurance industry is resilient and has been able to adapt to many major events over time. The main approach many are taking now is to modernize their systems to enable more rapid response and reaction when market conditions change.

As a mentor with InsurTech Israel, what qualities do you look for in a startup before deciding to mentor them, and what common pitfalls should new InsurTech entrepreneurs avoid?

Breading:

1. It starts with a solution that fits an important market need
2. Second is that the market need equates to an addressable market that is large enough to matter
3. Third is the quality and experience of the management team – especially related to insurance background

A common pitfall is arrogance and a disregard for the insurance industry. Talk of disruption and criticizing the industry is not a good way to lead the conversation.

What key strategies would you recommend for insurance companies looking to integrate InsurTech solutions into their operations?

Breading: One piece of advice is to rethink procurement procedures. Insurtechs (and their potential for the customer) can be crippled by onerous procurement. Another is to ensure that their core systems platforms are modern. Integration of insurtech solutions must often occur with the policy, billing, claim, and agency management systems – if these are legacy systems the integration is much more difficult.

Having transitioned from a lengthy career with IBM to a significant role in InsurTech, what advice would you give to professionals looking to navigate their careers towards technology and innovation within the insurance industry?

Breading: Insurance is a great industry with a strong contribution to society and a collegial atmosphere. Approach the industry with a spirit of collaboration and cooperation – contributing to the mission and success of the industry.

You’ve recently been recognized as Mentor of the Year by Consulting Magazine. What mentoring approaches do you find most effective, and how do you tailor these strategies to suit different mentees?”

Breading:

1. Always be ready to shift into teaching mode – recognizing teachable moments to share expertise that may be technical, industry related, or personal/career related.
2. Actively seek opportunities for your mentee that will widen their experience and stretch their thinking.
3. Invest in understanding their desires and needs – and incorporate those into career advice and development plans.

 

Looking forward, are there any new projects or areas of research you are particularly excited about in the insurance technology space?

Breading:  There are two areas I am excited about for the industry:

1. The ability to address coverage gaps – there are so many risks in the world that are not covered by insurance. Technology and new models like embedded and parametric insurance are enabling these risks to be profitably covered… and the ultimate winner is the customer.
2. The ability for more and more proactive risk management – the IoT, telematics, AI and other technologies enables us to prevent accidents and incidents, or at least mitigate their impact.