Discovering the Future of Risk
Previewing The Institutes’ inaugural annual event
By Phil Gusman
We are at a turning point today as technology advances at a speed that is changing the face of risk. What is the future of risk and how can risk managers and the insurance industry adjust and prepare? That will be the focus of The Institutes’ inaugural annual event, “The Future of Risk,” which will be held April 10-12, 2019, in Chicago.
Advancements in technology are changing risk in two key ways for the insurance industry and for risk managers: by creating new risks that need to be managed, and by creating new tools that industries—including the insurance industry—can use to manage existing risks.
Speaking to the disruptions occurring within the insurance industry, Robin Smith, CEO of WeGoLook, says, “Think of all InsureTechs that have been popping up over last several years, and the non-traditional platforms or digital insurance.” She notes that these all pose risks to legacy carriers, which must now look at and modernize their own operations and processes.
Chris Mandel, senior vice president, strategic solutions & director, Sedgwick Institute, Sedgwick, looks at what recent and future advancements in technology mean for risk managers, who will need to look beyond just purchasing insurance to manage and mitigate these emerging risks. “People think that hacking is all there is to it,” Mandel says about the increasingly digitized nature of risk. “As difficult of an exposure that hacking is, and the havoc that it creates, I think they need to realize that it is going to get more complicated.”
Smith and Mandel serve on the advisory board that helped determine the conference’s focus and tracks. Smith says the conference is targeting risk managers, brokers, data analytics professionals, insurance IT personnel, and industry C-suite executives. She says that while there are a number of conferences that discuss risk, the goal with this one is to cover emerging topics in unique ways. “We want this event to be relevant, educational; we want this to be memorable,” she says. “We want people to take some of the ideas we have and take them back and apply them to what they are working on.”
Smith says one unique aspect of the conference is that the humanoid robot “Sophia”—designed to mimic human expressions and behavior—will be a featured attendee and will demonstrate advancements in robotics and artificial intelligence. “You look at AI and robotics—that’s another risk that needs to be discussed,” Smith says. “AI is a huge disruptor.”
Mandel says the advisory board’s primary role was to not only help select topics that would appeal to professionals in the field, but also to find the right experts to talk about those topics. Smith notes that the board is well suited to take on that task: “What I love about [the board] is it’s a diverse group”—made up of brokers, C-suite executives, engineering and IT personnel, and representatives from carriers large and small—“all working together to come up with premier session ideas.” The result, she says, is a focused conference that will be relevant to professionals from all corners of the industry.
And, of course, there will be ample opportunity for networking. “We want people to socialize and get to know one another. Partnerships are key,” Smith says, noting that when it comes to understanding technology and leveraging it, “you can’t do it all yourself.”
Tracks and Sessions
The conference sessions will fall into three tracks: Blockchain, Data Analytics, and RiskTech. Smith says, “As a group, those were what everyone felt like are the three main drivers of the future of risk for the industry. It was definitely a group consensus.”
As an example of what the individual sessions will offer, Smith and Mandel discuss the ones they will be presenting. Mandel will present on the topic, “The Digitization of the Risk Profile: Implications for Risk Leaders.” Mandel says, “The real challenge is for risk managers, and everyone that is a stakeholder in this business of risk, to understand this concept of digitization and that it emanates from technology.” The session will cover risk exposures to organizations that are increasingly affected by the internet, IoT, rapidly advancing technology, loss of control of personal information, big data, automation of functions, and artificial intelligence.
The takeaway for the audience? “I think awareness is the immediate need,” Mandel says. “Forums can promote awareness about the fact that those who are pretty comfortable in their current jobs, who have any real interest in becoming something more, need to put this upfront as a priority for themselves—what kind of information and knowledge they will need to succeed in the future.”
He says there are risk managers who understand insurance, but have never thought much about strategic risks that are generally not insurable, and have never thought beyond using insurance as the primary risk transfer and mitigation technique. This is fine, Mandel says, if they want to spend their careers in middle management at companies that expect no more of them. “But if they want to be a chief risk officer, they need to recognize what that means in the eyes of most leaders and board members—we have a risk profile, we treat some with insurance and we have other risks not subject to insurance, so what do we do there?”
Mandel says the session will raise awareness about these risks and encourage attendees to have their own personal action plans, or career plans, so they can be viewed as critical personnel when it comes to dealing with strategic risks.
Smith, meanwhile, will be a co-presenter on the session, “InsureTech Insight: The Power of On-Demand Models for Disaster Response.” It will cover how carriers are using technology during catastrophes to meet customers’ needs quickly and efficiently while also collecting data instantaneously. “When you start talking about how the industry has changed, I definitely see companies talking about leveraging technology to help prepare policyholders,” Smith says. She adds, “I think carriers are looking at how to get information quickly in order to close claims quickly and cost effectively,” not to mention gaining a competitive edge by passing savings to customers.
In that regard, some of the internal insurance-industry risks posed by technology should be seen as opportunities, but this technology must be better understood and properly leveraged. With respect to data analytics, for example, Smith notes, “Everyone looks at data, but what are they doing with it to make things better for customer?”
Registration is now open at https://events.theinstitutes.org.