Transforming Insurance: Q&A with Freddie Scarratt from Gallagher Re.
If you'd like to hear more from Freddie, you can find him at the Insurance Transformation Summit in London this June.
Freddie Scarratt is Gallagher Re’s InsurTech Global Deputy Head, leading the offering in the UK, EMEA and APAC regions.
Freddie aims to bridge the gap between the insurance and technology sectors and enable clients to capitalise on the vast opportunities presented by the evolution of InsurTech. This includes raising capacity for new risk originating InsurTechs, both in the UK and US.
Furthermore, Freddie has practical start-up experience - leading the structuring and implementation of Deposit Unlock, a UK consumer mortgage product in the housing finance sector.
Hi Freddie, can you tell us about Gallagher Re's InsurTech offering?
Our comprehensive suite of services and expertise in the reinsurance and InsurTech sectors allow us to provide strategic guidance, reinsurance solutions and implementation support to our clients and InsurTechs.
The worldwide InsurTech practice at Gallagher Re vets InsurTech businesses at scale to bring the best-in-class technologies into the industry; through partnerships with clients, technology integration, and advisory services. With over 2,500 businesses vetted – the next cohort of InsurTechs’ can benefit from our research, insights and experience.
Our advisory and reinsurance solution group aims to bridge the gap between the insurance and technology sectors, enabling our clients to capitalise on the vast opportunities presented by the InsurTech evolution.
Lastly, we produce the Global InsurTech Report on a quarterly basis – with the 2024 series of reports examining the role of Artificial Intelligence (AI) in our industry, breaking down the function and processes of AI into their relevant parts within the reinsurance value chain. The first report of this series focused on distribution and sales.
How have you seen the insurance market change in recent years?
In recent years, the insurance market has changed significantly due to technology. Digital transformation has led to online platforms and mobile apps for policy management and claims filing. Data analytics and AI are used for risk assessment and fraud detection. Telematics and IoT allow insurers to collect real-time data for personalized policies. Insurtech startups bring innovation and new business models - $55Bn has been invested into InsurTech globally to date*. Lastly, Cyber insurance has emerged to protect against cyber risks and is now a global class of business offering solutions to SMEs and global reinsurers alike.
What does this change mean for modern insurance businesses?
For modern insurance businesses, the changes brought about by technology present both opportunities and challenges. On the positive side, embracing technology allows insurance companies to streamline their operations, improve efficiency, and enhance customer experience. Digital platforms and mobile apps enable policyholders to manage their policies conveniently, file claims easily, and communicate with insurers seamlessly. Data analytics and AI provide valuable insights for risk assessment, fraud detection, and personalized insurance offerings. Telematics and IoT enable insurers to offer usage-based policies and gather real-time data for accurate risk assessment.
However, modern insurance businesses also face challenges in adapting to these technological changes. They need to invest in the necessary infrastructure, software, and talent to effectively leverage technology. They must also ensure data security and privacy as they handle large amounts of sensitive customer information. Additionally, the rise of insurtech startups introduces competition and disrupts traditional business models, requiring established insurance companies to innovate and stay agile.
Overall, insurance businesses need to embrace technology as a means to stay competitive, improve operational efficiency, and meet the evolving expectations of customers. By leveraging technology effectively, insurers can enhance their offerings, streamline processes, and provide a better overall experience for policyholders.
“there is a growing acceptance and understanding that failure is an inherent part of the innovation process.”
Traditionally, what have been the blockers to innovation in insurance? And do you see that changing?
The fear of failure within innovation has long been a barrier for many individuals and organizations. The risk of investing time, resources, and effort into new ideas, only to have them fail, can be daunting.
However, there is a growing acceptance and understanding that failure is an inherent part of the innovation process. In fact, failure is now seen as a valuable learning opportunity that can lead to future success. Organizations are encouraging a culture of experimentation and embracing the concept of "failing fast" to quickly iterate and improve ideas.
This shift in mindset is fostering a more accepting environment where individuals are encouraged to take risks, learn from failures, and ultimately drive innovation forward.
In your opinion, what needs to happen for insurers to continue to innovate and keep up with market trends?
Creating a space for innovation and empowering people is essential for fostering a culture of creativity and driving meaningful change. It involves providing individuals with the freedom to explore new ideas, take risks, and think outside the box.
Organizations can create this space by encouraging open communication, collaboration, and cross-functional teams. Empowering people means giving them the autonomy and resources they need to pursue their innovative ideas, while also providing support and guidance along the way. By creating an environment that values and rewards innovation, organizations can unleash the full potential of their employees and inspire them to contribute their best ideas and solutions. As an example, I am part of Gallagher Re’s working group on AI – looking at solutions we can bring to GRe to enhance our client offering and improve efficiency within the business.
What role do environmental, social, and governance (ESG) considerations play in shaping insurance practices?
They play a huge role – this can be seen in new products created to meet the challenges of ESG – including carbon credits, renewables and AI. Internally at Gallagher Re, our Climate and ESG team supports our clients’ preparedness for a shift to a financially resilient future. The team provides advisory, analytical and transactional services to ensure clients are well equipped with tailored solutions for managing current and emerging climate risks and opportunities.
Can you give an example of an InsurTech that you admire? And why?
There are too many to choose from!
To list a few, I admire (and for full disclosure are not all Gallagher Re clients) include Renew Risk, a London-based clean-energy risk analytics SaaS startup that is filling hole in current offshore modeling techniques; Arma Karma, a UK based startup focused on personal lines insurance products in a shape that fits Gen-Z lifestyle; ManyPets as they combine insurance and wellness for the animals we love; and lastly, Shift Technologies who utilize AI for insurance decision in fraud detection, acclaims and compliance.
InsurTechs recognize that specializing in underserved — or, in the case of climate, increasingly complex markets — presents a unique opportunity to build a profitable and sizable business. By focusing on these specific segments, InsurTechs can carve out a niche for themselves in the insurance industry while contributing to our collective global effort on climate change.