In October 2023, MBA students specializing in Risk Management and Insurance (RMI) engaged with industry experts in the annual advisory board meeting. It was a great opportunity for both students and the board to network and learn from one another, and we did. We talked about some interesting topics in today’s world of RMI:
- How innovation can improve the insurance industry’s reputation led by Fritz Merizon and Chris Lane
- The risks, and opportunities, from the use of artificial intelligence led by Caroline McCloskey, David Leemon, and me
- The insurance industry’s influence on green construction led by Siddarth Upadhya and Abdulkarim Almurayh
Our first conversation was about how we can make insurance a more appealing, long-term guarantee. Insurance is a product that is not “cool,” so how do we make it more attractive to customers? That’s where digitalization in insurance, also known as “insurtech,” enters. Insurtech has brought significant changes in how insurance companies operate and interact with their customers. Digitalization in insurance has the potential to make the industry more customer-centric, efficient, and adaptable to changing market conditions. It also comes with challenges, however, including the need for robust cybersecurity measures, regulatory compliance, and ensuring that customers can navigate and trust digital insurance processes.
Speaking about technological advances in the industry, we have the new trend of artificial intelligence (AI) that is shaping not only the insurance industry but every industry; businesses need to hop on the trend or they will risk falling behind and losing their competitive edge in the market. In RMI, AI could help to make better and faster underwriting and claims processes. Also, it will elevate the process of collecting data and creating databases for data mining. Data is everything, and Jim Swanke mentioned in the meeting that “He who controls the data, wins.” AI represents big opportunities, but great opportunities also come with lots of risks, and we talked about some risks affiliated with AI such as cyber security threats, privacy concerns, and data breaches. The conversation also included the bigger picture of AI like societal risks impacting the job industry, and environmental concerns.
The last topic we touched on was green construction and the insurance industry’s influence. We learned that a significant risk impacting businesses today is climate change. Buildings contribute 40% of the annual carbon dioxide emission, making green practices important. Green building is a concept dealing with design and construction that not only may increase the overall efficiency of the operation but also may enhance the health aspects of the occupants through environmentally friendly technology and construction, and even increase the building’s marketability. Many green construction projects require customized insurance policies to account for their unique aspects, ensuring comprehensive coverage. It is important for developers, contractors, and project owners involved in green construction to work with insurance experts who understand the specific challenges and opportunities of sustainable building practices. Tailored insurance coverage can help protect against potential risks and uncertainties associated with green construction projects while promoting environmental responsibility and long-term sustainability.
Insurance and risk management is an industry where knowledge is infinite, and you will not be able to know everything, so it is important to continue to learn every day. I am glad I had this opportunity to hear from experts in the field about these fascinating topics that are shaping our industry.