Insurers must mimic Meta and leverage their data: Arndt Gossmann

The amount of data held by the largest insurers is comparable to that in the hands of internet giants such as Facebook and Amazon—yet the industry is unable to leverage it because such a high percentage is stored in an analogue format. Changing this should be the number one priority for any insurance CEO.

That is the view of Arndt Gossmann (pictured), the co-founder and chief executive of DGTAL, a software company formed in October 2021 as a joint venture between liability manager Gossmann & Cie and Deon Digital, a software company based in Copenhagen and Zurich.

The business has the stated aim of “building a digital factory” to allow insurers to use applications along with their existing systems in order to fast-track and optimise core processes such as claims management.

But, for Gossmann, there is a bigger picture: if insurers can learn to leverage the vast amount of data they hold, it would revolutionise the industry—and their valuations.

Tech giants such as Meta or Amazon are typically valued at many times their book value in contrast with most insurers. A key reason for this difference, he said, is insurers’ inability to use and leverage their data.

“When you consider this dynamic, there should only be one mission for any new CEO in an insurance company: to use data better to boost the value of their company. That is why technology such as ours can be a game-changer. Technology has the power to change the entire industry.”

DGTAL has set out to target claims handling within the $5 trillion insurance industry for good reason. Claims consume 75 percent of insurers’ revenues yet the process in most insurers has remained unchanged over the past century—due to a lack of data and technology.

DGTAL has built a platform that enables fully automated claims handling. It aggregates both structured and unstructured data and has developed what it claims is the first context-based artificial intelligence (AI) into insurance and claims handling.

Despite insurance being a data-intense business model, insurers rely on technology standards invented in the 1980s, Gossmann claims.

“Recent technology shifts, as used by Silicon Valley companies, have not yet reached the industry. Claims handling is the core business process yet it is usually managed in-house and, despite its economic significance, remains mostly manual. The key reason is the low availability of data,” he said.

DGTAL has calculated that only 2 percent of the relevant information with insurers is structured and machine-readable. “Most of the data is hidden in unstructured information such as paper files, PDFs, emails or images. Although highly repetitive, it needs qualified human interaction to understand and manage a claim.”

DGTAL claims to be the first open AI platform that enables fully automated claims handling. It has developed technology to understand and transform unstructured insurance information into machine-readable, smart data. It offers its application as an AI-as-a-service to allow any insurer to transition from legacy systems and access the data and technology needed using a shared ecosystem approach.

Gossmann is in Monte Carlo this week to expand his pipeline of clients. His firm has already completed a number of pilots with clients and is now moving on to a more robust rollout of the technology with a number of clients. “Some are now moving to the beginning of a complete, profound digital transformation of the entire company,” he said.

He again stresses the sophistication of the technology the company has developed. “We’re using the same level of technology as the most cutting edge in Silicon Valley at the moment and applying it to insurance. We’re not reinventing the wheel but we’re using the latest wheels which are used so far for other industries and applying them to insurance,” he said.