“The world of insurance does not suffer the digital divide”
TEXT: RAMÓN OLIVER PHOTOGRAPH: ALBERTO CARRASCO
Since it was established in 2001, the Julio Castelo Matrán International Insurance Award has recognized scientific works or innovative projects on matters related to Insurance and Social Welfare. In this, its 10th edition, the biennial award went to Abel Veiga, doctor and professor of Insurance Law and Commercial Law at the Universidad Pontificia Comillas, for his work “Seguro y tecnología. El impacto de la digitalización en el contrato del seguro” (Insurance and technology: the impact of digitalization on insurance contracts). The author of numerous books and scientific articles, in this work Professor Veiga addresses one of the great challenges facing the world of insurance both today and in the future: digitalization and its consequences.
Before we enter the world of technology, why is research in social areas important?
Research plays a crucial role in society and in the development of knowledge, not only from a scientific point of view, but above all as it can provide solutions to the problems facing today’s societies. Even more so at a time marked by technology and digitalization in which the boundaries between economic, legal and technical aspects are very blurred. As legal practitioners, we have the enormous challenge of weighing up these frontiers in order to offer answers and solutions that are valid and coherent within the current legal logic as well as with the old principles of law.
The world of insurance is a very traditional sector, how does it relate to technology?
Probably, despite its reputation as a classic field, insurance is one of the sectors in which the emergence of technology is generating the greatest number of studies and impactful solutions. A great deal of emphasis is being placed on issues such as the digital development of insurance contracts, the structure of the risk and the in-depth knowledge of this by analyzing millions of data points provided by big data.
What role will this digitalization play in the evolution of the insurance sector in the coming years?
Thanks to technology, for the first time in history we can truly know the intensity, impact and frequency of risk, and, in the case, for example, of parametric insurance, offer a practically immediate and detailed response when a certain type of claim occurs. On the other hand, this knowledge will also allow premiums to be adjusted perfectly, in addition to bringing legal and emotional certainty to both policyholders and insurers.
What specific new technological applications will we see in the insurance sector in the coming years?
I believe that very streamlined insurance products will be created, tailored to reality and to the sensitivity and needs of the insured parties. With policyholders continuously generating data in real time, it will be possible to monitor how a person drives, what their state of health is or what healthy habits they follow, with which it will be possible to generate insurance policies that are better adapted to the risk.
At the contracting level, we could see a very dynamic model of smart contracts or intelligent contracting, with extremely rapid claims handling. On the other hand, artificial intelligence will lead to the insured becoming more familiar with insurance techniques, and it is feasible that they will even participate in policy preparation in some sort of customized peer-topeer insurance.
Is there a digital divide among insurance professionals?
Quite the opposite; I would say that the insurance world is perhaps the sector where there is the least digital divide. The last five years have seen a flurry of activity in terms of technological adaptation over the entire financial sector, including the insurance market.
We are hearing a tremendous amount about the possibilities of big data and artificial intelligence. But are these technologies risk-free?
There are threats, such as the arbitrary exclusion of a certain type of policyholder based on gender, race, religion, employment status, cultural level or creditworthiness. This is a serious risk, which can lead to inequalities as has already occurred in some cases in the United States.
So, is technology a threat or an opportunity?
Without a doubt, it is a challenge and an enormous opportunity. It allows a more realistic approach to the needs of insured individuals, and to the diversity or differentiation of risks presented by each of them. In this way, products can be created that are better adjusted to the personal circumstances of the insured at different times in their lives.
Finally, what does this award mean to you?
This is unquestionably one of the most important awards in the world in its category. For me it is an honor to receive it, and it is also a special joy, since I am the second academic from my university to be presented with it. The first was almost 20 years ago, to the now Professor of Civil Law at the Universidad Complutense in Madrid, Mariano Yzquierdo Tolsada, one of my great teachers. Now it is my turn, and the pride I feel is immense.