The Prevention Imperative: Reimagining Insurance for a More Resilient World

Dean Richardson: Hello. Welcome to Sapiens Insurance 360 podcast. I’m your host, Dean Richardson, Sales Director at Sapiens. I’m so glad you’re out there listening. This is where we discuss the latest news, trends, and issues across the insurance technology spectrum. With our latest episode, “The Prevention Imperative, Reimagining Insurance for a More Resilient World,” starts here.

A decade ago, digital insurance transformations focused primarily on efficiency gains, expanding distribution channels, making customer journeys better. Today, carriers face a fundamentally different reality: escalating climate volatility, increasingly sophisticated cyber threats, and the widening protection gaps. These are demanding a fundamental shift from reactive coverage models to proactive prevention strategies. In this episode of the podcast, Onno Bloemers, partner of the First Day Advisory, explores how the insurance industry can evolve beyond its traditional role as a post-loss financial safety net. We’ll also examine the emerging paradigm of insurance as an everyday safety service, one that actually helps customers identify risks and avoid losses before they occur, rather than simply compensating for them after the fact.

Onno, welcome to the show! So glad you’re here to discuss this subject!

Onno Bloemers: Well thank you, Dean. Very happy to be here. Thank you for the invitation!

Dean Richardson: Great. So let’s begin. So, Onno, why do you believe predict and prevent is the next frontier for insurance?

Onno Bloemers: Sure. Well, the traditional pay when it happens model, is simply no longer sustainable. We see climate risks. We see health costs. We see mobility shifts. All these developments are overwhelming the traditional paradigm. Now predict and prevent, reframes insurance as a safety service using data and incentive partnerships, all geared to avert loss. And this way, by preventing by adding prevention to the insurance product, we can protect both customers and balance sheets. And we see this across business lines. We see IoT move from pilot to proof. In property homes, we see electrical fires being monitored and being and with early face recognition, we see all kinds of new leak sensors, weather-driven alerts, developments on the catastrophe site where homes are being fortified. All these developments across these different insurance sectors already show results. We all understand that the best claim is the one that didn’t happen. So prevention is not something you build on. It’s in fact, a new business model.

Dean Richardson: Thanks for that, Onno. So as a follow up, so what’s driving insurers globally to embrace this shift plan?

Onno Bloemers: Well, first of all, we live in a time where sensors are now cheap and connectivity is nearly everywhere. We have AI technology to separate noise from signal. So in short, we can detect much more. And we need to use that data, that information. All these data points, weather reports, and early signals of wildfire smoke or hill risk. Let’s put them to use, let’s help our customers to react in time to respond to this. And this is across all business lines.

Now, the second reason why this shift is now taking place is because of customer expectations. People understand that a payout is one thing, but having your life or business interrupted is much more important, and this approach helps customers to avoid disruption. Prevent the fire, avoid the crash, keep a website safe, everything like that. So insurance becomes something of a valued partnership. Not anymore the grudge purchase it used to be.

Now lastly, [the] third reason why this is happening is the increasing regulatory and societal pressure. We see the widening protection gaps in climate-exposed geographies and regulators and policymakers are all looking at ways to increase resilience and doing that in public-private collaborations where there’s an important role for insurers. Now prevention becomes the insurers’ social license to operate.

Dean Richardson: Okay, Onno. So it seems fairly obvious [that] it’s good for the customer, it’s great for the insurer. The claim either doesn’t happen or the claim is mitigated. So all sides win. So what makes predict and prevent hard for insurers to implement?

Onno Bloemers: Well, unlike many other innovations or transformations we’ve seen over the past years, this is one that affects every part of the insurance value chain. I think that’s a tough cookie to crack. It impacts your underwriting. It impacts your claims, your pricing, your distribution. So and it all has to work together in this new reality, and that’s kind of an operation that requires cross-functional ownership and incentives and KPIs. That’s an important element here. The second barrier may be that there are many data points, many pilots, or many projects where we have the insights, we have the data, but we don’t yet use them to trigger workflows. And there lies a job to be done. Translate available data into concrete customer value propositions and actions. So the leak alerts lead to a signal, which leads to a contractor that can dispatch to fix the problem before the claim becomes a really large claim.

Now the last point, third point here. That’s a matter of adoption and trust. Customers need to understand the value of devices, sensors that help them to keep safe. And of course, there may be matters of distrust. And you will have to convince your customers that it’s in their best interest. We’re here to help you to avoid the hassle. All this means that insurers need to organize prevention, not just as something on the side as another innovation experiment, but really as a core product.

Dean Richardson: Yeah, I think that’s a topic for another podcast there, Onno. So where the issue of trust, that consumers will trust their data in Tik-Tok, but not with their insurer. So there’s the next topic. So shifting gears slightly, so what role does technology have to play versus the behavior shift?

Onno Bloemers: I think technology is the key enabler here, by providing not just the signals and the insights, but also by making it easier for the customers. Insurance has now the potential to become something it has never been: [a] trusted partner in daily resilience. But what’s required is that it’s easy to install any new sensor or configure a specific app. It has to be very effortless, otherwise it’s never going to work. So getting the right technology here, developing it with partners is critical.

Now secondly, that technology also has to support the rewards programs where you try the safe behavior to lower premium or bundled services or cash rewards elements like that. So it is all seamlessly integrated. And lastly, the technology has to work in such a way and needs the guardrails to make it trusted to have clear boundaries on where you use the data opt-ins and all these safeguards that are required. In this way, you can make the transition from policing the risk to partnering on resilience.

Onno Bloemers: Thanks for that Onno. So we’re actually running short on time, so here’s my last question. How should insurance leaders start the journey?

Dean Richardson: I think it’s important that there is a clear and shared vision within the organization. There has to be an ambition that is shared and a roadmap. Otherwise, people will tend to keep working as they have always worked. But secondly, it’s also important to set up programs and pilots that quickly deliver results and build confidence that you’re on the right track. So pick one or two business lines, for instance, in motor insurance or in home. Find the right partners. There’s lots of examples out there of successful programs and what’s required to make that happen and use that to build the initial traction. Set up your own organization and build from there across your portfolio. And in the end, you need to bake it into your rates and your underwriting and all these aspects. But it’s important that you get some of these initial projects out there and stick to it. Don’t give up too quickly, because prevention is also a long-term gain. But it’s important that we play it.

Dean Richardson: Thanks so much for your insights today, Onno. So, you’ve shown us why prevention is no longer just a value-add feature, but is a critical path to maintaining relevance and competitive advantage in an insurance industry facing rapid disruption, and also why the insurance sector must fundamentally rethink its purpose and value proposition for the decades ahead. For 400 years, insurers’ primary purpose was that in the event of a loss, they put the insurer back in the position they had before they encountered that loss. So your car was in an accident, then they [had] to repair it. The house was flooded due to a water leak. Then they repaired or replaced the damaged items. We’re now moving to a prevent or mitigate model, which is the holy grail for insurance.

And whilst we’re not there yet across all lines of business, we are making sizable inroads into the journey.

To our listeners, as always, thank you for joining us. We have so much more exciting content planned and we’d love to hear from you. Connect with us on social media. Share your feedback, and don’t forget to subscribe to the podcast so you never miss an exciting and insightful episode. Until next time, this is Sapiens Insurance 360. Thanks for listening.