Paul Mang: Addressing big, evolving insurance risks is ‘meaningful work’

For Paul Mang, chief innovation officer at software company Guidewire, the role the insurance industry plays in the wider economy ”is important for society” and ”meaningful” because it focuses around ”addressing some big risks”.

Due to his academic background –  Mang was assistant professor of strategic management at The University of Texas at Austin in the 90s and has always been interested in the motivation and meaning of work.

Speaking exclusively to Insurance Times, Mang says: “I spend a lot of time with people on my team to frame up what we are doing. I see us [as] doing something meaningful as the world is addressing some big risks.

“I think of this as important work - what [the insurance industry is] doing collectively is important for society.”

The fact that risks continue to evolve makes the role of the insurance industry even more apparent.

One example of a constantly evolving risk is cyber and the use of technology. This area has escalated post-pandemic, with new technologies opening up potential - and previously unconsidered - exposures.

Mang notes that new business models, such as hybrid working, have led to a greater reliance on technology and presented different ways of thinking about supply chains.

He adds: “Post-pandemic, as we rethink business models, we should create them with an eye towards resiliency – where you ask questions such as ’what else could happen?’ [or] ’what could have been different?

“As we create new models, we put ourselves in jeopardy.

“The world has changed and the insurance sector has followed – it’s just the natural evolution. 

“We must guard against being too slow in letting the interest on risk management and transfer get so far out that the demands are different than where we were before.”

Better understanding

To cater to the increased focus around cyber risks, Guidewire expanded its partnership with American credit rating agency S&P Global Ratings in November 2021, to better understand cyber events and the resultant impact of these events on businesses.

“We are quite optimistic about investing in capabilities to better understand data governance and security because it’s embedded in so much of modern life,” Mang says.

He gave the example of using a phone to turn on the heating or lights.

“That’s just part of what I think we are doing at Guidewire – investing on behalf of the industry to better understand what these exposures are and what could possibly go wrong,” he adds.

Defining a company

For Mang, how companies define themselves has also shifted, which impacts on a business’ risk profile and how the insurance industry should treat these firms.

“It used to be simple to define what a company was,” he says.

However, businesses today can be fully or semi virtual. This could include, for example, a firm with no physical office premises that has networks outside the app the company exists on.

“It may be because our perception of a company is a legal [or physical] entity, but we are moving slowly to a place where the company is a much larger ecosystem,” he explains.

Mang believes the insurance industry will evolve to meet these new company definitions and operations.

He says: “The terms ‘platform’ and ‘ecosystems’ are used more and more for businesses – the insurance industry must think of that. The unit of analysis is no longer what we thought it was for a company many years ago.

”The Covid-19 pandemic and the Russia-Ukraine war has made it obvious that supply chains can get disrupted.”