Customer needs are constantly evolving, and it has never been more important for re/insurers to be innovative in how they engage with clients and customers.
Lockdown has accelerated the need to embrace digital solutions, which has brought greater speed and efficiency to the re/insurance process, according to Karen Stanford, operations and transformation lead at London-based professional services firm GreenKite Associates.
“Now is the time to start accelerating digital strategies,” Stanford said.
“Consider companies such as Whitespace and PPL—since lockdown, adoption of their platforms has accelerated rapidly, and other startups, such as Riskbook, are also getting a lot of traction at the moment.
“Everyone understands the need to implement effective digital strategies, but one of the challenges is whether re/insurers can quickly adapt their business and operational models and their change programmes to take advantage of the situation.”
Another challenge faced by the industry is the relationship between companies and their IT teams.
“We’re in an environment where we still have diversity in business leaders: some embrace technology, but some find technology challenging,” said Stanford.
“The sophistication of the relationship between the business and the IT team varies from organisation to organisation—those with IT and digital departments who support business leaders to understand what is possible and act as true enablers of the business to help it drive forward to achieve technology change will thrive in this environment.”
“The business and IT both need the vision to innovate and to be not afraid to get things wrong.” Karen Stanford, GreenKite AssociatesCommunication
When it comes to working with technology companies on new solutions, communication between the firm and the technology partner is vital.
“Tech companies know their technology inside out, but as a change and IT professional you have to be able to bridge the gap between their technology and the business problem you are trying to solve,” said Stanford.
To do that effectively, she said, there needs to be a clear articulation of the problem. The parties need a transparent and open relationship which is focused on delivering the right outcome for the client.
This is an important point because often businesses are so focused on obtaining a ready-made solution that they fail to see the value in collaborative development that allows mistakes to be made, lessons to be learned and problems solved by the respective partners.
“Tech has been blamed for non-delivery in the past and is probably not always seen as a true partner,” said Stanford.
“The business and IT both need the vision to innovate and to be not afraid to get things wrong.
“One of the biggest hurdles I see in insurance is that everyone wants everything signed, sealed and delivered before work starts and to know the technology is going to deliver, so the opportunity to fail and revise your approach doesn’t really happen.
“That’s where the digital lab environment comes into its own.
“Not everyone has that test and learn environment, so we need to be doing more work across the insurance market to ensure digital learning innovation and evolution happens.”
“We must have the right level of integration to be able to make better business decisions.”The right solution
The ability to collaborate successfully is also important when it comes to choosing a vendor.
With so many to choose from, Stanford believes it is vital to look for opportunities for true partnerships.
“IT is a significant investment so we should want long-term relationships. It’s not just a question of what’s the best product—it’s about who you can work with,” she said.
“I don’t think people give enough weighting during the vendor selection process to who is going to be the right long-term partner. Vendors are starting to recognise this problem and we are finding that a lot of vendors are bringing us into discussions as business experts to help bridge the gap.”
It is equally important to ensure the solution you choose is truly what your business needs, Stanford added.
“Many times, I have been in rooms with people looking at the latest technology. Everyone thinks they need it and when you see the demos it’s brilliant and you feel it will make a big difference to your organisation, but people often leap into buying without really thinking.
“They need to consider what problem they are trying to solve, what is the outcome they wish to achieve, how it will be used across their business and ultimately whether their clients actually want it.”
She added that it is important to remember that however impressive and innovative an insurtech may be, they may lack key insights into the finer workings of a re/insurance company.
“Insurtechs are innovative, disruptive and they think differently,” she said. “They are really good at what they do but they don’t necessarily have the insurance knowledge and background, along with some of the very detailed information that sits within every re/insurance organisation in the London Market.
“If you combine the brilliance of an insurtech together with real expert re/insurance knowledge, you can make real gains and differentiate yourself within the market, but both parties need to be aware of the other’s expertise and what they bring to the table and have the right kind of culture to work together.”
It is wise also to give consideration to the less glamorous back-office processes as well as your impressive new quote and bind system, for example.
“If you’ve got poor processes with incorrect data going from one system to another it can cause a lot of pain in an organisation whose business is making risk decisions based on available data,” said Stanford.
“Data is a major asset and should be a differentiator—businesses want timely, accurate and complete data. We must have the right level of integration to be able to make better business decisions.
“Anything that makes your data journey quicker and easier should be invested in,” she concluded.
GreenKite Associates, COVID-19, Insurance, Reinsurance, Karen Stanford, UK