​Insurance transformation and the challenges it faces [Podcast]

27th Nov, 2018

The event season is in full swing for the Netcall team as this month sees us out at several locations, covering a range of industries and topics. This episode of CX Appeal was recorded at a Breakfast briefing held for Insurance professionals on the topic of business transformation. Louise Wright was joined by Roger Oldham, founder of The London Market Forums, fresh from the briefing to discuss the key highlights from day.

The briefing included talks from Professor Roger Maull of Exeter University and Paul Bermingham of Advent Insurance Management. The event closed with some lively debate around what the future looks like if the market can overcome the barriers to embracing change and transformation.

The session started with a talk from Professor Roger Maull, who focused on McKinsey’s three horizons model and is a specialist in transformation. For the event we put together a handy postcard outlining how to apply the McKinsey three horizons model, you can download your own version here.

On the move? You can listen the interview in full here via the CX Appeal podcast.

What was your take on how you felt the audience received the McKinsey model?

The audience was quite mixed, with a variety of experience. Some of the audience were familiar with some aspects of the McKinsey model, it was new to others and they will have found it interesting. What they are probably doing is positioning themselves and finding out where they fit in, as everyone is on a different stage on evolution of their transformation journey.

Paul Bermingham from Advent Insurance Management followed up on Professor Maull’s presentation, really putting theory into practice. There was a lot of talk in the room around legacy technology and people being scared of legacy technology. What was your take on that?

The market is struggling with legacy in a variety of ways. People treat legacy in different ways. Some are retaining legacy and finding best way to deal with it in-house with the use of technology and aspects of RPA (Robotic Process Automation). Others are zipping it up in a bag and outsourcing to specialist companies to enable them to focus on the future, not worry about the past. Supporting legacy business is a real challenge in this market. It’s consumed a lot of time, energy and working capital.

The sector is conservative but it’s a surprised to hear some household names are holding back decision making as they are frightened about moving away from legacy technology. It was interesting to hear from Paul how people are bridging the gap between old and new. What does this mean for customer experience?

The whole question around customer experience is quite a tricky and challenging one for the Lloyds and London Insurance Market. There’s some debate as to who the client is. Often it’s a broker model so companies like Hiscox, Amlin and Beazley comes through the broker network. But on the whole, business comes through the broker network (95%) some of those carriers consider the broker to be the client. “The consumer” is the insured and might be based in the US, so is three or four steps removed. So comes through agencies before it comes to a broker in London. So there is a long chain, understanding what your company wants and then designing a solution that fits that, is a complex challenge and customer journey. Remember this is a B2B type relationship. B2C is much easier.

We did start to touch on the customer becomes anyone touched by the process or a user of the system/process. Some interesting debates there. You’ve been in the market for a long time can you expand on your background?

You are making me feel really old now! I’ve been in the insurance market for 32 years now, I joined when I was very young and spent 20+ years working with AON and travelling the world and seeing various ways of working and meeting all sorts of people. I specialised in construction and engineering. Which meant one minute I was visiting tunnels in Hong Kong. The next I was on an oil rig on the Gulf of Mexico. I never really knew where the journey was going to take me. I then became Head of Claims for AON and eventually became COO in various firms around the industry. Now I mediate insurance disputes between large commercial parties around the world.

What changes have you seen over the years?

Changes seen are around the working environment. Probably, in all honesty, there hasn’t been the change in this particular market place, because there is no burning platform to force that change to happen. You haven’t had that customer driving it. What you do have, is people primarily looking at your market, people investing in your market or business (particularly internationally in the insurance market) especially over the last five years. Those international investors look at margins, how they way we are working. London has the highest cost of operation of any insurance market in the world. We need to reduce operating costs considerably and improve upon our margins.

The psychology of change came up earlier as an interesting point as to what are the barriers to making change happen. It isn’t just about the technology or people, it is many factors coming together.

The market is doing a lot, both at company and central market level, to drive the adoption of technology. On all the Executive groups we run, technology is not really an issue for leaders they are willing to embrace technology. They are leaders of change whose job it is to implement technology. The challenge is around the people. Working in a broking house or an underwriting firm, they run ‘books of business’. The broker is a powerful person in the organisation and you need to be able to demonstrate the value of change in working and that you are not going to disrupt their working habits, workforce or client base and they are naturally protective. Then the CEO also agrees they don’t want to upset the broker or the potential revenue being brought in. It is slightly different to other industries I have had exposure too. For example Investment Banking, where if someone says at C-Level say something is going to happen, then it does happen. Insurance is more of a community consultative approach – there are benefits to this as it encourages commercial enterprise and entrepreneurial ship but also barrier to change as it restricts pace of chance.

What are your predictions based on the conversations we have heard today?

I predict a sea-change in attitude. Even the most ‘luddite’ of individual, understands the power technology can bring, they understand the need to change working practices to provide a better service to their client. Everybody that works in our industry cares about the relationship. They will do what they can to make these client relationships better. People will go out of their way to make that happen and we will see an acceleration in change. There is a central project (LM Tom project) which has driven change, it has a huge budget behind it of around £300m and all companies in the market are paying into the project. It’s helped to make significant changes over the last 5 years.

On a final note, where’s your favourite place you’ve been lucky enough to travel to?

Two different places. From a working perspective I think Hong Kong is one of the most exciting places to work – extremely vibrant, with a buzz around it. It’s the complete opposite to the London Insurance Markets but has a real buzz in the city and way of life. When I am not working, somewhere like Hawaii. It takes a long time to get there, but is a place of absolute beauty and diversity. I have friends that live there, so I try to get there whenever I can.

This Insurance Breakfast Briefing was hosted by The London Market Forums, for more information about please visit www.lmforums.com. MatsSoft, part of the Netcall group of companies, sponsored the event.

Learn more about how our Low-code platform, MATS, is helping organisations to transformation their CX. Visit https://www.matssoft.com/sectors/insurance/ find out more.

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