How the insurance industry can embrace new technology

The first day at SIRC finished with a panel discussion on how technology is changing the industry.

The session was moderated by Victor Kuk, head of client markets for P&C reinsurance business in Southeast Asia, India, Korea, Hong Kong and Taiwan for Swiss Re, who was joined by his colleague Pravina Ladva, the company’s group digital transformation officer. Joining them on screen were David Lynch, group chief technology officer of bolttech, and Olivier Michel, chief executive officer and founder of Ancileo.

The first question was an easy one: how do you see technology advancing the industry?

Ladva replied: “If we think of our own experience in the last two years, we have been buying products and interacting with others in a way that we would never have dreamed of before. That’s been driving online behaviour, and now consumers are demanding from us the same clarity and experience with their business.

“They want a simple, intuitive, and clear journey in how they interact with us. That’s where we can bring in technology.”

But digital transformation is not easy, nor can it be done overnight. The panel were asked for the best practice on how to be successful.

“One of my former employers—DBS Bank—is a case study in digital transformation,” said Lynch. “The key learnings from that were that although they were a traditional bank when I joined, there was crystal-clear alignment all the way through around the key drivers for transformation. It was very holistic.”

Lynch went on: “We know that the insurance industry is somewhere behind banking. The key learning we had at DBS was that other banks felt that digital transformation was moving customers to a digital front end that replicated everything that a bank would deliver. DBS, instead, took an end-to-end view of the digital transformation.

“It wasn’t just about the front end, but also about making sure there was no unnecessary human or analogue intervention in the process. Sequencing was also a vital element.”

Ladva added that one element of digital transformation was for insurance companies to choose wisely who they partner with. “One of the core ingredients is who to link up with. That’s a core tenet of digital transformation—how to create relationships that could accelerate that. Some stats yesterday said the last quarter set a record for insurtech investments. If you think about that, there’s a lot of new companies with new insights.

“Combine them with a longstanding organisation such as Swiss Re, and think of the tools and techniques that could come about if we partner together,” she said.

The final thing, Lynch said, was culture. “If the culture of the organisation is not adopting or accepting a modification in how to do their work, one of the biggest inhibitors is that you get a lot of resistance as you work your way along.”

The internal workings of an organisation was a theme picked up by Michel. Asked directly what should be done to ensure a successful digital transformation, he took a step back and said that organisations should be looking not only at their internal staff, but at how those staff are treated.

“The most-important factor is the people managing the programmes. We make a big fuss of technology, but we need to focus on the people. What I’ve seen from working with multiple insurers is that the people in those organisations are among the smartest you'll meet, but what’s lacking is the willingness to take risks,” Michel said.

“The insurance industry is risk-averse, and has had a culture and tradition of risk avoidance. When your entire organisation is formatted that way, you create teams who can identify a problem, and know how to solve it, but are then reticent when it comes to making decisions. They have careers to manage and don’t want to make a mistake.”

He concluded: “The most important thing is to create a culture where failure is allowed and not punished. The companies that have been the most successful at digital transformation have always been the ones who were willing to try things.”