It’s time to drive greater operational excellence in commercial lines

“There’s a danger that we are distracted by generative artificial intelligence (gen-AI), when there’s a lot of other technology that could add more value and have a more direct impact on our industry.

“We’re seeing technological advances in AI, so there’s a huge amount of things that could be opportunity or could equally be noise. At the same time we’re probably going to start to see a bit more commercial pressure on expenses coming through. How can we make the most of that and navigate that environment?”

These are the views of Carys Lawton-Bryce, chief operating officer at  Markel, as she discussed the opportunities and imperatives for driving operational excellence in commercial lines ahead of speaking at the  Intelligent Insurer  Commercial Lines Europe event in London, on October 4.

In an interview ahead of her conference session, Lawton-Bryce said that this period of ongoing technological innovation in the re/insurance industry, combined with a commercial lines market close to being at its peak, is creating an imperative for leaders to push for greater operational excellence.

“We’re expecting that rates will start to fall, and that always creates pressure on expenses.”

Accelerated tech developments, epitomised by the furore around gen-AI, are interesting, she agreed. However, she said: “There’s a great deal that we haven’t exploited in terms of other forms of AI, not just gen-AI.”

Excitement about gen-AI’s possibilities might be palpable but for the insurance industry some of the machine learning, algorithmic-type AI processes still have huge potential, Lawton-Bryce said.

“Markel is investing very heavily in its underwriting capability at the moment because this is vital given the current state of the market,” she added. Investment in analytics is another area of focus as well as any tech advances that support and improve customer experience.

She explained that a lot of the work Markel is doing is about getting tools and data into the hands of the right people—those who are making the decisions.

“They are empowered to use that data, rather than having very clever algorithms doing things that only a small group of people understand. It’s very important for us when we’re investing in these things that we’re getting the use out of them. We’re not playing with the newest latest tech just for the sake of it.”

As a global business, Markel is navigating the multi-regional challenges and opportunities that such tech brings with it. A key point for Lawton-Bryce is how to balance a desire for scale with solutions that work well in different geographies as well as recognising that people need their independence.

“We want them to be able to build businesses that work for them in their local markets.”

Tackling distribution chain expenses

Technology is not a silver bullet, but advances can be leveraged to speed up the identification and management of the biggest challenge in commercial lines: expense drivers. For Markel the potential of this is of particular interest for the distribution chain.

“We’re trying to drive efficiency across the whole distribution chain, but those actions are truly effective only if the brokers are on board. How we work across the chain is fundamentally quite a big challenge,” Lawton-Bryce said.

A key part of the challenge centres on how the data is being shared and ensuring consistency of data standards.

In response to this, Markel has specific partnerships and brokers with which it works closely. Building up those relationships is crucial, but getting tech and operations people talking is also important, she explained.

“If you’re navigating through relationship managers and underwriters and placing brokers then you’re probably never getting there. You need to get those people talking to each other and collaborating at those levels.”

Lawton-Bryce advocates an element of “test and learn”, and the ability to pivot when it’s not working the way you want it to. “This is an area where we probably need to engage a bit more with each other, try a few things, and then learn from what’s working.”

Advances in standardisation

Data is one area of commercial lines that is benefiting from faster innovation, Lawton-Bryce said, explaining that there are ways of doing things now that weren’t possible before.

“We’ve all been trying to agree on data standards, particularly in the London Market, and how to get data moving around in a way that works more efficiently.

“There’s now a whole area of tech that is better at taking lots of different forms of data and standardising it. The question is: where does that create an opportunity for us to move faster and cut through some of those problems in terms of the ability to extract data out of text documents?

“It’s in a different league now from where it was a couple of years ago,” she said.

With many challenges and opportunities for leaders to chew over ahead of her conference session, Lawton-Bryce said a key message for leaders to consider is that operational strategy needs to be aligned to business strategy.

“How we make sure that our operational structures deliver the right business outcomes is essential for driving operational excellence in commercial lines,” she said.

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