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Talented Leadership is the Key to Digital Innovation in the Insurance Industry

By Jason Little, SVP of Digital, Architecture & IT Strategy, QBE Emerging Markets

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Jason Little, SVP of Digital, Architecture & IT Strategy, QBE Emerging Markets

If I cast my mind back to 1999, I was a COBOL programmer working on the year 2000 bug. It was a time before Facebook, smartphones and Apps. But while we may have averted the year 2000 bug, the digital age is dramatically changing nearly every business model. Many insurers are still writing COBOL on their 1970’s mainframes and are unprepared to meet the new norm in consumer expectations.

The new Tech Leader is a valued member of the business executive and runs IT as a business.  With digital technology such a critical enabler of profitable growth they must be conversant in both technology and the running of the business. Change is the new irreversible constant so they must be agile in mind and practice. They are an expert in service management and remote collaboration to optimize the value of outsourcing, cloud and distributed delivery. The new Tech Leader is not only strongly networked, in the traditional sense, but also leverages digital and social channels to engage both within and without the organization.

Encouraging a culture of innovation within an organization, function or project team involves three basic leadership principles: (1) establishing a shared goal, (2) encouraging open communication & collaboration, and then (3) empowering staff to act within this agreed framework. Innovation should come organically in what we do day-to-day not just special projects. Command-and-control style leadership hinders creativity, engagement and ownership

Delivering the Game-changer in the Insurance Industry

The challenge for insurance carriers is evolving consumer interactions and perceptions beyond a once a year grudge purchase to a series of continuous value add interactions that both position the insurer as a trusted advisor and delight the customer.

As to how this is achieved, it involves a comprehensive Digital Strategy and technology enablers such as: mobile, responsive web, customer analytics, the Internet of Things, intelligent business process management, as well as social and cloud based technologies.The game-changer for the insurance industry will be striking the right balance between agile digital innovation and an industrialized architecture, allowing IT to work at two speeds.

"Smarter analytics will continue to play a major role in both insurer productivity and growth through strategies such as cross & up-sell, fraud, supplier optimization, sharper pricing and retention analytics"

While traditional analytics and business intelligence techniques are not new to insurers, as an industry, we are playing catch-up to leverage the full potential of big data and predictive analytics. The problem is most traditional BI techniques are based on hindsight or deductive analytics. The “big” opportunity is in applying inductive analytical techniques to identify patterns and produce foresight, big data technologies are an enabler of this approach.

Smarter analytics will continue to play a major role in both insurer productivity and growth through strategies such as cross & up-sell, fraud, supplier optimization, sharper pricing and retention analytics.

However, the largest opportunity will be enabled via big data technologies. Increasingly insurance carriers will have access to real-time sensor information from a customer’s body, car, home and environment, combined with both traditional customer data and social sentiment feeds. An analytics engine will be able to predict loss events just-in-time and proactively inform customers through their mobile devices to reduce the likelihood of claims. Additionally, rewarding the customer for proactive behaviorswill result in greater customer satisfaction and retention. Traditionally insurance has been an infrequent customer conversation; this will now position the insurer as a trusted advisor, differentiating the service offering and establish greater intimacy with the customer.

The Future Prospects of Internet of Thingsto the Insurance Industry

The Internet of Things promises an exciting potential for insurers to create more value for their customers. By gaining additional insights into the customer’s situation, preferences, behavior, sentiment and risk profile insurers will be positioned to provide ongoing value add services to their customers. This could take the form of claim prevention services (eg. weather & unsafe location alerts), rewards for proactive customer behaviors (eg. Fuel economy, healthy lifestyle) and usage based pricing.

Like mobile devices, sensors Bridge the divide between the physical and digital worlds creating a greater sense of intimacy with the customer.This is being realized in concepts such as:The smart house, which encompasses: sensors, monitoring and remote control of all aspects of the home. For example, in the event of a water leak, the homeowner can be notified via a mobile app, and the water can be remotely shut off, helping to prevent flood damage.

Biometric monitoring devices range from the fit-bit to ingestible sensors. The physiological and behavioral metrics collected are relayed to a mobile app, accessible by the wearer, caregivers and health providers.Telematics already used for pay-as-you-drive pricing, is evolving into the smart or driverless car and drones used for such things as remote catastrophe assessment.

Smart cities are the broader progression based on the principle of information and data exchange between different city services. For example, the sharing of real-time traffic information, combined with telematics and inventory data is revolutionizing dynamic delivery logistics. This can be applied to such applications as the tracking of Marine Cargo shipments.

Globally insurance carriers will be investing in these points of differentiation, particularly in personal lines, and looking to determine solution partners who can best service their customers and integrate into their existing IT ecosystems.For the consumer, rewards and value-add will need to compensate for allowing the insurer access to their private information.

Insurers will need to navigate the product, legal and liability implications of smart machines, incorporatingnew roles and analytical techniques into the organization and partnering with the right experts to understand the technology. Ensuring that there is strong collaboration between big data, traditional BI, network and security teams to anticipate the changes this technology will bring. For example, optimization of network connectivity for big data services, particularly where cloud is involved, leading to further security and privacy considerations. Data governance policies will also need to adjust to adopt trust over truth principles over data where the organization has minimal control.

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