How to deliver Insurance and Claims Technology Innovation

In world of changing digital priorities for CIOs, many IT leaders are asking themselves: “how can I make strategy happen?” The next question to ask is how am I going to align my responsibilities and the demands on my team with the needs of the business?

Taking the second question it must be a real worry to CIOs that, according to the latest Harvey Nash survey, 55% of organisations rate their IT/business alignment moderate or worse. That is simply an unacceptable statistic in a business world that is demanding constant innovation from its IT leadership where Blockchain, Artificial Intelligence, market wide initiatives such as the Lloyd’s Target Operating Model, data capture, machine learning, and IOT are forcing CIOs to think outside the IT box.

If you read the survey closely it soon becomes clear the successful CIOs will favour customer/revenue growth over inward-facing activities. At the same time an acting or dedicated CDO can make organisations more effective at leveraging customer data.

Despite the challenges facing modern day CIOs 78% are either quite or
very fulfilled in their jobs so these are exciting times, clearly. Who wouldn’t be excited in an environment in which new Blockchain technology presents an opportunity to bring in distributed ledger technology which has the potential to positively transform accounting or claims departments in insurance companies, for example?

69% of CIOs therefore expect to implement intelligent automation within IT and 60% within customer support. So it seems an intelligent CIO – and let’s face it, you know you are! – will be exploring the plethora of technology options that are opening up new worlds of IT exploration. The statistics bear out the exciting possibilities for radical transformation inherent in technology protocols.

CIOs anticipate 6 times more investment in virtual reality, 5 times more in Blockchain and 2.5 more times in robotic process automation.

When I attended last year’s Monte Carlo Reinsurance Rendezvous I was encouraged to learn that the potential for technology to disrupt the traditional insurance business model was a hot topic for reinsurance leaders. As I wrote in a blog following the conference, Blockchain technology, for example, took a step forward in the consciousness of the insurance market with the announcement of the (re)insurance B3i initiative that was unveiled at the event.

The resilience aspect of Blockchain is very interesting because transactional data is now backed up potentially hundreds or even thousands of times at different locations not only in London but Singapore, India, the US or where other people are participating in the blockchain in that market.

B3i is an initiative of 15 members of the insurance industry, launched in October 2016 to explore the potential use of the distributed ledger technology and develop common standards for the industry. Members are Achmea, Aegon, Ageas, Allianz, Generali, Hannover Re, Liberty Mutual, Munich Re, RGA, SCOR, Sompo Japan Nipponkoa Insurance, Swiss Re, Tokio Marine Holdings, XL Catlin and Zurich Insurance Group.

So it seems Blockchain is very much on the technology menu for the discerning IT leader.

XL Catlin, meanwhile, said at the time that reinsurance growth remains challenging, so innovation will remain a critical topic. According to XL Catlin: “InsureTech is making us all sit up and pay attention. At XL Catlin, we have invested heavily in the future. For example, we have set up XL Innovate, an XL Group-sponsored venture-capital initiative, which invests in early stage industry innovators.”

Last month also saw the launch of the London Market Group’s campaign to build awareness of the need to modernise the (re)insurance market. In this environment it is especially encouraging to note that Structured Data Capture (SDC) is also making strong progress and almost 80 carriers have engaged so far with the service. It enables data from documents such as Market Reform Contracts (MRCs) and binding authorities to be extracted automatically, transferred to underwriters’ systems, and then re-used many times.

Through integration with PPL, it brings the market one step closer to straight-through processing. The LMG reportedly built this service in close collaboration with the market and ensured it delivered what the business teams asked for – on time and on budget.

The LMG Target Operating Model does seem to be gaining real traction despite initial cynicism so it’s great to see the market coming together in this way.

Teamwork will be essential to success at a market-wide level as well as at a business level where individual Managing Agents IT teams need to work with the business as well as flexible co-sourcing partner such as Fifth Step. I have had hundreds of conversations with IT leaders, CEOs, claims people, accounting teams, underwriters and brokers this year and all are agreed on one thing, we all need to come together.

I will conclude this latest blog by quoting the latest issue of TOM News Bites:

“We are all interwoven, and we all want the London Market to be the best (re)insurance market in the world – for our customers and for the firms that exist within it. We are so close now but success will only come when we have joined up the dots across the whole value proposition and we must keep going until we have achieved what we set out to do three years ago.”

Those were the words of Lloyd’s COO Shirine Khoury-Haq and I am sure I am not alone in saying: “Amen to that!”