** Inspired by an article published by Novidea

The $465 million contract extension by Lloyds of London with DXC Technology to modernize the insurance company's IT systems is yet another chapter in the lengthening goal to move from analogue to bionic. It also shows how some organisations have found it hard to get transformation right. 

A major reason is that technology is only a piece of the transformation jigsaw. In the current edition of the Harvard Business Review is a timely article "Developing a Digital Mindset" from which I take this extract: -

"In a digital transformation, the two dimensions combine to produce the four quadrants of a matrix of responses: oppressed, frustrated, indifferent, and inspired. In the best-case scenario, people will be in the top right quadrant, inspired by the change and believing that they have the capacity to learn digital content. Managers should assess which quadrant each of their team members falls into and then work to move individuals from one to another as needed."

This is as true for insurers as brokers mind you. 

The matrix above reminds me of my own experience in the digital transformation of reservations at a global hotel group which was loosing considerable revenue and margin to online travel agents. Why? Because it was so much easier for customers to find and book the right rooms and events facilities in the digitally mature customer experience and journeys. Plus they often got a better price!

It took over a year to get buy-in across the whole organisation that digital transformation was not only important but vital for growth. The chairman and CEO demanded that every leader across 5 continents was behind the business plan, the strategy, the execution plan and, vitally,  would cough up money from business unit budgets to fund the project.

Not just CAPEX but OPEX across 5 years. And the C-Suite demanded an economically attractive  ROI!

Many transformation projects fail because they do not have this buy-in from business unit heads, operations, central and local IT, legal and marketing, fraud and underwriting. Silo islands in oceans of misunderstanding, different motivations, different priorities, resistance to change and fear of automation and technology. Probably scars from previous major IT projects like those experienced in London Markets which deal with very complex and differing relationships.

Such a wide range of products, services, market niches and geographies covered with varying layers of delegated authority. Each group of people within each brokers and MGA with their own motivations, technologies and appetite for innovation never mind Lloyds itself.

Think of the adoption matrix above and the buy-in factor is so much more challenging. 

"I cannot believe in 'market buy-in' when individual MAs, Companies and Brokers (cannot) convince their management boards to invest their own cash into an initiative. Investment by associations is not the same as cash committed from individual organisations to demonstrate true commitment to the successful adoption of a new way of working". 

Max Pell Exec Board Member Fennech Financial Limited

Again- a hard-learnt lesson from my digital transformation days at Hilton International. You only really learnt how much buy-in you got when the participants agreed to pay from their own budgets. Real skin in the game.

Get the strategy right and the buy-in from across the enterprise and you at least make the likelihood of transformational success higher. 

The Bionic Broker
"While other brokers toil away for hours rekeying data, checking errors, and carrying around paper files, the Bionic Broker is boosting customer service and streamlining admin, smashing new business targets with instant access to data to cross- and up-sell to clients, and trading online from anywhere anytime using cloud-based technology.

Clients and underwriters love the Bionic Broker, but what about the old school, legacy brokers? Sadly, they are going the way of the dinosaurs as the number of M&As continues to rise. Times were good, but it’s time to move on, and those that don’t embrace new technology are going to be left behind.

Forward-thinking brokers, such as Marsh, HIBL, Howden, and SRG, are embracing change and going bionic."

Novidea 23rd May 2022

With support from Coretech partners like Novidea, Genasys, EIS, ICE  these brokers, MGAs, coverholders, US agents, and insurers too, are leveraging technology to win new business, deliver better client service, and drive down operational costs.

But make no mistake, getting commitment across all the parties involved takes time and this delays progress. The role of each party from retail and wholesale brokers in market through the large global enterprises like Howden to the capacity providers in, say, Lloyds involves so many layers.

Then which of those are 'Binder Brokers' with the capacity to underwrite. Any core technology platform has to deliver to all these market participants. If one carrier finds transformation challenging then the hurdles are ten times more difficult across London Markets. 

So only with the vision, strategy, clear communication and leadership provided from the CEO through all leaders can success be considered. Even then it demands stamina, incredible hard work and a capacity to learn from inevitable failures in some aspects of the project to arbitrate, improve and hurdle those failures to achieve success.

That has not been made easier by the combination of legacy systems, complex and inflexible core systems and the challenge to be able to start smaller and faster and still achieve the ultimate goal of the project. Too often, by the time the project is reaching an end point  it is obsolete. 

Such is the speed of customer behaviour change, increasing shocks to the world experienced from the pandemic to the war in Ukraine, to supply chain disruption and inflation that many technology platforms just cannot keep up.

It is one thing to have APIs and quite another to have the capabilities, resources, rich API libraries and ability to enable brokers and insurers to connect all the component parts of systems jigsaws essential to build ecosystems, deploy new UBI and embedded insurance products and services and the prevention services and products to anticipate and prevent risk.

No one technology partner delivers everything required. Once a new core technology platform is deployed there is invariably a search for a credible claims platform like RightIndem that caters for all lines of business- Personal Lines, Commercial & Speciality, Life. Claims is too complex a business , even plain personal lines never mind life and speciality, for even modern coretech platforms to deliver all the outcomes needed.

These claims platforms have to be able to "feed" the complex number of systems described in the London Markets scenario above. By feed I mean deliver data securely and even in real-time bi-directionally and multi-directionally with the various systems and platforms vital to manage complex markets with so many participants.

Insurers and brokers need digital claims platforms that integrate with legacy technology, core platforms like Guidewire and newer native cloud platforms like EIS, Genasys and ICE. Technology partners that can help whatever stage of digital maturity you are at today. 

Data-driven insurance platforms are what makes the Bionic Broker and Insurer possible, enabling them to manage the entire customer insurance journey, end-to-end, and drive growth across the entire insurance distribution lifecycle.

AI technology provides a 360-degree view of the customer and other stakeholders, enabling full integration between customer-facing policy front-office transactions and the middle- and back-office with straight through processing. This means that brokers can extract more value from their customer and policy data with actionable intelligence from any device, anywhere.

Today’s Bionic Brokers also love the fact that native-cloud platforms enable them to turn data into insights, enabling better-informed decisions and delivering greater value through the selling of new products and services tailored to each customer’s individual needs. That's not to say that legacy technology and complex insurance core systems will inhibit success. My transformation task at Hilton had good old mainframes at the core of global reservations and we still delivered a world-beating digital customer experience and journey for business and leisure customers. Get the plan right, the buy-in and the ability to execute the strategy and you can leapfrog technical debt.

But never loose sight of the human connection.

"In insurance, human interaction is still the lifeblood of business. Even as technology evolves further, face-to-face connections will continue to be the vital element to seal the deal, especially for large and complex risks – just the way it should be. And that’s why this hybrid Bionic model is the future for broking and insurance."


Further Reading

Insurers, competitors, transformation and digital maturity 

Creating value, finding focus and choosing the right technology partners

The Future of Auto Insurance- Connected: Embedded: Subscribed

Genasys Partners with Simplyhealth and esure with EIS in a sign of the times for core technology 

Everyone wants to be a beautiful butterfly