In the first of a new series of features, Insurance-Edge speaks to those who are transforming the insurance industry. From Artificial Intelligence to advanced telematics, sharing economy PAYG cover to streamlined claims handling, there are hundreds of companies and entrepreneurs investing time, and money, in building the future.
We spoke with Dan White, Senior Partner at Ninety Consulting, who work with a wide range of insurance and insurtech companies. Ninety can help an insurer take an idea from the concept stage, to market launch in just 60 days.
Yes, 60 days – can your company do that?
IE: Dan, tell us a bit about Ninety; who you’ve been working with, and how it’s changed those companies.
DW: I guess Ninety Consulting is about making a difference. We are a social enterprise, which means we invest 90 percent of our profits into charitable projects, particularly in developing countries. As regards company projects what we do is take the techniques, the tools, the mindset of Silicon Valley and apply them to the insurance sector. We mainly work direct with big insurers, but sometimes with partners or specialist companies.
Right now we are doing some really cool stuff on the Internet of Things, one is a pilot scheme in Personal Lines, and another is in Commercial Lines looking at ancillary services for commercial landlords. It’s about commercial insurers getting into property maintenance, so basically augmenting their policyholder services in a variety of ways. Another exciting development is the health sector, in particular how wearables and AI can be used more effectively.
IE: Large multi-nationals can be slow to adapt and change sometimes, give us an example of how Ninety make an impact with a big company.
DW: OK, with Allianz we are helping them build an eco-system. So what does that mean? Well it’s about bringing policyholders together in a sort of community, where those customers are getting value from operating as a group. The insurer facilitates and nurtures that eco-system, using insurtech to accelerate that process. The thing about bigger companies is that although they totally get on board with our core message – taking ideas to market in 60 days – they also want us to help them become true innovators. There’s much more to it than bringing a new service to market.
IE: How does that innovation culture develop?
DW: In specific terms that comes down to a set of business culture interventions; training and coaching, audit and benchmarking tools, entrepreneurial profiling etc. For example with RSA we looked at an international company which was trying to solve innovation challenges separately. The question was, `How can we bring that process closer together?’ The answer is that we help RSA identify a common set of innovation goals and a way of bringing those teams together.
Insurers always have good people working for them, it’s about finding them and giving them the tools to develop new models, new ways. The smaller-to-medium sized insurance companies tend to be better at innovating than big companies, more agile, but there’s no reason why a large global company cannot bring new ideas to fruition very quickly, and effectively.
IE: Do start-ups always have an advantage though, in terms of speed?
DW: Yes, but you can enable large companies to behave like start-ups. A new company has less money, and that scarcity of resources drives focus. You either fail fast, or start something that brings in money very quickly. The same philosophy can empower bigger companies.
The Zurich Innovation Foundry for example pulls together a lot of ideas and methods that we try to promote. It’s been a big project for us to set up new processes, essentially be an architect for it. The idea is not to set up the Innovation Foundry as a separate thing – a standalone unit – but to make the Foundry the benchmark process for the entire company. So everyone is potentially an innovator. The way that special insurtech labs, or in-house schemes can fail sometimes is that it becomes a case of the `cool kids in the basement’ and everyone else feels excluded from that process, as if they’re the dull relatives. But the truth is that the `dull’ people actually have all the money, so you have to include them, at every step of the way.
IE: How does that process work, throughout a company?
DW: It’s simple. Anyone can come into the `basement.’ Prototypes are built and tested, ideas are challenged and the innovation are in every corner of Zurich; actuarial, distribution, marketing, broker relationships, customer focus, niche products – the works.
The Innovation Foundry isn’t a place, it’s a philosophy, a way of working. Zurich UK probably have about 100 innovation advocates, at all levels, who spur everything on, act as disruptors in their departments.
IE: The old model of someone in Product Development doing a Slideshare, Q&A, and then approving a new idea is being thrown out of the window?
DW: Absolutely. It’s about changing cultures within companies, plus you need to respond to market demands and customer feedback too. There has to be a place for customers in this process, because you need the feedback from them when you’re forging new ideas and testing them before bringing them to market.
IE: Do you ever source customers from Twitter or Facebook – plenty of people online have strong views on insurers?
DW: We tend to use agencies to identify typical customers, rather than use social media to bring in consumers directly, although I quite like that idea. We have a tool that tracks the number of interactions between customers and companies. So the average number of touch points in a motor claims cycle is 22 contacts. That is a high number, with a great potential for problems too because most of those are painful.
If you can be pro-active and keep customers informed at every stage of the claim, they actually like it – there isn’t a complaint of information overload. By reducing the volumes of touchpoints, especially those initiated by the customer, you get better consumer satisfaction.
IE: How can insurers respond to new online competitors?
DW: Reality check; you’re going to be disrupted in any event, it’s inevitable. The best way to cope with potential rivals is to constantly innovate and adapt, because that way your company isn’t leaving the door open on new products or services.
Two conversations I had recently with insurance CEOs sum up the different attitudes; one said `all this innovation stuff is crap, a waste of money, no evidence that it will succeed.’ The other said `I know I can increase the value of the company, the share price, and survive if we innovate.’ Unsurprisingly the more positive comment is from the smaller, medium sized company.
Investors in the insurance market are looking for evidence of disruption too, so if you want to grow even bigger, then you need the right partnerships, so I would guess that Tencent from China have chosen Aviva for a particular set of reasons – they’ve done their homework.
IE: People keep mentioning Amazon, do you see it happening – will they enter the insurance market as a brand?
DW: The rumours keep circulating, but I’m a bit sceptical. Look, it could happen but my message to insurers is that what’s important is self-disrupting, behaving like start-ups, becoming better at changing your business to making as fit as possible. If you give Amazon room then they will walk in and take some market share away, but if you think like Amazon and constantly refine and develop your online offering then they don’t have the opportunity. You do.