Cyril Samovskiy, Founder at Mobilunity, argues that while AI lies at the heart of insurtech innovation, without the skilled hands of people to deftly pull the strings and orchestrate its transformative potential, efforts could be wasted.
Right now, the evolution of the insurance industry is being driven almost entirely by the adoption of new technology. Mirroring the shifts we’ve seen in the banking sector – particularly with the emergence of neobanks – it’s a transformation that’s defining a new ‘normal’ for how traditional insurance companies interact with clients.
Take the automation of processes that previously required significant human resources investment, for example. From automated underwriting and risk assessment to automated claims processing, this change alone – which accelerates processes and reduces the likelihood of errors – has elevated the competition among insurance market players to a predominantly technological level. We find ourselves asking: who has the best (most effective) technology behind the product? Who has the best (more effective) team behind the technology? And who adopts even better (more effective) newer technologies?
The result of this has led to an immense pressure to adapt. And, despite this being an industry historically known to be more cautious when it comes to transformation, we’re already seeing key players step up to the mark and initiatives designed to reimagine the future of insurance claims being rolled out.
AI at the heart, humans at the strings
For me, there are three main drivers boosting tech-driven initiatives in the insurtech space right now; user experience, the strategic possession and processing of data, and, of course, the integration of Artificial Intelligence (AI) and Machine Learning (ML).
Perhaps predictably so, it’s the latter of those three that’s at the heart of the lion’s share of such roll-outs right now, though data-driven applications and user experience intertwine in many of the ways in which AI is impacting the industry. Alongside automating and digitising various processes, these include:
· enhancing customer experiences with chatbots and virtual assistants
· detecting and preventing fraud through pattern recognition
· personalising insurance products and pricing based on individual data
· leveraging data analytics for strategic decision-making
· using predictive analytics for proactive risk management
· implementing telematics for usage-based insurance
· ensuring regulatory compliance through AI systems
While these all sound positive, with opportunity comes challenges. For a start, building effective AI systems is a substantial project, not easily undertaken, and the initial investment might not pay off immediately. It takes the right strategic approach and the right people in place, or there’s a real risk that the downfalls could far outweigh any benefits.
Put simply, tech upgrades are only as good as the people you have pulling the strings behind them, which means that for insurance businesses to truly succeed with their 2024 digital transformation projects, getting the right technical team in place is business-critical.
How to foster a skilled team to drive innovation
1. Establish roles across four specific domains: While specific roles will vary from one organisation to another, there are specific domains I recommend roles are established in when it comes to implementing digital transformation initiatives. These include:
· User experience (including User Interface Design)
· Data governance
· Data intelligence
· People innovation.
While the first three focus on making technology work seamlessly for the business, the latter ensures that technological transformation aligns with the company’s talent strategy, serving as a strategic function that orchestrates the entire life cycle of a team, internally and externally. It’s a function that incorporates expertise – whether sourced internally or externally – at specific stages or moments.
While the concept of People Innovation is perhaps a little alien compared to a conventional team set up, having someone in this domain will not only ensure the team’s configuration is in alignment with the current state and needs of the project and its team, but will guarantee effective management and direction in an evolving technology landscape.
2. Ensure collaboration, clear communication, and a shared vision among these roles: Collaboration and synergy within a technical team is vital for a successful project outcome. Granted, technical expertise is important, but in my experience, it contributes only about 20-30% to the project’s success. True success lies in a shared understanding among team members, where each individual comprehends the path the team is taking, the reasons behind those choices, and the planned dependencies of each project step on both the workflow and the team members involved.
The ability to navigate unplanned dependencies that may not be initially visible is also critical. Effective communication among team members is the only way to handle unforeseen challenges, ensuring that the team can adapt seamlessly to unexpected hurdles.
A cohesive understanding of the end consumer of the product is equally crucial for aligning efforts towards a common goal. Each team member needs to know not only the technical aspects, but also the broader context of who the product is intended for and how it will meet their needs.
3. Look for a diverse skill set: While I believe that collaboration and synergy can have a bigger impact on a project’s success than technical skills, that doesn’t mean technical skills aren’t still vital. These of course are specific to each role – software developers will need to be proficient in both frontend and backend development, while data scientists will need skills in ML algorithms and statistical analysis, for example. But a successful team in the insurtech domain should have a well-balanced mix of technical expertise, industry knowledge, innovation experience, and a client-centric approach. They should also be well-versed in cybersecurity measures, data security and compliance standards ready to take on the challenges the insurance sector faces now and in the future. This diverse skill set ensures that the team can effectively navigate the complexities of the industry while delivering solutions that meet or exceed client expectations.
4.Interview, onboard and L&D: The interviewing and onboarding processes, along with Learning and Development (L&D) initiatives, play key roles in shaping a well-rounded team. For standalone businesses entering such projects, this might include:
Interviewing:
· Hands-on assessments to evaluate technical proficiency
· Assessing communication, teamwork, and problem-solving through past experiences
Onboarding:
· Providing a thorough introduction to project goals and the importance of collaboration
· Conducting sessions emphasising cross-functional collaboration
L&D:
· Regularly analysing team skills through performance reviews or feedback sessions
· Developing programmes for both technical and cross-functional skills enhancement
· Encouraging ongoing professional development
For others, an independent vendor providing tech teams makes more sense, offering benefits such as cost savings, access to global talent with diverse skill sets, flexibility in team composition, reduced management burden, faster time to market, and adaptability to technology trends – to name a few. While these benefits make outsourcing to independent vendors an attractive option, it’s important to carefully select a reputable vendor and establish clear communication and collaboration protocols to ensure successful outcomes. In terms of Interviewing, onboarding and L&D initiatives, they should already have well-established processes in place, where you can:
· Ensure that the vendor has a well-defined interviewing process that assesses both technical and cross-functional skills.
· Verify that the onboarding process includes comprehensive training on project goals, client expectations, and effective collaboration.
· Confirm that the vendor has its own L&D initiatives to continually enhance the skills of its tech teams.
· Evaluate the vendor’s commitment to staying updated on industry trends and providing relevant training to their teams.
As the insurance industry continues through this profound technological shift and competition intensifies, know this; newer, more effective technologies will come before long, but it is the skills and expertise of individuals that will become your differentiator.
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