Delivering next-gen customer communication in insurance
From mobile apps and chatbots, from voice to social messaging platforms, there are now more communication channels than ever before for the digitised Insurer. Yet despite significant investment, Insurers are finding these new tech-driven channels are only as good as the underlying systems. This Smart Communications and Salesforce roundtable, which pulled together senior figures from across the insurance industry, found common barriers, from incompatible legacy systems and data issues, to deploying next-generation communication solutions that will meet the expectations of today’s connected customer.
“There’s no appetite for extravagant IT projects in insurance. And there’s no silver bullet.”
Yanna Winter, Generali
The roundtable sessions kicked off with a thought-provoking presentation from Yanna Winter, chief information officer and Head of Generali UK IT and GC&C IT at Generali, who in her previous roles has headed four major digital transformations with a combined budget of £2 billion. “But there’s no appetite for extravagant IT projects in insurance,” she said. “And there’s no silver bullet.”
Winter said her IT strategy at Generali is “divide, conquer and integrate”, which involves breaking down the transformation into more digestible chunks, where progress and results can be readily proved. She’s currently leading a four-year transformation project at Generali, which started in 2019 with identity and integration work, then in 2020 it was an infrastructure transformation, moving everything into the cloud and onto Microsoft 365 and laptops, and this year it’s data and analytics before rounding off in 2022 with API modernisation. “Every year, I want to make sure my business is left as an island of stability,” she said. “You eat an elephant one slice at a time and it’s the same with communications.”
The assembled Insurers had their own unique challenges. One major Health Insurer described how his policyholders remain wedded to the telephone as their primary channel while another carrier said his customer base is clamouring for WhatsApp-style asynchronous chat functionality.
The key, our participants agreed, is to really understand what customers want and design around them, rather than introducing new channels for the sake of it. “You might think you have got the answer but you need to test and learn and try it out on different customers,” said one. “Otherwise, you can go live and find just five people use it. A brilliant technology solution, but so what?”
Legacy issues, again
Introducing new channels can highlight many fundamental incompatibilities with existing customer communication architecture, with many insurers finding their back-office infrastructure no longer up to the task. “The business works in a certain cycle and it’s quite long to get through large mainframe-based applications,” said one insurance executive. “However, the front end is moving at a much more accelerated pace, so we have the accelerated front-end building on infrastructure that is not geared for that. That’s the constant push and pull we have to manage.”
Our participants spent some time-sharing experiences about this “push and pull”. Front-end tactical changes can be made at speed but this can then expose the limitations of the legacy infrastructure.
“The business has to have the agility, flexibility and bandwidth to deliver projects at speed and lowest cost. Inevitably this means migrating to the cloud”.
Ruth Fisk, Smart Communications
Ruth Fisk, VP – Insurance Marketing at Smart Communications, said that in order to work at speed to meet customer expectations, the business has to have the agility, flexibility and bandwidth to deliver these types of projects at speed and at the lowest cost. Inevitably, she said, this means migrating to the cloud.
“We’re not just cloud first, we’re cloud only”
Yanna Winter, Generali
This is a trend that’s gaining real traction as companies seek to resolve the constraints of unwieldy legacy systems. “We’re not just cloud first, we’re cloud only,” said Yanna Winter of Generali. “We don’t have data centres any more. And if there are solutions that already exist then I will not compete on that, we will just use them. It’s about protecting my crown jewels and the rest I will buy.”
Others agreed that they were moving away from developing everything inhouse. “Now we look outside to see if there are solutions we can buy in,” said one participant.
“We’re now cloud first, web first and customer first,” said another. “We have a little bit on premise but we’re looking to retire that as soon as possible.”
For others, however, there’s a more delicate balancing act underway. “We have a massive legacy estate that’s the result of more than hundred years of organic growth and there’s a lot of data in those systems,” said one insurance executive. “The new work is into the cloud but at some point we have to integrate into our legacy system. How do we build up that API library to help us do that and help us reverse engineer and link back into our legacy systems?”
“That’s often the Achilles’ heel,” said another participant. “How do you find ways to mitigate the impact of that legacy architecture?”
Ruth Fisk of Smart Communications agreed that this is a real challenge for a lot of companies and it’s where the “communications platform as a service” can be a benefit to make sure companies have the capabilities they need while also being able to pull data they need from the legacy applications.
Yanna Winter added that companies must also put decommissioning on their “to do” lists. “If you don’t do this than you end up with the old estate and the new estate and the bills increase,” she cautioned.
It’s not just legacy technology that’s a problem. Legacy thinking can also act as a brake on innovation. “In the rear-view mirror, I can still see a lot of smoke from the burnt bridges,” said one participant, speaking from experience of a previous transformation project.
He described how he learned from that experience to ensure the roll-out of a new AI-enabled customer platform secured the buy-in of initially reluctant senior management team. “We used last year’s data to demonstrate that the answers coming out were accurate,” he said. “It meant we were doing test and learn in a relatively safe environment and moved the project from a paper presentation to something real we could show them. It meant we could then take it forward into the real world with some confidence.”
Another said they passed their “more wild experiments” to a start-up incubator outside the main business. “We want to see if something will work before we get too much into compliance that could kill it off,” he said. “We incubate it and see if it’s got legs and then build more governance and control around it. It’s an approach that works well for Insurers.”
“Failure is not an option in our industry”
“Failure is not an option in our industry,” observed one participant. “They key thing in insurance is trust, so failure isn’t an option.”
Yanna Winter agreed that the “fail fast” culture, which has allowed banking to innovate at speed, is still anathema to the risk-averse insurance industry. “It’s a very different attitude,” she observed. “Tech brands accept things have a 10 percent chance of success but which insurance corporate will sign off on something that has a 90 percent chance of failure?”
She said, however, that this is something that must change if the industry is to learn to survive in the digital age. “You cannot look at it as success or failure,” she said. “Choose the best candidate of 10 applications and cull the rest.”
“Everyone is waking up to the threat of the disruptors”
This willingness to innovate, fail fast and adapt will be key if the industry is to compete with potential new entrants with techsavvy solutions. “Everyone is waking up to the threat of the disruptors,” said one participant . “We’re all having the same challenges to respond.”
This threat has only been escalated by the fall-out from the pandemic, which turbo-charged customer adoption of digital solutions and raised their expectations for Amazon-style experiences across the board.
“The industry’s digital capabilities rapidly moved ahead during the pandemic, but so too did consumer expectations,” said Jim Bruce of Salesforce . “In the future, everything is going to be about real-time personalisation and immediacy.”
“Customers don’t have the patience for us to get our acts together and we see a big threat if someone really does come in to try disrupt this market,” said one participant. “There are other industries that are much better at all of this. Auto manufacturers, for example, are collecting data about car usage, driving behaviours, location and taking a lot of what used to be insurance intellectual property. If we don’t get our act together, the consumer will run out of patience with us.”
The next five years
One thing is clear: more change and disruption is on its way and our participants are bracing themselves for relentless iteration and re-invention.
“It’s a sprint in some areas for more tactical changes but it’s also a long journey to keep re-engineering and transforming ourselves,” said one participant. “You have to build something knowing that in a few years you will be building something even better. We will never get to the point where everything is done, we will keep re-inventing ourselves year on year.”
Others agreed that for many insurers, this hard work is only just beginning. After all, this is an industry where analogue forms and fax machines still play a role in many customer journeys. “We generate a lot of forms,” said one carrier. “We need to get away from that. There are start-up solutions that turn the form into a two-way communication and that’s where we’d like to be in the next five years.”
“Risks that used to be the lifeblood of insurance are being diluted and even eliminated,”
Jim Bruce, Salesforce
Others pointed out that for all the talk of “omnichannel” experiences, the industry is still not offering those multichannel experiences and seamless hand-offs. Even so, some are looking towards more radical shifts in the industry over the next five years, with the rise of proactive risk mitigation and prevention. “Risks that used to be the lifeblood of insurance are being diluted and even eliminated,” said Jim Bruce of Salesforce, referring to the vast data flows arising from the Internet of Things and the power of smart algorithms to identify risks before they crystallise. “It will change the face of insurance pretty radically and Insurers will have to be proactive to remain relevant and continue to give people that protection they were set up to do.”
“We will have to be fleet of foot to participate in these ecosystems”
Embedded insurance solutions are likely to be another radical shift in the insurance landscape, although one participant observed the industry will “have to be fleet of foot to participate in these ecosystems”.
Another said these new insurance models have yet to prove their financial credentials. “There’s no financial incentive for us to go into embedded markets,” said one health insurer. “The models mean the pie gets sliced very thinly. Where are the margins? How do we change the commercial model so we give the customer good value and it’s also viable for us?”
“Insurers have never been the fastest movers or the biggest risk takers but there are advantages to that”
As one insurance expert observed, however, this is a moment when it makes sense not to rush ahead blindly. “Insurers have never been the fastest movers or the biggest risk takers but there are advantages to that,” said one. “We can learn from other industries and take advantage of feedback loops.”
Indeed, the virtual roundtables were part of this process, with participants agreeing they had learned a lot by sharing their journeys and experiences.
WEBINAR PRODUCED IN PARTNERSHIP WITH
Smart Communications is a leading technology company focused on helping businesses engage in more meaningful customer conversations. Its Conversation Cloud™ platform uniquely delivers personalized, omnichannel conversations across the entire customer experience, empowering companies to succeed in today’s digital-focused, customer-driven world while also simplifying processes and operating more efficiently. Smart Communications is headquartered in the UK and serves more than 650 customers from offices located across North America, Europe, and Asia Pacific. Smart Communications’ Conversation Cloud platform includes the enterprise-scale customer communications management (CCM) power of SmartCOMM™, forms transformation capabilities made possible by SmartIQ™ and the trade documentation expertise of SmartDX™. In 2021, the company acquired Assentis, a leading European software solutions provider specializing in customer communications management (CCM) with a focus on the financial services industry.
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