Innovating for the ‘Next Normal’
Even before the events of 2020, insurers were being challenged to reinvent themselves in order to stay relevant in a fast-changing world. Covid-19 has intensified those pressures in ways no-one could have predicted, forcing insurers to accelerate their digital transformation. Now, as panellists on the Insurance Innovators Innovating for the Next Normal webinar agreed, the challenge is to learn the lessons from the last six months and continue to innovate in order to stay competitive in a turbulent world.
“The art of the possible is much greater than we would have thought before the crisis”
When the pandemic hit earlier this year, insurers were faced with an initial operational challenge to keep their employees and customers safe while still maintaining service levels. “We’ve been able to do in the last three months what we would never have imagined within 10 years,” said Steven Zuanella, Group Chief Digital Officer at Generali, who said the group had mobilised to get 90 per cent of its staff working from home within 48 hours and switched the majority of its sales from face-to-face to online almost overnight. “The art of the possible is much greater than we would have thought before the crisis,” he said.
“This Spring has been a moment of truth for digital innovation in insurance”
Valtteri Saurila Head of Business Development and Innovation at Finland’s LähiTapiola, said the events of this Spring had been a “moment of truth” for digital innovation in insurance. “We have to say it looks better,” he said. “We can never go back.”
Mark Budd, Head of Innovation UK at Zurich Insurance Group, agreed, noting that it soon became clear that services once deemed discretionary, such as digital payments, almost immediately became hygiene factors.
“One carrier went from two million pieces of paper down to zero once its portal went live”
Laura Drabik, Chief Evangelist at Guidewire, agreed. “The industry has vaulted five years forward in a matter of eight weeks,” she said, highlighting the rapid shift from paper to digital documents as a result of the pandemic. “One carrier said it would no longer accept paper and requested people upload documents to its website,” she said. “It went from two million pieces of paper down to zero once the portal went live, which is an amazing example of how digital brings benefits to customers and carriers.”
Another area of focus was the deployment of conversational AI and chatbots to relieve unprecedented levels of calls in contact centres. “Let the robots handle the high frequency low complexity questions and free up the humans to do what they do well, which is providing service,” said Drabik.
“Innovation is not new. It’s the pace we need to deliver it at that’s new”
Mark Budd of Zurich pointed out that it’s not just digital innovation that matters, it’s the speed of delivery. “Innovation is not new,” he said. “It’s the pace we need to deliver it at that’s new.”
Sustaining the momentum
“History shows that companies that invest in innovation during a crisis significantly outperform their peers during the crisis and after the recover”
The key now, however, is to sustain this effort. “What’s really important to remember is that history shows that investment in innovation during a crisis significantly outperform their peers during the crisis and after the recover,” said Laura Drabik, Chief Evangelist at Guidewire. “This means leveraging InsurTech, particularly in payments, rapidly designing and deploying new lines of business, and accelerating digital, especially around self-serve.”
Indeed, times of disruption can also be times of opportunity for those carriers that can rapidly design new and compelling products to meet emerging market needs. “We are in the middle of a health and economic crisis and people want reassurance and want us to be there for them,” said Steven Zuanella of Generali. “We see there’s an emerging greater need for protection and how people can protect themselves against something like this in the future. Covid-19 caught people unaware and unexpected and we need products to respond to this so it doesn’t happen again.”
Our panellists agreed that the Covid-19 crisis has highlighted the important role corporate culture plays when it comes to innovation. Steven Zuanella of Generali put it best when he pointed out that the sudden switch to get 90 per cent of staff working from home had been operationally feasible before but hadn’t happened because “culturally we were not ready to make that change.”
“Culture grows up over time, in our case it’s the exhaust of 150 years of history,” he said. “You do not change that culture overnight but it does have to be at the heart of your transformation. Technology will only get you so far.”
Leading in a crisis
This important cultural transformation has to come from the top. “People need a licence to innovate and understand it’s important,” said Mark Budd of Zurich. “It needs to come from the top down and deliver from the bottom-up.
“Leaders need to be more buffalo – the only animal that runs into the storm. Be brave, be bold and take control”
Laura Drabik of Guidewire said leaders need to be “more buffalo”. “They are the only animal that runs into the storm, which means they spend less time in the storm,” she said. “Be like the buffalo, be brave, be bold and take control.”
Valtteri Saurila of LähiTapiola also said it’s important to have a diversity of opinion and fresh ideas, taking inspiration from other companies and other industries. “Look outside, not inside,” he said.
While some companies create small teams to lead their innovation effort unhindered by the legacy thinking of the rest of the organisation, Mark Budd of Zurich was sceptical. “They get short term wins but it does not change the culture and, in fact, it can be anti-culture because people then don’t see innovation as their job,” he said.
Valtteri Saurila of LähiTapiola pointed out that it can be healthier if companies have a mix of the legacy culture and the start-up mindset. Budd agreed. “It’s really easy for us on the innovation side to think the rest of the business needs to innovate but when the business is on fire and they are trying to keep it alive they have other priorities,” he said. “You need a balance.”
“Communicate quick wins. Show how doing things differently truly results in benefits for employees, customers and shareholders.”
When it comes to fostering an innovation culture, it helps to get people excited with a vision, a mission and an end point – this is why Covid-19 has spurred previously unimaginable digital transformation. But sustaining that requires new ways of working, to give employees the freedom and power to innovate and make mistakes.
“And make sure you communicate quick wins,” said Steven Zuanella of Generali. “Shout about it and show how doing things differently truly results in benefits for employees, customers and shareholders.”
Tools and technologies
Innovation can be overwhelming, particularly for an industry that has lagged others when it comes to digitalisation. For Steven Zuanella of Generali, smart automation is a good place to start to generate better customer experience and take some costs out of the business.
“A chatbot must yield an outcome, whether it’s a change of policy or processing first notice of loss. That’s when we’ll see them gain traction in the market.”
Laura Drabik of Guidewire backed chatbots because of their capacity to improve CX anytime, anywhere. She noted, however, that despite being listed as a top 10 trend, chatbots have yet to gain real traction in the industry. “Too often in insurance there’s a rekeying and duplication of what the chatbot has already asked and that’s not seamless CX,” she said. “A chatbot must yield an outcome, whether it’s a change of policy or processing first notice of loss. That’s when we’ll see them gain traction in the market.”
When it comes to CX, Steven Zuanella of Generali said video conferencing, digital signatures and automated verification of the customer’s ID would be hugely helpful to building richer and more seamless experiences for customers wherever they may be.
The pandemic has also accelerated the industry’s transition to the cloud and this is not expected to slow. “It’s because you get increased resilience and elasticity,” said Mark Budd of Zurich. “We have applications on our estate that were not designed to be connected to or used in a remote way so the driver of this is not the cloud for the sake of the cloud, the driver is resilience.”
Covid-19 has certainly unleashed digital transformation across the industry. To maintain the momentum, it will be essential to prove the investment is delivering a return. This is easy for quick wins, particularly those that drive out costs. But some innovations take a longer time to bear fruit.
“Ask what’s the cost of not doing it? What will your competitors do if you don’t do it?”
“One thing that will be more important over time is the question, what’s the cost of not doing it?” said Mark Budd of Zurich. “What will your competitors do if you don’t do it?”
Steven Zuanella agreed. “There are some projects where the ROI is measureable in the short term but for others you have to measure capability,” he said. “Are we doing things better and faster, are we making progress along this journey? It’s another way of measuring the journey.”
One thing is clear. With the pandemic not yet done, and insurers still facing ongoing waves of disruption, these digital transformation journeys still have some way to go.
Watch the full on-demand recording of the discussion here.
WEBINAR PRODUCED IN PARTNERSHIP WITH
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