(Reproduced with permission from Insurance Post)
Graeme Howard, chief technology and information officer at Covéa Insurance, shares the three key ingredients of systems, agility and trust culture to succeed in innovating on a transformative scale.
If you wanted to create the insurance equivalent of Apple or Tesla, where would you start? Is it even sane to consider turning a regulated mundane grudge purchase into something desirable?
When Apple defied collective market wisdom and designed an entirely different operating system to run its hardware, and when Tesla manufactured an electric vehicle needing its own charging infrastructure for it to work, the majority of people thought them crazy outliers. Hindsight can be so humbling.
So far, we’ve not seen anything so radical in insurance where innovation thus far has centred largely on digitising details and eliminating customer pain-points. Improvements to pricing transparency, the quote and buy process, fraud detection, product cover and claims are all incrementally enhancing customer experience but, the truth is, we have yet to see innovation that delivers something fundamentally different or new to delight customers.
That might seem surprising. With technology accelerating at breakneck speed, a colossal data trove and an estimated £90 billion in premiums annually, there’s an opportunity for innovation and disruption in the general insurance market on a scale like no other. You’d think.
Sure, we’re seeing some really interesting collaborative partnerships with insurtechs offering innovative niche products, but these have yet to reach the scale to bring about a fundamentally dynamic shift in the way the market operates. That means we’re still looking at a gulf between current customer perceptions of insurance and the vision we aspire it to become.
When I think about how to get closer to the vision, I believe it comes down to three essential ingredients.
First of all, systems. These represent our manufacturing capability; we need to be able to ramp up production, switch to making different products, alter the product design, speed up the process and reduce costs. If the existing system can’t do this, needs replacement parts, is expensive, inflexible or slow, it may require an upgrade or an entire redesign. As insurers know, upgrading legacy systems requires a long-term view, significant investment and courage, but where would Apple or Tesla be if they hadn’t redefined their operating systems?
This leads me to my second point about agility. Today’s rapid pace, and tomorrows faster paced market means change is both necessary and inevitable. The pandemic has clearly shown that businesses with a ‘can do’ attitude, that can adapt fast and re-focus their proposition to fit the new norm are coping far more successfully. Such rapid change is not achieved through lots of structural hierarchies or bureaucracy, but by having a workforce that feels part ownership of the journey and in turn is trusted to make the right call for the right reason.
Which brings me to my third and final point about a trust culture. Transformational change will only happen if people feel empowered and safe to make decisions. Culture drives collective behaviours and inspires people to work collaboratively, influencing how they behave, how they prioritise what matters, how they find authentic value in what they do. A trust culture is crucial because change needs people to experiment, take risks and venture fearlessly into the unknown. When I first told my CEO my plans for digital transformation at Covéa, he was (I quote) ‘excited and terrified in equal measure.’ but he trusted me to get on with the job and has supported me as I’ve encountered inevitable gremlins along the way.
Just as Apple and Tesla reimagined their products, if we want to create something really new and different, we need to create an environment where our people are comfortable with fighting for ideas no-one else believes in, where there’s risk of failing too. Only when we have a culture where people feel truly safe will we succeed at innovation on a transformative scale. There’s a saying that goes ‘failure itself is rarely fatal, but failure to change is’ and that’s what all incumbent insurers must grapple with as we face into a challenging but exciting future.
About Covéa Insurance
Covea Insurance Plc is the UK underwriting business of leading French mutual insurance group Covéa, who are number 1 for property and liability insurance in France, generating over 17.4 billion Euros in premiums in 2019.
Covéa Insurance looks after the insurance needs of over 2 million policyholders; delivering financial reassurance through its Standard & Poor’s ‘AA- stable’ rating, as a guaranteed subsidiary of Covéa.
The company offers motor, household, protection, pet, mid and high net worth insurance and a range of commercial insurance products, through a range of distribution channels.
Employing over 1900 people, Covéa Insurance has a strong people and service ethos. It holds ServiceMark accreditation with Distinction for its Personal Lines operation and its Commercial & HNW Claims teams, as well as Chartered Insurer status for its Commercial business. Covéa Insurance is signatory to the HM Treasury Women in Finance Charter and the insurance Inclusivity Pledge and has been named one of the top 75 employers in West Yorkshire & the Humber.
Recently, Covéa Insurance has been named as the Best Place to Work in Digital (Large Organisations) at the Digital Technology Leaders Awards and as the Best Employer at the Yorkshire Financial Awards. They were also recipients of the High Net Worth Product of the Year Award at the Insurance Times Awards, the Staff Empowerment Award at the Diversity & Inclusion in Insurance Awards, and the Diversity Award at the British Insurance Awards.