5 minute read
A new operating model
A new operating model for digital transformation
The Norwegian Shipowner’s War Risks Insurance Association (DNK) insures approximately $224bn billion assets and is one of the world leaders in marine war risks insurance. Some 470 shipping companies are covered by the association against possible damage resulting from war, terrorism, piracy and cyber attacks. DNK’s CEO Svein Ringbakken explains how the 85 year-old war risks insurer’s digital journey is leading it from technology investments to a new operating platform.
Digital transformation has become a top priority for businesses in all industries that are under seemingly ever-rising pressure to innovate and grow in a constantly changing environment. Marine insurance is no exception. With a business model that has been largely unchanged since the 17th century, the marine insurance industry is particularly exposed to the rapidly changing needs of its core client base.
As shipping and supply-chain logistics are embracing digital opportunities at full speed, so the insurance providers that support this important sector find themselves devoting significant time, effort and capital to keep up.
The Marine Insurer | March 2020 Marine insurance in general, and the specialty war risks insurance market in particular, is making considerable progress in addressing new risks that emerge from new technologies and the increasing cyber risk facing the maritime industry. Insurers are responding with new products, innovative pricing platforms and digital distribution models.
Most insurers are planning to invest even more aggressively in technology going forward, expecting that this will strengthen their strategic position and yield positive commercial effects. However, when one considers industries such as finance or media that embarked upon their digital transformation paths long before the marine insurance industry, there is little evidence to suggest that investment in technology alone leads to tangible results.
DIGITAL TRANSFORMATION DNK believes that digital transformation is about more than implementing discrete technologies. Rather, it requires the development of a broad set of technology-related capabilities that prepare the entire organisation for the journey towards becoming a “digital-proof ” enterprise.
Over the last decade, the business has made significant strategic investments in technology in order to keep its business model relevant for customers. DNK transformed its traditional emergency support capacity into a pro-active, data-driven intelligence operations center that works closely with shipowners on a daily basis to provide critical threat assessment and loss prevention. DNK uses intelligence tools and databases to collect and evaluate relevant information, and apply market-leading technology as an integral part of its incident response capabilities.
Two years ago, DNK launched an industry-pioneering Internet-ofThings (IoT) solution to automate reporting of trade in high risk areas. This implements a digital tracking system which sends encrypted signals by satellite about a ship’s position in virtually real time to the insurance system, and into a cloud portal where the data can be accessed also by the insured.
Today, the “Raptor” tracking device is deployed to almost 2,000 vessels in DNK’s fleet, providing shipowners with valuable new data and insights about their operations, while significantly reducing their administrative burden. Together with the group’s technology partner from the automation project Clearwater Dynamics, we launched the startup company Osprey Solutions which provides Insurtech and IoT solutions to the maritime industry.
The next big service challenge is to ensure relevant, practical insurance solutions for the increasing cyber threat to the digitised maritime business. Providing cyber war cover makes this a necessity.
Svein Ringbakken DNK
A NEW OPERATING MODEL As DNK’s service offering has become more and more digitised, we realised that our next strategic investment needs to be to secure the right level of digital maturity within our own organisation to be enable us to deliver to our service value proposition.
To establish a common understanding of where we are, we have conducted a comprehensive digital maturity review of our operational model across various dimensions such as organisation and culture, systems and processes, strategic alliances and – not least – customer experience.
On the basis of this analysis, we have identified a number of strategic ambitions to prepare our operational model for digital transformation, ranging from IT platform architecture redesign to the introduction of new roles with cross-functional responsibility for digital change projects.
One of the key focus areas for our new operational model is customer experience. In a business-to-business environment such as marine insurance, it is easy to believe that we are companies dealing with companies. However, as with any other business, we are actually human beings dealing with human beings. Our customers are individuals who expect us to build our solutions around their specific needs and preferences to ensure a seamless user experience from which they can derive what they want, when and where they want it. New technology will hardly be able to improve customer experience if the solution is developed from the insurer’s perspective without truly understanding who the user is.
As a member-owned organisation, DNK has always had a sharp focus on the provision of excellent service to our customers and business partners. By investing in new, digitally enhanced user interfaces, adjusting and processes and extending the internal use of data and analytics, we will be able to establish a 360-degree view of our customers across the entire organisation and make our offerings even more customercentric.
DIGITAL-PROOF As with most organisations in the marine insurance industry, we are so-called “incumbents” of the digital age, which means that our operational model was designed at a time when collaboration, analytics and decisions-making was very different from today. And like other marine insurers, we can’t possibly predict what the future holds for our industry.
However, we strongly believe that our ability to reap the benefits of digital technology for our industry depends upon our willingness to fundamentally transform how we work today, and migrate to a new operating platform that is suited for the digital future. By adopting new structures, processes and methods that help us work smarter and collaborate better, and by continuously striving to truly understand our customers’ needs, we can establish a new DNK-operating model that should keep even an 85 year-old industry veteran fit for a digital future.
