Modern Insurance Magazine Issue 43

ISSUE

43

ISSN 2515-3803

Connecting Insurers, Brokers, Lawyers & Claims Professionals

Human+Machine Collaborations: The End of IQ, The Era of EQ Inma Martinez, advisor to the EU in Big Data and A.I. Regulations.

Working with

Getting Ahead of the Hacker Jake Davis, Hacker and Security Expert.

Shaping work to inspire engagement

Leading in a New Era of Connectivity

Perry Timms, Founder and Chief Energy Officer, PTHR.

Mario Conde, Partner, Bain & Company.

Claims

anaged M A fully outsourced Claims Management solution to reduce the total cost of claims whilst delivering customer service excellence.

Repair N

Recover

k

etwor yN

Proud to partner with a UK-wide repair network of 316 suppliers, dedicated to working hand-in-hand to deliver customer solutions.

ork etw

Our quality-assured network of vehicle repair partners provide a full range of high-quality repair options to reduce vehicle off road times to an absolute minimum.

Contact us for more information by emailing us at marketing1@fmg.co..uk or call us on 0344 243 8888

WELCOME

2020 is proving to be a very interesting year, we are only a few months in and have already faced a handful of challenges. However, in challenging times, we often turn to those we look up to and believe to be more experienced and knowledgeable. When a child falls, they will run to their mother or father. If an employee is unsure or makes a mistake, they will turn to their mentor. Even the most wise and experienced worker will have someone they instinctively reach for.

This has been the human experience for as long civilisation has existed. But with the influx of technology – A.I systems, search engines, smartphones, etc – this way of life is being threatened. Nowadays, an employee would much rather conduct a quick Google search of their question, than ask another person. In this very special edition of Modern Insurance, we have prepared a line-up of incredible experts across a variety of sectors, to cast their view over this new world of expertise.

This decade has undoubtably seen the rise of tech, with an explosion of A.I systems integrating into thousands of companies across the world. But despite the popularity, there are still questions and uncertainty surrounding A.I. Inma Martinez, A.I Scientist and advisor to the EU, considers how artificial intelligence rose to such heights. As a Tech pioneer, Inma shares her insight into collaborating with the machines for a successful future. Among many of the growing concerns, is one of safety and protection. Jake Davis, hacker turned activist, quells these fears with information on what a hacker is looking for, and some tips on how to better protect your business. He has an interesting view on A.I, too.

With a new generation of workers, comes new challenges in managing them.

Modern Insurance had the pleasure of speaking with Perry Timms, Founder and Chief Energy officer at PTHR, about the new wave of people management and engagement. As a ‘futurist’ for people management, he opens up on the best ways to inspire engagement.

Our editorial board gurus focus in on their own opinions on the role of knowledge in this new world. We see a variety of opinion and beliefs on the idea of an artificial expert. Is it a good thing? Is it bad? Should we collaborate with it? Turn to pgs. 21 – 33 to read them all.

(Top) Megan Tait-Davies, Editor, (Bottom) Rachael Pearson, Project Manager

Megan Tait-Davies, Editor, Modern Insurance Magazine.

01765 600909 | megan@charltongrant.co.uk

Editor Megan Tait-Davies Project Manager & Events Sales Rachael Pearson

ISSUE 43 ISSN 2515-3803

Modern Insurance Magazine is published by Charlton Grant Ltd ©2020 All material is copyrighted both written and illustrated. Reproduction in part or whole is strictly forbidden without the written permission of the publisher. All images and information is collated from extensive research and along with advertisements is published in good faith. Although the author and publisher have made every effort to ensure that the information in this publication was correct at press time, the author and publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause.

MODERN

INSURANCE

|

03

M A G A Z I N E

CONTENTS 09

12

39

INSIGHT

INTERVIEWS

09 Human+Machine Collaborations: The End of IQ, The Era of EQ

12 Getting Ahead of the Hacker

Inma Martinez, Tech Pioneer and A.I Scientist, discusses the origins and rise of A.I and machine learning, and considers the need for collaboration.

Jake Davis (aka Topiary), former Hacktivist turned security consultant and speaker, is all about understanding the psychologies of hacking, and educating the next generation of technology experts.

Modern Insurance spoke to him about cyber protection against the modern hacker.

17 Shaping work to inspire engagement

EDITORIAL BOARD

21 Find out what our editorial board panel of experts have to say in this edition of Modern Insurance Magazine.

Perry Timms, Founder and Chief Energy Officer of PTHR, is a global and TEDx speaker, author and consulting advisor on the future of work. Speaking with Modern Insurance, Perry brings his experience to the insurance industry, discussing new business models, energy management, and modern methods for employee engagement.

SECTOR

F E AT U R E S 39 Industry Innovators Interview: Attestiv

Modern Insurance caught up with Nicos Vekiarides, CEO and COFounder of Attestiv, to see how Attestiv are looking to do things differently for the industry.

43 Using Video in Insurance in 2020

John Ridd, CEO of eviid, discusses high-speed claims, an operational safety net, deep fakes, and the rising utilisation of video within insurance.

SOAPBOX

35 Modern Insurance’s panel of resident associations

outline the turbulence ahead for the Claims Sector

EDITORIAL

04

|

MODERN

BOARD

CONTRIBUTORS

INSURANCE

M A G A Z I N E

CONTENTS 44

53

60

F E AT U R E S 44 Fraud in the Motor & Disease Sectors

Modern insurance caught up with Weightmans to discuss the current trends in Fraud. We spoke with Jeff Turton, Principal Associate, on fraudulent claims in Motor, and Paul Debney, Partner, on fraud in Disease.

46 The Personal Injury Debate

In this issue of Modern Insurance, we hosted a Personal Injury forum with some of the industry’s experts. Though opinions can differ greatly, and we don’t always agree with what we read, these debates allow our readers to see expert opinions and insights into the topic at hand.

48 Leading in a New Era of Connectivity with Bain & Company

58 Erik Saelens

52 Data Analytics in a New Era

55 Prosthetics & Rehabilitation

60 Forget tradition it’s time for digital

Andy Yeoman, CEO of Concirrus, is an expert at harnessing the power of advanced data analytics. Here, he considers the future of data analysis in a new era of connectivity.

Matthew Hughes, Managing Director of Dorset Orthopaedics, discusses the importance of keeping the patient at the forefront, and how we can redefine mobility in this new decade.

56 Meteorological Intelligence

Jamie Banasik MSc, Founder of Metswift, delves into the details of weather analysis and the steps the insurance industry still need to take.

61 An Interview with Eddie Longworth

by Eddie Longworth

62 10 minutes with…

EUROPCAR NEW BRAND BLOCK Color gradient background

Can there really be innovation in insurance? Is this whole #Insurtech thing just a trendy bubble that will soon burst? Or is there gold in those hills? Garry Hamilton, Group Business Development Director of Equator, discusses.

10 MINS WITH

Modern Insurance spoke with Mário Conde, a Partner of Bain & Company, about the results of their 2020 customer behaviour and loyalty in insurance survey.

File: 20151645E Date: 7/10/2015 AC/DC validation : Client validation :

Erik Saelens, Founder and Executive Strategic Director of Brandhome, expert in brand management, discusses what exactly makes a brand. He touches on Brandhome method®, the challenges insurance brands face, and how we can tackle them.

Mike Brockman, CEO of ThingCo.

Disclaimer: Our publications contain advertising material submitted by third parties. Each individual advertiser is solely responsible for the content of its advertising material. We accept no responsibility for the content of advertising material, including, without limitation, any error, omission or inaccuracy therein. We do not endorse, and are not responsible or liable for, any advertising or products in such advertising, nor for any any damage, loss or offence caused or alleged to be caused by, or in connection with, the use of or reliance on any such advertising or products in such advertising.

MODERN

INSURANCE

|

05

E D I T O R I A L

B O A R D

CONTENTS

21 The Future Expert

David Williams, Managing Director, Underwriting & Technical Services, AXA Insurance (UK).

Alister Jupp, Head of Crawford Global Technical Services, UK.

21 Business Agility to Mobilise Ability

27 Expertise and AI

23 Human and/or Machine?

29 Where does human knowledge fit into the future of the claims process? Will it become immaterial?

Andrew Chandler, Sales Director, FMG.

Jason Tripp, Managing Director, Coplus.

23 Excellence in Customer Care

James Roberts, Business Development Director, Insurance, Europcar Mobility Group UK.

25 Bridging the gap - how automation is changing the future of motor claims

Stephen Bevan, Client Director, Sedgwick International UK.

25 Lenders’ Finance Agreements

06

27 Training the Next Generation

Paul Higham, Head of Property Insurance, Allianz.

|

MODERN

INSURANCE

Paul Sykes, Regional Managing Director, ControlExpert UK Ltd.

Donna Scully, Director, Carpenters Group.

29 Will the constant tech evolution dictate what makes an ‘expert’? Will experience be enough?

Lisa Pugh, Business Development Director, National Windscreens.

E D I T O R I A L

B O A R D

CONTENTS

31 Insurance is an industry to build a career in, where knowledge and experience creates expertise. But with the current development of AI tech and intelligence systems, how will the definition of an ‘expert’ change?

Alan O’Loughlin, Director, Statistical Modelling, International Markets, Insurance, LexisNexis Risk Solutions.

31 Is there any advice you would give to young starters in the industry?

35 Digitalisation of the expert

Nik Ellis, Managing Director, Laird Assessors.

Paul Nicholls, Chair of Motor Accident Solicitors Society (MASS) and Senior Partner at Nicholls Brimble Bhol Solicitors.

35 Experts – covert recordings

Anthony Baker, Partner at Plexus and President of Forum of Insurance Lawyers (FOIL).

36 Expert Claims Service Delivers Results

James MacBeth, Managing Director, Auto Windscreens.

33 What is currently being done to encourage and nurture new talent?

SECTOR SOAPBOX

Andrew Gibbons, Managing Director of Mason Owen Financial Services Ltd, Chair of Industry Claims Working Group on behalf of BIBA.

36 Reform Delay

Gordon Dalyell, president of the Association of Personal Injury Lawyers (APIL).

37 Softer Skills for Better Performance

Dr Matthew Connell, Director of Policy and Public Affairs, Chartered Insurance Institute (CII).

MODERN

INSURANCE

|

07

right people. right skills. right technology.

www.carpentersgroup.co.uk

END-TO-END COMPLETE CLAIMS & LEGAL SOLUTION

INSIGHT

Human+Machine Collaborations: The End of IQ, The Era of EQ

Inma Martinez, Tech Pioneer and A.I Scientist, discusses the origins and rise of A.I and machine learning, and considers the need for collaboration.

A

s 2020 unfolds, humanity is currently encountering what Medieval society feared the most: the world’s order falling into chaos. However, it was precisely this shake-up which gave way to one of humanity’s most dynamic and transformative eras: The Renaissance. Amidst the tumbling pillars of centuries past – that humankind can use and abuse nature at will, that pandemics and international wars wipe out populations and send economies into downwards spirals - the lessons learned from each, are producing new mindsets and paradigms that will form a more advanced society, just like we did in the 1500s.

Today, we are realising that ethics, diversity and inclusion encompass not just humans, but the animal and the nature kingdoms too. Furthermore, progress is not a quantifiable tool to account for the number of patents and inventions developed within a given century, but instead the value that a service, a product, or a corporation, can deliver to the highest benefit of all concerned.

A.I. was born out of World War II - the twentieth century replica of the Medieval concept of Hell. This international conflict also derived another unimaginable powerful tool: nuclear fusion. Used at inception to cause pain and horror in the form of H-bombs, today it is considered a green energy because it protects our air quality by generating electricity without harmful pollutants.

A.I. had a reverse fate: while it helped decode the Nazi ultraintelligence messages - shortening the war in Europe by more than two years and saving over 14 million lives - it has in the 2010s created the Cambridge Analytica fiasco, the wide-spread of fake news, the conspiracy of manipulating people’s facial expressions and pasting them onto bodies that are not theirs.

A.I. is not an entity that acts on its own. It is created and deployed by humans. It can be created without regulation, and it can be audited for what it brings to society.

Our Dedication, Your Success Multi Award Winning consultancy dedicated to providing recruitment solutions to the Insurance and Financial Services industry.

London

Hertfordshire

Birmingham

Manchester

Bristol

New York

T: 0203 411 8430 E: london@lawesgroup.co.uk

T: 01992 445710 E: hertfordshire@lawesgroup.co.uk

T: 0121 314 9116 E: birmingham@lawesgroup.co.uk

T: 0161 660 1359 E: manchester@lawesgroup.co.uk

T: 0117 911 3730 E: bristol@lawesgroup.co.uk

T: +16 468 510 2729 E: info@lawesgroup.co.uk

MODERN

INSURANCE

|

09

INSIGHT

A.I. is not an entity that acts on its own. It is created and deployed by humans. It can be created without regulation, and it can be audited for what it brings to society Machine intelligence impacted computer scientists and mathematicians because it demonstrated a machine’s ability to amplify human knowledge and understanding, even to simulate human thinking. With this purpose in mind, machine intelligence was developed for decades to create progress; from the birth of statistical analysis, which ignited the efficiency of the money markets, to scenario planning, which allowed governments to plan not just whether or not to enter into new armed conflicts, but also to plan urban developments based on population’s needs.

In the private sector, oil and gas companies have been honing scenario planning algorithms since the 1970s, to accurately manage their prospection sites. Shell has some of the world’s best trained “algos” performing this task. As we carefully trained machines to think in more sophisticated ways, we also thrived to allow machines to attempt thinking on their own, and so the 1980s, and 1990s, saw the birth of automated robotics and personalisation systems based on observations of human behaviours.

The first encounter that most people had with an intelligent system was arguably the “people who bought this book also bought this other one” scenario. Collaborative filtering (an algorithmicbased relational system where every piece of information is an object), created suggestions for digital users in music streaming sites, further items to purchase in retail e-shops, and eventually a pretty accurate map of what we like or not based on choices we previously made within defined scenarios. I built one of those in 2000. It re-ordered the links to content in WAP mobile portals so the desired results would always appear in the first screen, saving users insanely tedious scrolling.

Nevertheless, something spun a twist in the development of A.I. - a reversal of fortune caused by IBM’s Blue. In 1996, the big Titan of machine intelligence at the time, beat chess grandmaster Kasparov, putting a dent in the souls of the Mensa illustrious members, thus demonstrating that human IQ was soon to be dethroned as the bar to measure human brilliance. Intelligence in the post-World War II society was all about IQ. Mensa, created just as the war folded, aimed to form an elite society for those who could demonstrate superiority in computational intelligence.

Mensa never tested creativity, abstract mindfulness, or inductive and deductive thinking. The world’s obsession with IQ thus determined that chess players were geniuses, and mathematics prodigies that could perform calculations in their heads were super-humans. So, when machines dethroned world chess players, and Alpha Go even taught itself from scratch to play and win every time, learning from the basic rules of the game and not from the moves of the human masters (as other A.I. programmes learn to play), some thought that humanity would soon be control-altdeleted by the powerful IQs developed by A.I. programmes.

We are heading into a future so full of informational data, that we definitely need machine intelligence to govern and understand what surrounds us

10

|

MODERN

INSURANCE

However, this is not the purpose, or best use of machine intelligence. IQ is not our best super-power. It is neoteny - our wild, imaginative, unstoppable curiosity. What made our neocortex grow bigger than any other mammal? What got us out of the jungles and made us build a world’s order, a civilisation?

The A.I. paradigm that evolved from the Kasparov defeat, aimed at creating machine intelligence that could be versatile, imaginative, talented, and even precocious. The 2000s, brought a new type of machine intelligence training camp: neural networks.

Attempting to create an artificial brain based on how a human biological brain operates, neurons became nodes, and just like human thinking creates synapses - the physical manifestation of human thoughts take place when neurons fire and wire together machines were encouraged to think further by fluidly developing deep neural nodes, and with this, a machine intelligence that was fast and virtuous but also black-boxed.

In Deep Learning, we know when the system has learned something because we observe how accelerated the neural networks grow, and how fast the acquired knowledge manifests itself. When Alfa Go Zero learned to play and win 100 to nil, it interpreted the infinite possibilities of the game far beyond what a human brain could. It was simply that. It had been encouraged to do this. Alfa Go Zero became the token example of how a deep learning system can quickly learn within a computational – big data-fed, binary outcome purpose – win or lose, but not a third outcome. Alfa Go Zero only knows how to play board games. It will not hack into the national grid and switch off the energy supply. That is actually performed by human hackers.

Cybersecurity and not A.I. development, is what represents the biggest threat to the digital society.

When A.I. is used as the tool it is, sectors like medical diagnosis, car design and pharmaceutical drug therapy development, have all seen a huge jump in innovation, allowing digitalisation and A.I. to take the lead in the creation of products and services. A.I. saves money, time and delivers better results than our own biological physiology, which is simply not capable of accomplishing tasks with millimetric precision; detecting cancer markers in blood samples, MIRs or CT-scans, measuring and detecting the effects of thermo and crash dynamics in a wind tunnel when designing a vehicle, or spending ten years and an average of £2 billion in drug development based on clinical or in-vitro trials.

At this very moment, machines are helping governments make informed decisions on whether or not to close ports of entry into every major city in Europe and North America, quarantine Covid-19 infected areas, and calculate the effect of this virus on national GDPs. When the data is vast and the outcomes are a multiplicity of possibilities, type A ‘force brute’ machines are our best allies: they visualise for us, simulate for us, even predict the future. They have been trained to think via mathematical algorithms that deliver ‘known unknowns’- circumstances that we know exist but that we are unable to pinpoint. Best of all, they reveal ‘unknown unknowns’ - that which lurks in the background which we are completely unaware of.

We are heading into a future so full of informational data, that we definitely need machine intelligence to govern and understand what surrounds us. Here is where A.I. becomes a force for good,

INSIGHT

As we carefully trained machines to think in more sophisticated ways, we also thrived to allow machines to attempt thinking on their own as these machines become our eyes and ears to the world, and the source of insight for us to stay alive - if what goes on is a sentient, invisible force that spreads across the world faster than we can comprehend how to stop and contain it.

No one has a problem with machines that deliver benefits to society, so what makes people nervous about A.I.? I believe it’s the fact that machines think inside black boxes that we cannot crack open and analyse. Google is currently being challenged by the EU, to modify the algorithmic architecture of YouTube, in order to prevent children being exposed to extreme radicalisation and X-rated content. It can’t fix this as if it were a couple of lines of code that one can go into, delete and re-write. YouTube’s algos are part of a closed-up artificial brain. Just like Alzheimer’s cannot be surgically removed, the only way to stop an A.I. system from delivering overfitted or inappropriate results is to shut it down and delete it. The tribulations that A.I. companies like Facebook are facing today, is to whether they need to chuck away their old A.I. systems and build new ones that are ruled by ethics and the protection of truth and consumer rights, or continue to generate billions for their shareholders. The real problem is not A.I. itself, but the evil uses that A.I. has been asked to deliver.

As machines take on more computational tasks, we are beginning to develop more creative approaches to solving the world’s problems. Machines do not possess tacit knowledge - acquired knowledge that comes from embodying what we learn and excelling at it overtime. Think athletes, sports champions. You cannot replicate Roger Federer, but unique athletes can use the same techniques and then mould their unique tacit knowledge with their own biological DNA. This is why there was only one Steve Jobs. Every Bezos, Musk, and Nadella are their unique

selves. Because tacit knowledge cannot be put into words, it cannot be coded. It cannot be cloned, copy and pasted into an A.I. system.

The future is one where human+machine collaborations bring forth outstanding results together, where human creativity, intuition, empathy, and all the rest of our biological powers use A.I. to achieve desired results. As I write this, I am asked again to work in conjunction with EU commissioners on the future regulatory environment of A.I. in the modern European society. It is a future of ethics, not algos. A 2030 society of human splendour.

Inma Martinez

is the advisor to the EU in Big Data and A.I. Regulations.

Discover more from Inma at www.inmamartinez.io or @inma_martinez

MODERN

INSURANCE

|

11

INTERVIEWS

Getting Ahead of the Hacker Jake Davis (aka Topiary), former Hacktivist turned security consultant and speaker, is all about understanding the psychologies of hacking, and educating the next generation of technology experts. Modern Insurance spoke to him about cyber protection against the modern hacker.

Q A

As cyber-attacks and business hacking continues to grow, what drives hackers – is it the challenge and kudos, or financially driven?

Most hackers are ethical, and veer on the side of defending the average user. Those doing it for challenge and kudos usually aren’t out to hurt anyone. However, financially motivated criminals are a completely different story. To them, the hacking of companies and extraction of funds is merely part of a wider ecosystem, which often extends beyond hacking itself. You may be targeted opportunistically with a specific set of exploits, and it’s often the case that the attacker will have no idea who you are or what you do.

Q A

For those that do suffer a cyber-attack, is there an attraction for hackers to revisit the same company?

Large companies tend to face a serious problem with their asset management. Professional pentesters usually end up finding some obscure weakness in a complex network of many moving parts that the company itself doesn’t even fully comprehend.

For those with criminal intent, it’s often not very difficult to exploit this repeatedly. They don’t need to rely on a hacking operation that’s sophisticated or well-funded, they just assume the target has a poor understanding of its own internal structure and run circles around them. It’s something I have said for many years: if a hacker can perform a light scan of your public-facing internet presence and know it better than you, you have a serious problem. Investing in people, rather than checking security boxes, is the solution.

12

|

MODERN

INSURANCE

Q A

Does utilising an increased amount of smart tech / IoT and holding big data make insurance companies more appealing to be hacked?

If you’re a large entity full of IoT devices and smart tech that hasn’t properly thought about security, you’re probably going to get hacked. It’s worse than just being a juicy target - you will be hacked by accident, simply as a result of exploits being sprayed wherever possible. Criminal hackers will target a specific vulnerability in a specific IoT device and automate the use of that exploit against every potential victim in the world, hoping to hit home with a reasonable percentage of them before the exploit is no longer viable. These operations are conducted in bulk and scoop up the low hanging fruit. So, companies, who assume they’ve been specifically targeted, are often surprised to learn they were hit by a big hacker net that wasn’t really looking for any specific fish.

Q A

Are those companies navigating a Merger and Acquisition more vulnerable? If so, what can be done to reduce this risk?

If we take a step back and imagine network vulnerability as a whole, we can think of new nodes adding exponential risk to every other node. A lack of synergy between nodes results in weak links that are then abused. It’s very important when joining any two systems together - even if they’re both already secure on their own - that no new vulnerability is introduced into the ‘immune system’ during the merge. If you’re in a position of acquiring a

INTERVIEWS

You may be targeted opportunistically… it’s often the case that the attacker will have no idea who you are or what you do arbitrarily making a device “smart” is not a good idea. We live in an age where internet-connected door handles can be remotely hijacked by scanning huge IP ranges. Not only do we need to stop, we need to roll back. AI is absolutely brilliant for science, medicine and overseeing entire networks - but it should not be implemented without critically thinking about both security and ethics.

Q

Chat bots are now becoming a common place app/facility for most companies; do you think we will see bots becoming a new target for hackers?

A

Bots have been a target of hackers for years. In the early days of company chatbots, misconfigurations could be abused in bizarre ways to expose private parts of a network that the bot was connected to. There are vulnerabilities surrounding bots exposing other customers’ information with the right set of commands, and extra caution is required when you implement a bot that allows file upload. It’s certainly a valid attack vector and should be properly audited and secured, just like all other parts of your network.

Investing in people, rather than checking security boxes, is the solution smaller company that has lesser security than you, perhaps allow time for proper auditing before adopting their code repositories and architecture. The worst case scenario is a small start-up has been backdoored by a sneaky hacker, and you’ve now inherited that problem without realising. It’s Christmas Day for the hacker as they’ve now scored a huge new target by just waiting patiently.

Q

As 2020 will see further adoptions / advancements in AI and autonomous vehicles, does this actually create increased opportunities to hackers – is the once relied on human element to grant access to systems no longer required?

A

Humans will always be the number one weakness of most attacks, including in the world of AI. If we imagine an autonomous war vehicle that makes targeting decisions for the user, a poisoning of that system (known as an adversarial neural network) relies on the human target having some sort of established trust in the AI. So really, we’re talking about abusing the link between the human mind and the AI by making people do something that is not in their best interest. That being said,

Q

What impact will 5G have on cyber-attacks?

And how can companies adapt accordingly?

A

5G is a mixed bag when it comes to security. It renders many common cellular attacks useless, but allows a more fluid attack surface. What we’re talking about here is allowing already vulnerable pieces of equipment to connect to each other faster, and therefore be more easily targeted. So, it’s not the architecture of 5G itself that’s the problem, more the fact that critical national infrastructure will now be more interconnected. The EU has conducted a coordinated risk assessment of this, but I’m sure, like all new developments in technology, it will result in some new and interesting hacks.

Q

Is it truly unrealistic to ever get ahead of the hackers?

A

A defender has to win every time; an attacker just has to win once. It’s unrealistic to aim for a magical world in which you’re unhackable - it’s impossible. What people need to do is accept that hacking may occur and attempt to drastically reduce the chance of it happening, and be prepared for optimal damage control should it occur. Ask yourself: do we have backups? Is our sensitive data properly encrypted? Are our systems up to date and regularly audited? Do we have the right individuals applying critical thinking to our security 365 days a year? If you can solve these problems, you’re already ahead of 95% of everyone else.

MODERN

INSURANCE

|

13

INTERVIEWS

Q

What should be the priority when it comes to distributing investment / protecting assets? What is the strongest defence against cybercrime?

A

Let’s use ransomware as an example of asset/monetary theft. If you’re a company that holds sensitive information, you need to make sure that you know where it is, in what form it’s held in, and where its backups are located. That sounds like obvious advice, but I constantly hear; “oh yes, we’ve got that covered!”, and then the ransomware hits and the company is toast. You can’t have single points of failure. So many companies do, and that’s why ransomware is so profitable: victims pay the ransom because they have no other choice. Now, when we’re talking about the security of your customers’ information, you need to make sure you’re encrypting their personal information (especially passwords) properly! I advise every CEO that’s reading this to immediately call up their security team and ask exactly what methods are being used to encrypt user data. If the answer doesn’t include a comprehensive rundown of the algorithms and design principles that have gone into making sure your customers are secure - including a threat model of the worst case scenario of a database being leaked - something is seriously wrong.

Q A

A defender has to win every time; an attacker just has to win once

|

Q

How often should companies be testing their own vulnerabilities and should this be conducted internally or externally? What are your own findings / experience of this?

A

Companies should thoroughly test any new software/ hardware before it goes live. Running a scan four times a year for generic bugs and reporting 0% vulnerabilities looks good on paper but is a sure-fire way to eventually get blindsided and hacked. If you’re large enough, you should have an internal team tasked with analysing potential threats every day as your company scales. That doesn’t mean you should invest millions into the latest threat intelligence snake oil products and call it a day - cover all your bases by first performing external audits, then bringing talent inhouse. If you’re a smaller company, bug bounty programs are a great way to get started at a cheaper cost, and you may end up finding unexpected talent along the way.

When building a defence against cybercrime, what failures and weaknesses do you continue to see repeated?

Too many large companies see security as a checkbox that must be ticked to meet regulatory standards, and an annoyance that is occasionally dealt with once or twice per year. This isn’t good enough. It’s also, in certain GDPR cases, seen as criminally negligent. Security is something that needs to be constantly on someone’s mind and always moving forward.

That’s why hiring dedicated experts is key. As the leader of a large entity, whether it be the private or public sector, you need to be able to organise yourself in such a way that means you have staff constantly evolving your defences and staying on top of emerging

14

threats. Even sending your developers to hacker conferences for a different perspective is a good idea! There are many branches of high level, extremely complex IT-related careers that never actually overlap with security, and converging these methods of thinking is an excellent move.

MODERN

INSURANCE

Jake Davis

is a Hacker and Security Expert.

WELCOME WELCOME TO TO THE THE WORLD WORLD OF OF DIGITAL DIGITAL ENGINEERING ENGINEERING & & SPECIAL SPECIAL INVESTIGATIONS INVESTIGATIONS

OUR OUR CORE CORE BUSINESS BUSINESS

EASYCLAIM EASYCLAIM

EXPERTISECHECK EXPERTISECHECK

SPECIAL SPECIAL INVESTIGATIONS INVESTIGATIONS

We blend Technology with We blend Technology with ‘Experts’ to create a market ‘Experts’ to create a market leading motor claims proleading motor claims propositions. Our core services positions. Our core services include Advanced Triage, include Advanced Triage, Digital Engineering and Digital Engineering and Forensic Investigations.

Forensic Investigations.

A white labelled web A white labelled web app to capture customer app to capture customer images which are then inimages which are then interrogated to allow highly terrogated to allow highly accurate advanced triage accurate advanced triage for any claim. for any claim.

Seamlessly blending Seamlessly blending Technology with Human Technology with Human Intelligence to technically Intelligence to technically engineer 100% of motor engineer 100% of motor claims without compromise. claims without compromise. . .

Specialist investigators with Specialist investigators with the bespoke expertise to the bespoke expertise to determine causation, capdetermine causation, capture forensic information, ture forensic information, provide detailed reporting provide detailed reporting and secure documented and secure documented evidence. evidence.

We’re invested in technology, but it’s our experts who make a difference when it matters.

We’ve partnered with Concirrus to bring predictive analytics and automated FNOL to motor claims, to reduce the frequency of accidents and the cost of claims.

Global solutions

Local expertise

sedgwick.com/uk

INTERVIEWS

Shaping work to inspire engagement

Perry Timms, Founder and Chief Energy Officer of PTHR, is a global and TEDx speaker, author and consulting advisor on the future of work. Speaking with Modern Insurance, Perry brings his experience to the insurance industry, discussing new business models, energy management, and modern methods for employee engagement.

For many years now, we’ve moved to be more concerned with the customer experience than merely sales targets as indicators of success – so it is now with employees and engagement. With so much evidence that says engaged employees equates to productive organisations, how do we still have so many disaffected people surely impairing the success of our businesses?

Is work totally broken? Do we need a radical change, brought on by the latest digital and automation tools, to force an evolution?

Or will this deliver a great jobless time cast with social unrest and further unfairness? Whatever the version of the future that plays out most strongly, it must be more than what we currently experience!

We need more employee engagement in ‘shaping the way work is’ and how people are recruited, their jobs, careers, rewards, development, and ultimately their fulfilment and achievement; adapted to the 2020 world and beyond. Invite your people to share what they feel about their future, and what they’d like to participate in to help create that future. Engaging employees with designing a future they are interested in is much more likely to not only retain top talent, but also attract new talent.

We’re far beyond commanding and controlling everything.

Now we need to explore it together, learn together, and adapt together

MI: In recent years there has been a big push on Agile working - do you think this way of working has been adopted sufficiently to maximise the benefits? Are the perceived benefits the same as the reality for many businesses?

A: To answer the first part about adoption, then no. What I mean by this, is that people have played around with a bit of Agile, but sometimes what they really mean is flexible working – not having a fixed desk or station, etc. They call this agile work. Now, I don’t. I call it remote work, or flexible work. Then there is the Agile principle of Sprint – the whole thing gets wrapped up in technology development and left to the techies. But it is actually a brilliant way of compressing time and involving people in different ways, to be more imaginative and creative. Nowhere near the amount of companies as I would have hoped, have adopted this method for projects and problem solving. It should be bigger than it is, but it is getting there.

MI: As Chief Energy Officer, you are all about leading energy. How important is energy management, and what top advice would you give to ensure success?

A: There is no such thing as time management, only energy management. You can’t manage time. It just happens. But you can manage your energy within what you do, and what you need to do. What I’m experiencing and seeing is that people are flat out, totally committed to what they are doing. They’re also exhausted.

So, there’s a tension building as they are not performing as well as they could be… because they’re so tired. But they’re so into their work, they don’t want to drop a gear. In my opinion, systemically, we have a problem. People are working beyond what is sensible.

MODERN

INSURANCE

|

17

INTERVIEWS

We need to think more about how we can regenerate our energy, rather than using it, stocking it up, using it, stocking it up, and so on. We need a cyclical movement throughout the day where we can stop, think, recalibrate, re-energise, then go.

I talk about a different rhythm, as the current job design is that from the moment you clock in, to the moment you go home, you need to be at it 100%. Sure, we recognise a break for lunch because you might pass out. But otherwise, the workplace can be a bit unforgiving about breaks and momentum. It seems like if you’re there from 8am until 6pm, it’s heroic and good. But this is not wise. We need to be strategic in how we can break ourselves up in terms of the time, energy, and focus we have during the day, to optimise what we do. We need a better rhythm, not just ‘go until we drop’.

MI: Are new business models having a direct impact on leadership, and do traditional hierarchies still deliver the results they once did - or are collaborative business models proving to surpass this?

A: I have a little bit of a hope for new models, as more collaborative businesses are already starting to show up. The reason I say a ‘little bit of a hope’ is because there are still people who are almost stoic in the belief that what we have now has worked for so long – why wouldn’t it continue to work? But the overall culture and norms currently, and the way the world is shaping up, is rendering that original model increasingly less likely to succeed. So, people are holding onto it not because they believe in it, but because they are comfortable with it.

The collaborative business models are exactly where people should be going. But people are very steel in gripping to what they know, so it won’t change as quickly as it could do. A lot of people deny this change, a little bit like climate change denial or flat earth beliefs; scientists are telling them the truth, but they still cling to their beliefs. We still have a battle on our hands. But the more places I go to, the more work I get involved in, it’s all about collaborative business models - it’s that collective energy, collective knowledge,

18

|

MODERN

INSURANCE

collective application, collective learning, etc. We’re far beyond commanding and controlling everything. Now we need to explore it together, learn together, and adapt together.

MI: The difference between an engaged and disengaged workforce is vast and the balance can tip at any point - what can and should be done to monitor and sustain engagement levels?

A: I think one of the ways we’ve fallen into a bit of a trap, is the belief that engagement is something we can do to people.

We can make them engaged or we can create the conditions where they’re more engaged. The latter is probably the nicer way of looking at it, yet right now there are so many choices and dynamics at play, that this is not the right frame of mind.

Recently, organisations have begun very regularly asking a few clever and pointed questions of their people: how do you feel right now? What is getting in the way? What do you like a lot that you’d like to see more of? What should we be doing less of? Very quick, punchy, and illustrative points that the company can then look at and analyse. Then they can say: we should be pushing that button, we’re missing a trick there, we’re not paying attention there, etc. This is much more responsive, it’s a sentiment-based survey rather than a very factual download of a hundred and five data points.

When it comes to engagement, we should be talking about what is happening right now, so we can do something about it.

We can put it right. Then, your people know they are listened to, and there are people responding to what they may be troubled by. They will see a workplace that has something about it.

Then, they choose to engage with it, and maybe be a little bit more creative or determined or committed or whatever it may be. That is the simple nature of the deal; we kid ourselves in thinking that asking a hundred questions once a year will be enough to build an action plan from. It is too slow, too generic, and people rarely feel like they have had their voices and opinions recognised. Punchy, direct, inclusive, and maybe even random is more likely to make a difference.

INTERVIEWS

Something I’ve seen in the democratic world is where, instead of having politicians making policy directives or laws, they convene citizens assemblies. They give these assemblies expert opinions, then break them up into randomly selected – but still very inclusive and diverse – groups and ask them to come up with recommendations. We need to see the workplace version of that, which means it is not just held in boardrooms. People can see and understand that decisions and key activities are set in motion by their peers. One day that may be them, too. I think that creates a really engaged workplace.

There’s nothing more engaging than people who can shape their destiny

MI: Looking to the future what role will gamification play in increasing employee engagement?

A: I prefer to use the term; Game Mechanics. I think that’s what goes on in the context of a game; there are mechanics which are channelling an action and forcing prompts to create tension, creativity, etc. There are certain aspects in a game construct designed to invoke emotional, psychological or intellectual reactions. If you’re encouraging people to participate, some of this is great as it invokes a sense of competition and connection.

But don’t design it from this view, design it from the point of: what are we after? How can we make it as easy as possible for people? We may increase the breadth and range of people who respond, if we apply some game mechanics. I wouldn’t like to overstate how important it is – it’s non-crucial but very helpful.

MI: Is it more important to focus on the present, or should we be constantly looking to the future?

A: When people think about their workforce and their people, they often think about what they can offer them, and what they came here to do. I think we could and should start to think about the future of the workplace, the things we do and who we need to help us create this future. We seem to recruit people for right now, and what’s happened previously when we should be recruiting for the edge of right now, and what’s coming up.

So instead of focusing on what engages people now, we should get into some pre-emptive ways of understanding what’s going to be engaging people in the future, especially here with the work we do. Then I think we start to create a different energy about why people come to you; not because of what you have right now, but because of what you could become. There’s nothing more engaging than people who can shape their destiny.

Is insurance ready for that? We don’t know. But it is such an interesting time for insurance, it has a prime opportunity to keep the existing industry model, and build another one whilst things are changing quite drastically, and then gradually pour over into the new one. I’d be really interested to see how much of the future the insurance industry is daring to look into.

You can find Perry online at www.pthr.co.uk or on Twitter (@perrytimms) and his blog Medium.com/@PerryTimms.

Perry Timms

is the Founder and Chief Energy Officer of People & Transformation HR (PTHR).

MODERN

INSURANCE

|

19

www.autowindscreens.co.uk

VEHICLE GLASS REPAIR

STRESS

FREE Online booking Technician tracker Live web chat Mobile payments Pre- and post-video inspections Our digital customer journey gives your policyholders total control of their appointment.

01246 223129 salessupport@autowindscreens.co.uk

EDITORIAL

BOARD

The Future Expert Insurance is an industry to build a career in, where knowledge and experience creates expertise. But with the current development of AI tech and intelligence systems, how will the definition of an ‘expert’ change?

As someone with a seemingly endless desire to learn, I have loved the opportunities presented working in insurance. If I am honest, I have also very much enjoyed being regarded as a bit of an expert in various things, it’s a nice feeling when people come to you for guidance on an issue. It really does add to your job satisfaction.

So, will all that be out of the window in the future? Will machines replace the need for years of service and study, taking away that opportunity for improved self-esteem?

The answer is yes, to a degree. Surprisingly, it’s something I am pleased to see. Our industry has lost masses of experience and expertise over the years, and the trends are that this will continue.

Intelligence systems powered by AI are undoubtedly the future.

Imagine the benefits of having an ‘old fashioned’ expert floating around a call centre to answer your new recruits’ every query – new systems can go one better. You don’t even need to ask the expert

the question, they know what you need to know and present it to you instantly whilst still on the call.

So, who or what will be the expert of the future? Those systems, obviously. But let’s not forget that someone needs to populate them in the first place, so maybe the system is just a way of distributing and supercharging their knowledge?

I have another view. Some people say that learning is just changing what you know, to me it’s more than that; it’s not just having knowledge, it’s knowing how to apply it in real circumstances. So, my definition of an expert in the future will not just be those loading information into intelligent systems, it will be those of us taking advantage of those systems and being able to adapt, modify, make pragmatic decisions, and deliver for our customers in the real world.

Not a world of ‘computer says no’, but one where the computer works in tandem with the human expert, which sounds quite a satisfying approach to work to me!

David Williams,

Managing Director, Underwriting & Technical Services, AXA Insurance (UK).

Business Agility to Mobilise Ability We all know that businesses must embrace change in order to survive. Gone are the days when sticking to a single core competency was enough, when big companies dominated and locked down distribution channels to protect their key strengths.

Today, change, complexity and uncertainty are prevalent - making the rate of change faster than ever, as markets fluctuate and dominance is fleeting. There’s an irony that today’s only stability in sustainable advantage is business agility; the ability to nimbly adjust to, and take advantage of, market and environmental opportunities.

Here are three reasons to pursue business agility to create heightened stability: Your customers expect it.

In a world of instant-gratification, where customers are no longer satisfied with the status quo, an agile framework provides the tools to lead change in a productive and cost-effective way in order to satiate customers’ appetites. Rapidly responding to customer demands, and doing so with flexible solutions, is essential to delivering an outstanding customer experience which delights and retains customers.

Think about the way the Uber app disrupted the traditional black cab market. Work quickly or customers will go elsewhere.

If you don’t, your competitors will.

Agility is your tool to outperforming your competitors, who are slower to act when customers await innovation and evolution. An agile business deftly manoeuvres market change, nimbly adjusting to and taking advantage of market opportunities, whether adapting existing services or moving the entire industry forward.

Consider Blockbuster and Netflix – if you can’t act quickly to fill the gap, your competitors will.

Standing still is not an option.

Business leaders yearn for ongoing stability and a future that is clearly laid out before them, yet the world no longer works in that way. Landscapes are moving and businesses must bend, pivot and change to adjust to powerful market forces and internal business change. This requires entirely new ways of thinking which are both original and ground-breaking.

Amazon competed with traditional retail models; introducing lean manufacturing techniques to product ordering and shipping, whilst adding value on a colossal scale. Their impressive growth is a direct result of thinking differently. And their legacy? The ongoing evolution and disruption of the face of consumer buying, and a huge dent in the backbone of our economy - the high street.

Andrew Chandler, Sales Director, FMG.

MODERN

INSURANCE

|

21

Dynamic REHABILITATION Helping Patients REACH THEIR GOALS High Standards and SERVICE EXCELLENCE Visit dorset-ortho.com to find out more about our Complimentary Rehab Assessment

Tel: 0800 433 2239

STRIVE FOR BETTER.

Nationwide Clinics

EDITORIAL

BOARD

Human and/or Machine?

Insurance is a low engagement purchase for many, especially motor insurance. Policyholders frequently avoid reading the policy details, they make assumptions and don’t take time to consider what the cover actually provides. This lack of understanding extends further by the infrequency that a policyholder makes a claim. It’s a distressing situation - which doesn’t occur very often - using a service that the person didn’t pay much attention to when they bought it!

Helping navigate all of these concerns is most definitely a person to person experience. Whilst consumers happily defer to technology more and more, preferring self-service checkouts to actual people for example, an insurance claim is a very different interaction. The distress or crisis, coupled with the lack of understanding, makes that personal reassurance so important.

However, that doesn’t mean that what our claims people are doing hasn’t changed already. For me, it’s a question of bringing the best of both worlds; harnessing the efficiency and accuracy advantages of

technology with experienced claims people to drive a better customer experience and better commercial outcomes for the insurer.

One of the ways we’ve done this within motor claims is by considering first call resolution. With the objective of resolving the customers’ needs within the first contact, what information do we need or what processes should we follow so the customer won’t need to contact us, or another party, within the claim again? It’s a powerful tool for designing processes and technology in claims.

This approach sets a framework by which technology is used to help us answer questions and gain understanding as quickly as possible within the claims journey. Data can be organised and interpreted by AI, but that doesn’t replace the value a person brings; it enhances it.

It’s not a case of one being better than the other - human or machine. It’s about designing systems that bring the benefits of both to make efficient, empathetic decisions to minimise the disruption for the customer, and drive down costs for the insurer.

Jason Tripp,

Managing Director, Coplus.

Excellence in Customer Care The industry’s core mission at the moment is improving customer care, how will new job roles (Head of Innovation, Synergies Director, etc.) be facilitating excellence in customer service?

The big customer retention battle is undoubtedly exercising the minds of many in our industry. As the focus is ever-more honed to ensure every aspect of the customer experience is examined and improved, there’s a need to ensure the right people are ‘owning’ that challenge. It is heartening to see that many insurers are bringing in new experts who understand what motivates a customer to stay – or go – following any sort of interaction.

Once you get beyond the price, the claims journey is front and centre when it comes to understanding what makes a customer want to stay or leave a motor insurer. Everything from the FNOL, to the options offered to get a policyholder who’s been involved in an accident moving again.

One area where customer satisfaction could be enhanced – particularly in relation to the claims experience – is by offering more mobility options to the policyholder when their car is off the road.

That must start right from the get-go. Surely a customer who is offered a private taxi hire back home or on to their destination is going to feel more cared for – and less stressed – than being offered a seat next to the vehicle recovery driver in his cab!

It should also extend to the mobility options offered while the vehicle is under repair or being replaced. Think about those living in urban conurbations who may well have chosen the engine size of their car based on local parking and congestion rules. If they suddenly find themselves in a car that isn’t of the same spec, could they face fines or increased parking costs?

Don’t forget the growing electric revolution! Early adopters of EVs are passionate about their choice. They probably made it for ethical as well as economic reasons. So how will they feel if the replacement vehicle they’re offered isn’t electric... and maybe even diesel!

There are definitely barriers that the insurance sector needs to overcome to adopt a more flexible, choice-driven approach to replacement mobility. A key challenge is creating a supply chain that can fulfil multiple needs - that probably means widening the supply chain rather than sticking to a sole-supply model.

But with a new generation of experts entering the sector, I firmly believe these barriers can and should be overcome.

James Roberts,

Business Development Director, Insurance, Europcar Mobility Group UK.

MODERN

INSURANCE

|

23

EDITORIAL

BOARD

Bridging the gap - how automation is changing the future of motor claims Vehicles of the future are just around the corner - fully automated with little or no driver assistance - and many predict that they will significantly reduce, if not eliminate, motor claims as we know them. What do we need to do as an industry in the meantime, to cope with the existing mix of unconnected, intelligent and autonomous vehicles?

The human behind the wheel is the most unpredictable thing in a vehicle. In 2018, more than 80,000 crashes occurred in the UK due to human errors: suddenly braking, poor manoeuvring and loss of control1.

Many companies are already using telematics or black box technology, which monitor individual driver behaviour and can help to reduce premiums. Others are using dash-cams, which provide crucial evidence in determining cause and liability. However, we need to proactively reduce the number of incidents and speed up the process once a collision occurs.

There is now a space for AI to bridge the gap. Through black box and/ or cameras, predictive analytics study driver behaviour, meaning that poor behaviour can be addressed, preventing motor incidents before they occur. Drivers, fleet managers, risk managers and insurers can

receive alerts or reminders about bad driving, further reducing the risk.

Alongside this comes automated first notification of loss (FNOL).

Using the technology already in vehicles, when an incident occurs an alert is triggered automatically with the claims team. Not only does this eliminate delays in accident reporting and helping the driver in an emergency, it reduces claims spend. The earlier a claim is notified, the more likely the claims handler will capture third party details and guide them through the claims process.

Sedgwick recently announced its partnership with Concirrus, the creator of Quest Automotive, a big data analytics platform designed to improve insight into risk for the motor insurance market. This partnership is the first-to-market proposition for predictive analytics and automated FNOL in motor claims, giving fleet managers, risk managers, drivers and insurers a greater understanding of driver behaviour and risk.

Through adopting solutions like these, the industry can navigate the gap between traditional motor claims and the very different future of automated vehicle claims.

Stephen Bevan,

Client Director, Sedgwick International UK. 1. Department for transport - Contributory factors for reported road accidents (RAS50) https://www.gov.uk/government/statistical-data-sets/ras50-contributory-factors

Lenders’ Finance Agreements Since the end of the British Bankers Association/ Association of British Insurers Bank Agreement in 2012, we’ve seen a sharp increase in the number of requests for bespoke amendments to policies at the request of lenders. These are creating challenges for insurers and brokers, due to the complexity and nature of these requests.

When a property or business owner approaches a financial institution for finance or re-finance, the lender will often require a method to secure their interest in the individual property or business.

Part of the finance agreement for the loan may require the lenders interest to be secured in the borrower’s insurances. The request from the lender usually takes the form of a letter which sets out various obligations and requirements, including confirmation that the insurances are set up in line with the facilities agreement. It’s the facilities agreement which contains the detail about how the borrower’s insurances should be arranged.

Assignment’ where a whole policy is assigned to a third party and the insured loses all rights, but would still need to pay the premium.

Policies can also be adapted through ‘Non-Invalidation/Non-Vitiation’, meaning that a policy remains in force even if the insured breaks their policy conditions. Composite policies are also sometimes requested, which enables both parties to make independent claims for the same loss and the policy would pay twice.

WHAT CAN BROKERS DO TO HELP? • Understand the potential implications of lenders agreements, and make customers aware well in advance of completing any significant financing/re-financing.

• Explain the complexity of the situation and explain that there may be an additional charge if the insurer is widening cover at the lender’s request.

• Remember existing clauses and agreements at renewal, particularly if changing insurer.

Some brokers are pre-empting issues by ensuring their client’s lenders are advised upfront of what their insurers will/won’t accept.

It’s unlikely that a standard insurance policy will meet the facilities agreement requirements. Therefore, in order to receive the loan, the borrower’s insurers may have to make amendments to policy coverage.

For now, the situation continues to evolve. Increased understanding in the market is vital to ensure all parties to the contract fully understand the implications.

WHAT ARE LENDERS ASKING FOR? Lenders are asking for a variety of methods to secure their loan.

These range from the non-invasive ‘Noting of Interest’ where the lender’s interest is recorded in the policy document, to ‘Policy

Further details on the variety of methods and implications are available on allianz.co.uk/broker

Paul Higham,

Head of Property Insurance, Allianz.

MODERN

INSURANCE

|

25

For cutting edge innovation, marketing-leading data insights, and the collaboration your business needs, contact us.

EDITORIAL

BOARD

Training the Next Generation As the claims industry addresses the shortfall of talent in its ranks, the training of the next generation of experts has never been more important. The Crawford Academy, launched on 1st January this year, aims to equip this next generation with the skills to progress their careers and handle increasingly complex claims.

One of the top challenges we face is the aging profile of senior adjusters across the claims sector. There are a significant number of loss adjusters across the sector who are aged 55 and over, meaning that many of our most technically competent people will leave the loss adjusting arena in the coming years. The demand for high quality claims expertise is outstripping supply, and this problem is here to stay.

At the same time, the nature of the business continues to evolve, and insurers increasingly expect a higher level of expertise from their claim managers.

At Crawford, we are handling bigger and more complicated losses all the time. Meanwhile, rapid changes in the risk landscape mean the nature of the claims we deal with is evolving all the time. The adoption of new technology, for example, will drive different outcomes for our clients and Crawford itself.

Therefore, it is essential that we develop a deeper breadth of expertise across our industry to meet these demands. In our Major

and Complex Loss team at Crawford, for example, we have recruited 24 additional adjusters, surveyors, loss mitigation experts and claims specialists just over the past year.

Preparing future leaders.

People are our biggest asset and we want to build on that as much as possible. On 1st January, we launched the Crawford Academy to upskill our people, encourage career progression and enhance performance.

Millennials will change jobs every five years on average, but as Crawford is a very diverse business, we want those employees to make their career changes within our organisation, rather than moving elsewhere. Giving our people the skills to move from one team to another is a primary goal of the academy.

Trainees will receive technical training, one-to-one mentoring from experienced adjusters and take part in accompanied site visits. They will get the opportunity to be involved in some of the largest losses we deal with - the kind of claims that make the news - and to be part of the teams that deal with those losses from cradle to grave.

We have some of the best loss adjusters in this profession, and they have committed to passing their skills down to the next generation, creating a real legacy for Crawford and the claims business we’re in.

Alister Jupp,

Head of Crawford Global Technical Services, UK.

Expertise and AI Since ancient times the insurance industry has always relied on its expertise. The Ancient Babylonians, who granted loans to merchants that didn’t need to be re-paid if their shipment was lost at sea, built a career on their knowledge and understanding of risk. I’m certain however, that even in 3000 BC there were Babylonians who were concerned about the potential threat to their livelihoods from the innovation of others!

Snapping to the present day, we’re witnessing a global proliferation of emerging technologies, such as Artificial Intelligence and automation, which bring with them huge benefit but could also be viewed as a threat to the work currently performed by our people. This is a simplistic view, as when this technology is deployed correctly and augmented with powerful data, it can substitute and replace the very simple and time-consuming manual tasks that steals time away from specialists. The outcome benefit is two-fold; faster and better decisions are being made which fully utilise the expertise of the individual.

Taking what we do at ControlExpert as an example, our core philosophy is that this combination of both artificial and the human intelligence of our ‘experts’ is a true recipe for success. Rather than taking a ‘man versus machine’ approach, we leverage ‘man and machine’ via Artificial Intelligence and other emerging technologies acting as tools in an expert’s arsenal, which quickly guide them to the areas which deliver disproportionate value and benefit to our partners.

The effects and benefits of Artificial Intelligence in the insurance sector are already visible. The insurance professional of the future will not be replaced by a machine, but they will harness new talents - which will naturally come from being part of a ‘digital by default’ generation. Their backgrounds and qualifications in Tech will become the new standard as companies adopt higher levels of AI and automation.

As a result, a technical insurance specialist of the future will be flexing a completely new set of skills, making them far more effective for their customers and finally freed from the boring tasks which will thankfully be consigned to the pages of history books.

Paul Sykes,

Regional Managing Director, ControlExpert UK Ltd. MODERN

INSURANCE

|

27

Replacement vans.

We’ve got it covered.

You trust us with your car replacements, but did you know we have an extensive van and specialist fleet capability too?

With 72 dedicated van stations and 11 super sites stretching the length of the UK, our fleet of the latest Euro 6-compliant vans and specialist vehicles are available to book from 1 day to 3 years.

Available within 4 hours of ordering and a delivery and collection service to make your life more convenient, our specialist van team will ensure you receive exactly what you need.

Email: business.support@europcar.com or call 0371 384 0140 to find out how we can help.

EDITORIAL

BOARD

Where does human knowledge fit into the future of the claims process?

Will it become immaterial?

From everything we read or hear, it does sometimes appear as if we are on the path to making humans largely redundant from the claims process - except for those gifted technical wizards who will programme and keep the machines running.

Artificial intelligence will fundamentally change all our lives. In the insurance market, AI will be utilised for better customer service and improved chatbots, data crunching to improve risk assessments and quotations and auditing to reduce claims in the first place. From FNOL systems with the ability to download telematics data/dashcam footage, to metadata used to identify incident information such as GPS coordinates - AI is rapidly becoming a core element of the market. We are all going to be using voice analysis for automated fraud checking, as well as speech recognition for identification and DPA checks.

Before we completely write off us poor human beings, it is worth considering the differences between machine and human intelligence. Quantum computing and deep learning may be at the forefront of scientific development, but it is all a relatively basic principle: if you can break down a task into data, machines using AI will be able to learn it.

The problems come when you ask the machines to think in the abstract, by applying common sense or transferring knowledge gleaned from one area to another. Self-driving cars are still struggling to replicate human experience of driving despite having driven tens of millions of miles. Machines may win at processing vast amounts of data, but humans are vastly superior in making informed, abstract decisions based on instinct, common sense and little information. They each function completely differently and so should complement one another rather than one cancelling out the other.

Frictionless claims made digitally and with fewer human checks will pose a major challenge. With the digitalisation of fraud in the new claims process systems, aided by undue political haste and a lack of forethought in their conception, humans must still have a central role. Technology-based solutions will play a major role in combatting fraud and enhancing the customer experience, but the thinking human being will still be needed to provide common sense checks, empathy, expertise and knowledge.

Donna Scully,

Director, Carpenters Group.

Will the constant tech evolution dictate what makes an ‘expert’?

Will experience be enough?

Commitment to meeting the requirements of new and ever more complex vehicle technologies is a fundamental requirement of any expert in the automotive repair supply chain. However, whilst continual investment in technology, training and infrastructure is essential, developing close and wider partnerships is critical to providing a truly expert service.

Stakeholders need to look further afield for these partnerships than they may have done traditionally. Everyone involved in the automotive sector, from insurers to vehicle glazing specialists, needs to have access to better and more comprehensive information on individual vehicles in order to deliver a cost-effective service. The rapid changes taking place in vehicle technology make it virtually impossible for any one organisation to keep up effectively on their own. Partnerships and shared knowledge are now more important than ever.

National Windscreens, for example, have developed close partnerships with vehicle manufacturers, insurers and industry organisations such as SMMT and Thatcham. These allow us to use our expertise to influence future developments, and put us in an ideal position to invest in remaining ahead of the technology curve.

One such example is a system developed by National Windscreens that identifies the exact glass required and if ADAS (Advanced Driver Assistance Systems) are fitted on an individual vehicle, with 99.5% accuracy. This ensures that we get the right glass first time avoiding any wasted appointments - and can advise if time needs to be allowed for ADAS camera calibration following a windscreen replacement. We use this information as part of an ‘expert’ planning process, allowing us to undertake windscreen replacement and calibration during the same appointment, ensuring the most timely and cost-effective approach for the policyholder.

With increasing vehicle complexity demanding higher levels of technical competence and the more stringent standards on compliance in virtually all areas – from health and safety, to working practices, to materials and personal data – we will undoubtedly see consolidation in the ‘expert’ supply chain. Smaller suppliers will increasingly struggle to meet the level of investment needed to deliver the required standards, and this will inevitably lead to a fewer number of suppliers offering a greater depth of capability. Experience alone will certainly not be enough to be an expert in this sector!

Lisa Pugh,

Business Development Director, National Windscreens.

MODERN

INSURANCE

|

29

we’re handl group.

A mixture of start-ups and established industry leaders, dedicated to disrupting, improving and evolving the legal, insurance and healthcare markets.

At the heart of everything we do is a desire to enable growth, deliver change, innovate and ultimately set the standard for what businesses within our industries can achieve.

Find out how we can help your business to unlock its full potential.

Call us on 03300 947 346 Email info@handlgroup.co.uk handlgroup.co.uk

EDITORIAL

BOARD

Insurance is an industry to build a career in, where knowledge and experience creates expertise. But with the current development of AI tech and intelligence systems, how will the definition of an ‘expert’ change?

The insurance industry is entering a new world.

With so much technological change going on, it’s clear that insurance providers are going to be placing a premium on employees with digital expertise.

Automation and customer self-serve, means there is going to be a decreasing need for human intervention, which will arguably remove some of the lower levels of claims positions, such as junior claims handlers.

Through our LexisNexis Risk Solutions research, the “Future of Claims” study shows consumers are actively seeking greater levels of self-serve and a more seamless claims experience, at the same time as trust, personalisation and timeliness.

Artificial intelligence and machine learning are coming into the claims world to build these efficiencies. However, these technologies require more data and new sources of data to be effective. AI and automation is growing, but the technology isn’t fully utilised yet, meaning more jobs will change in the years ahead.

The drive to implement predictive or prescriptive models is only going to increase, and it will occur in the context of the current shortage of data science skills. Other technology trends such as the connected car, smart buildings, electronic sensors for risk mitigation,

increased preferences for self-service when claiming online and the rise of automated claims logging and settlement - are all going to have an effect on the required skills.

Part of the solution to this re-skilling of the claims function is, of course, going to come in the form of finding new ways to attract the young tech talent of the future. With existing staff, there’s a need to encourage learning and ensure the new paths of career progression are clearly identifiable.

Putting better data in the hands of claims teams is going to be key to driving towards a better claims experience and faster verification, with the ultimate goal of the genuine ‘one-click’ customer experience. Given the number of people who work in the claims space, automation and machine learning will remove a lot of the mundane from claims handlers and will really give insurers the opportunity to focus on great customer service, at one of the most stressful points of contact for most individuals.

I believe the claims department of the future is not only going to be leaner, but more proactive, more data-driven and higher-skilled, than ever before.

Alan O’Loughlin,

Director, Statistical Modelling, International Markets, Insurance, LexisNexis Risk Solutions.

Is there any advice you would give to young starters in the industry?

Firstly, working in automotive glazing is an amazing career with massive potential to develop and progress within the insurance industry. I started with Auto Windscreens as a trainee technician in 1992. I am proud to say it made me who I am today - our fabulous training academy and the experience I gained provided me with the opportunity to extend my knowledge of the market, the company and our customers.

In recent years we’ve seen new technologies and innovations shape what we do, but despite all of this, one thing remains unchanged the human touch. For me, it’s about having honesty, integrity and getting back what you put in - most of all, it’s about people. No matter what skillset a young employee has, there’s training available to bring them up to speed. I’d recommend they get to know their product inside out and focus on service. I’d urge them to listen to mentors and those around them, because they have the experience to draw on.

Keeping your eye on the marketplace and ‘what’s next’ in the industry is vital. But it’s the ‘here and now’ that’s important to today’s customer and in the face of such change, a knowledgeable, reassuring and friendly voice goes a long way. As I’ve worked my way up through the ranks, I’ve been appreciative of the fact that a car is the first or second most expensive item people own. Whether I’ve worked on a basic popular model, or a top-end Ferrari, I’ve been focused on ensuring we provide the best service and journey.

Times might be changing and technology advancing, but one thing’s for sure: whatever the car of the future looks like, glass repairs and replacement will always be needed. During a claim, a customer will want to feel that they are in good hands and that the experience will run smoothly.

Finally, my advice to a young person? It’s not an easy journey but with hard work, passion, drive and good guidance you can achieve anything!

James MacBeth,

Managing Director, Auto Windscreens.

MODERN

INSURANCE

|

31

EDITORIAL

BOARD

What is currently being done to encourage and nurture new talent?

2019 saw a seismic shift in talent requirements.

Traditional roles are toppling rapidly in an array of industries; from professional services like accountancy, legal work, teaching, some medical operations, to sales & services and manual tasks such as security, military and farming.

Artificial Intelligence (AI) in its various forms, is sweeping a significant proportion of traditional jobs away, with remarkable economical, accuracy and time benefits. It is depressing for those who may have spent many years training for such professions, but it has spawned a host of new roles in data, machine learning, robotics, cyber analysts, genetics, quantum computing, AR & VR and cyber security.

It is therefore essential that new talent is focused on contemporaneous or near future roles rather than traditional.

We work in conjunction with the Liverpool Enterprise Partnership to embed this message into schools; our workforce of the future. We have learned from tech-savvy cities around the globe to integrate technology into lessons. Who would want a copywriter who didn’t know Word, or an engineer who couldn’t use Excel? The importance of technology within schools cannot be underestimated.

At apprentice level, we sweep up almost anyone with technology skills, as IT is the backbone of the entire company. From workflows;

new developments and projects; hardware and telecoms; security and storage our traditional companies have evolved into tech firms.

We are ensuring that traditional roles are re-skilling. For example, sales and marketing used to involve phone calls, networking, emails etc. Whereas there are significantly better methods today, so we retrain them to understand funnel marketing, social media use, demographically driven marketing.

Modern and tech driven skills are important, but we believe that the work-place culture is just as significant. Not just a case of buying a pool table, but actually listening to the unique needs of the humans.

We are fiercely proud of our culture and have shunned many outdated practices. The work needs to be done to a high standard, within SLAs, plus we aim for the client to be delighted with our products and services, but does it matter what our staff are wearing?

Does it matter what time they start or finish? We have dogs in the office, beer and wine, we work from home, duvet days and most importantly actual personal development.

We believe that a diverse mix of contemporary skills development, attitude & culture is the best way to nurture our talent to face the challenges of 2020 & beyond.

Nik Ellis,

Managing Director, Laird Assessors.

Laird’s automotive solutions are designed to increase efficiency, reduce costs & speed key-to-key times for their partnered clients.

Our keen interest in technology has enabled their transformation into a company pushing boundaries within the industry. Our teams appreciate the power of collaborative technology, with many solutions released over the last year; some benefiting our client directly such as API connectivity, total loss & repair management, FNOL triage & our recently upgraded online portal. Others have helped our client’s customers such as our 24/7 smart booking app, chatbots & imaging apps.

With multiple awards in customer service & technology, Laird recognises the importance of complimenting tech with well trained, happy & motivated teams.

T: 0151 342 9961 or 0207 118 9961 E: enquiries@laird-assessors.com F: 0151 342 7844

2019 winner winner 2019 Technologyinnovation innovation of of the the year year -- service Technology service provider provider

hello@claimtechnology.co.uk hello@claimtechnology.co.uk

SECTOR

Paul Nicholls,

Chair of Motor Accident Solicitors Society (MASS) and Senior Partner at Nicholls Brimble Bhol Solicitors.

Digitalisation of the expert Experts in most fields have been having a tough time in recent years. Their knowledge and advice have been regularly rejected for being opinionated, self-interested or running contrary to the wishes of large vocal groups. Although in very particular circumstances, the same has been happening to experts in the claims process.

In its wisdom, the Ministry of Justice has decided that the expertise and knowledge of claimant solicitors is largely unnecessary and is putting in place a system riddled with obstacles. Claimants will still have the option, we are told at every opportunity, to seek expert legal advice, but the practical and financial hurdles will make it significantly less likely. Insurers will still be armed with the legal muscle of defendant solicitors, making the likelihood of that concept, inequality of arms, several factors more likely.

There is the ridiculous situation where LIPs are expected to understand and process the implications of expertly produced medical reports on issues of quantum and causation. Under the future process, these are not just soft tissue reports but could be on a variety of injuries.

The digitilisation of claims through the new online portal was to be expected.

The rapid scientific advances in artificial

Experts – covert recordings At FOIL, we have members with legal expertise in all the disciplines and lines of business that make up the wide spectrum of insurance claims. However, within this article I do not propose to highlight the extensive expertise within FOIL’s Sector Focus Teams, but instead look at a recent case which affects insurers – namely the covert recording of medical examinations.

A Master in the RCJ suggested potential input from FOIL and APIL (Association for Personal Injury Lawyers) in the case of Mustard v Flower (2019) EWHC 2623QB which has generated considerable interest and comment from many quarters.

The Master admitted into evidence covert recordings made by the claimant during her medical examinations by the defendant’s experts. This ruling applies also to a recording made by the claimant of her neuropsychological assessment by the defendant’s expert, part of which the expert knew was being recorded but part of which was recorded inadvertently, when the claimant intended to stop recording but failed to do so. The claimant made no recordings of her examinations by any of her own experts.

The Master was critical of the claimant’s actions which he labelled “reprehensible”, but nevertheless concluded that the probative value of the recordings weighed in favour of them being allowed in evidence, despite relevant obligations from the Defendants.

In a much-quoted passage from the judgment, the Master urged that that the sooner that there can be some kind of protocol agreed between the Association of Personal Injury Lawyers and the Forum of Insurance Lawyers which governs the recording of medico-legal examinations the

SOAPBOX

intelligence means that huge amounts of data can be processed rapidly to determine the validity of an accident claim.

Whilst any attempt to simplify the process is to be welcomed in many areas, it must not be at the expense of expert legal assistance. Humans still have the edge in problem solving, seeing the bigger picture and in providing support through reassurance, sympathy and advice – and spotting the claims that require further attention and investigation. Away from the cold calculations of a claim, experienced legal advice should still be essential to the process of navigating accident victims, many of whom will be traumatized or in physical pain. To relegate these critically important experts to a non-essential status will be a retrograde step and can only further damage justice.

Anthony Baker

is a Partner at PLEXUS and President of Forum of Insurance Lawyers (FOIL).

better; ‘It is in the interests of all sides that examinations are recorded, because from time to time significant disputes arise as to what occurred. In that situation, it is important to have a complete and objective record of the examination, which is subject to appropriate safeguards and limitations on its use. It is desirable that the parameters of such recording should be on an “industry-wide” agreed model which caters for the many issues capable of arising and, I might add, which pays careful attention to the containment of the costs that might potentially be generated’.

FOIL members have become aware over recent months of the propensity for claimants to record their medical examinations by defendant experts and insurers should be mindful of this practice.

Professor Gus Baker, Consultant Neuropsychologist, is in the process of drafting guidelines for such practices for the Division of Neuropsychology (DON) and there are fewer than 100 medical practitioners working in this important medico-legal field. Once the draft guidelines from the DON are in the public domain then these will assist insurers, lawyers, medico-legal experts and the Courts grapple with these tricky sensitive issues.

MODERN

INSURANCE

|

35

SECTOR

SOAPBOX

Expert Claims Service Delivers Results

Andrew Gibbons ACII, Managing Director of Mason Owen Financial Services Ltd, Chair of Industry Claims Initiative on behalf of BIBA.

On 13 February 2020, the Industry Claims Working Group, chaired by BIBA, met at the beginning of its 7th year of existence. Around the table were some of the most senior claims professionals; brokers, insurers, loss adjusters and loss assessors as well as other industry experts.

The group was formed to deal with adverse publicity in the claims arena, and to liaise with the FCA in relation to the thematic work that they were undertaking on commercial claims.

While the thematic work is long since complete, and the group’s recommendations implemented, the remaining two terms of reference were to try to improve the customer journey and to generate a more positive narrative as to how the industry’s claims service has helped customers.

The 2020 BIBA Manifesto, like past manifestos, devotes a section to claims and has helped to guide the focus of the group towards better outcomes for customers.

The group has researched the common reasons for claims repudiation and advised how customers can avoid such an outcome, keeping abreast of emerging issues like the Whirlpool Tumble Drier/Washing Machine recall to ensure that policy wordings were being interpreted across the market correctly. Ahead of the implementation of the Insurance Act, it held discussions focused on how insurers would apply the principles of the Act. We continue to consider any unintended consequences of the Act and how best to respond.

Gordon Dalyell,

President, Association of Personal Injury Lawyers (APIL).

Lobbying in relation to the Civil Liability Act, implementation of the portal and continued pressure applied to ensure the remaining legislation is passed is in focus. And we should not forget the part played by the Claims Working Group in encouraging Non-Damage Business Interruption (NDBI) terrorism. Despite NDBI not being available at the time of the Manchester or Borough Market attacks, some insurers did actually pay claims arising in the absence of cover, as it was the right thing to do. Similarly, those same insurers paid non-damage claims in Whaley Bridge when properties were threatened by a potential dam burst.

When experts are brought together, positive things happen. Our last meeting fell in between Storms Ciara and Dennis. It was no surprise that insurers had deployed their flood teams with the aid of adjustors ahead of Storm Ciara and were anticipating where Dennis would do its worst before it hit. While the storms have now moved on, policyholders can be reassured that this working group of experts is doing its utmost to ensure customers are at the heart of the industry’s thinking.

Reform Delay The excuse that an effective way of resolving conflict in the new portal cannot be found is just not good enough. It treats injured people with contempt. Failure to include an effective and fair way of resolving conflict in the new portal pits the inexperienced individual against the seasoned insurer without a safety net, hoping everything will go without a hitch.

It assumes that the injured person will simply accept without question what the insurer says has happened, who is a fault, and how much compensation is fair. Or, if

36

|

MODERN

INSURANCE

the injured person refuses to accept what they are told, it is assumed he will be able to take his case to the small claims court.

This means paying a fee upfront and facing down the lawyers of the person who has injured them, probably without being able to afford a lawyer of their own to help navigate a court system which is simply not designed to deal with these complex issues.

SECTOR

Dr Matthew Connell, Director, Policy and Public Affairs, Chartered Insurance Institute (CII).

SOAPBOX

Softer Skills for Better Performance

At the Chartered Insurance Institute, we have been testing expertise in insurance for over 100 years, but the way we think about it has changed more in the last ten years than it did in the previous ninety.

For many years, the taught elements surrounding underwriting and claims drew heavily from the disciplines of law and accounting. Meanwhile, the real skills that underpinned these core roles, such as risk assessment, communication and empathy, were picked up ‘on the job’.

However, there are three forces that are radically changing this picture: research, technology and competition.

First, ‘softer’ skills such as understanding human behaviour and communicating effectively, have become subject to much more rigorous analysis since the days of our grandparents. Subjects like psychology and sociology are becoming more closely combined with other disciplines to create new bodies of knowledge, such as behavioural economics.

As a result, we can teach, learn and measure skills like listening, communicating and influencing more effectively than ever before, and ask new ethical questions about how we use these skills.

Second, technology is gradually helping us to automate a lot of routine processes and is giving us rapid access to far more knowledge than ever before. This means

being the gatekeeper to processes and knowledge is a much less venerable position than it used to be, further highlighting the importance of skills like risk assessment, communication, empathy and influence.

Finally, the competitive landscape has changed. The rise of the tech giants has partly been due to the vastly increased processing power of computers. The success of firms like Amazon, Apple and Google has also been based on a highly sophisticated understanding of communication and behaviour.

To compete with this kind of firm, insurers do not have to become computer programmers, but they must become far more aware of how technology and behavioural insights can improve their performance as professionals.

So, the insurance experts of the future will be very different: they will have a conscious and measurable command of softer skills that were rarely mentioned in the old textbooks, and they will use these skills to deliver more to their clients than ever before.

For more Modern Insurance Magazine insights, news, trends, blogs, events news and stories FOLLOW US ON @ModInsuranceMag Modern Insurance Magazine

Check out our new website for the latest interviews and blogs moderninsurancemagazine.co.uk To get in touch and find out how you can be featured in the magazine call Rachael on 01765 694167

Counter Fraud Detection | Delivery | Deterrent Our dedicated fraud team works strategically to target fraud across Casualty, Disease, Healthcare and Motor.

Our approach is simple but effective, using proven techniques and innovative new technology to detect fraud, challenge through delivery and then deter those who perpetrate it.

We can help you target fraudsters, reduce indemnity spend and protect your brand and customer base. Get in touch at counterfraud@weightmans.com or visit our website weightmans.com/fight-fraud for further information.

Paul Debney, Partner

www.weightmans.com

F E AT U R E S

Industry Innovators Interview:

Attestiv Q A Q A

How would you describe Attestiv in three words?

Digital, media, authenticity.

Why Attestiv?

At Attestiv, we are on a mission to put provable authenticity into all digital media.

Deepfakes and AI-enhanced images are not only a social threat, they are also an IT threat that affects organisations making actionable decisions based on photos and media. As AI tools to edit media proliferate and organisations undergo digital transformation, exposure is ever-increasing and calls for a new set of tools and platforms to protect organisations from fraud and/or reputational damage.

Utilising artificial intelligence and blockchain technology, Attestiv assures the validity of digital media captured by any person or device - helping organisations of all types build trust and transform their business with new services, cost savings, and fraud prevention.

the savings that we bring through tamper-proof, self-service processes, not only helps insurance organisations save costs, but also improves efficiencies immediately

Modern Insurance caught up with Nicos Vekiarides, CEO and CO-Founder of Attestiv, to see how Attestiv are looking to do things differently for the industry.

Tampered data and altered photos expose organisations and businesses to fraud and security threats. Attestiv provides protection from these growing threats by both preventing and detecting any falsified or fake photos, videos, and other media.

The Attestiv Platform operates within an ecosystem across companies, providers, partners, and end-users. The platform serves as a foundation for digital transformation in the multi-billion dollar insurance (carriers, agencies, adjusters, etc.), IoT, public safety and other sectors.

Q A

What makes Attestiv different from other start-up companies?

We are different in 4 ways:

1. Our mission and focus is to protect organisations from a new breed of photo and video fraud that until now has not been well addressed.

2. We are an experienced team that has led prior startup successes and public companies with extensive cloud, SaaS, storage, cybersecurity & enterprise expertise.

3. The Attestiv platform is powered by patent-pending technology. It enables advancements in self-service, autonomous and outsourced processes by analysing and validating information including photos, videos and data. Our technology includes perceptual fingerprinting technology for digital media, enterprise security, a ledger-agnostic and storage-agnostic architecture.

4. We integrate seamlessly into existing processes. Besides offering applications, we provide APIs that work with organisations’ existing processes and workflows. In mature industries, we find it is very important we allow customers to maintain existing processes that use digital media and data - but with an added level of protection.

MODERN

INSURANCE

|

39

F E AT U R E S

While there are projects to combat the emergence of fake photos and videos with detection technologies - that alone isn’t enough

Q A

What would you identify as the gap in the market that Attestiv aims to fill?

For insurance markets, we are addressing the substantial fraud that exists in P&C insurance (estimated to be $40 Billion annually in the US alone). While difficult to get a precise breakdown, a meaningful portion of that is due to exaggerated claims, fake claims and missed opportunities to reduce claims leakage.

For related markets, we prevent and detect the growing emergence of photo and video fraud, disinformation, and help give organisations confidence in building out their digital transformation plans. With over one trillion photos captured annually - many of which are to fulfill business purposes and are taken by mobile phones - there is a strong need to discern what is real, from what is fake.

Beyond fraud protection, we enable much broader use of selfservice processes for insurance, using tamper-proof photo and video workflows from mobile devices, saving costs and creating exceptional mobile user experiences. Specifically, Attestiv has enabled selfservice quoting, claims and renewals for several insurance agencies using authenticated, tamper-proof photos taken by customers using their own mobile devices. The cost and time this process saves is considerable, and a trusted foundation like Attestiv is a key enabler.

With Attestiv, a variety of stakeholders in the insurance ecosystem benefit from (1) fraud reduction, (2) significant time and cost savings, (3) a mobile-first customer experience and (4) enterprise

40

|

MODERN

INSURANCE

security, interoperability and compliance. These stakeholders’ range across insurance agencies, carriers, independent adjusters and insured customers.

A good example of this is our inspection app for independent adjusters., to whom we offer a mobile app that reduces on-site property inspection time by more than 50%. This is done by reducing photo report generation and email submission time to the carrier, and by using validated photos, all parties (adjuster, carrier, customer) benefit. I suppose in this day and age where a pandemic is a new reality, it would be important to note that Attestiv provides a “touchless” experience, avoiding the typical interactions required for these processes.

Q A

What were the main challenges on standing out and establishing yourself in a competitive market?

Bringing our technology into a regulated, enterprise business space, such as insurance requires significant domain expertise in IT, cybersecurity and privacy -- and products that offer compliance with regulations. We deliver a solution that is tailored for our target market.

Another challenge is providing customers instant gratification, knowing that the fraud savings are a long-term ROI. In this regard, the savings that we bring through tamper-proof, selfservice processes, not only helps insurance organisations save costs, but also improves efficiencies immediately.

F E AT U R E S

Attestiv will be the foundational platform for any organisation using photos and videos for business-critical purposes

Q A

What’s unique about the culture at Attestiv?

As a team, we share a common enthusiasm about helping solve the problem of fake digital media and enabling our customers to embrace new technologies with confidence.

We promote an open and collaborative culture, encourage all employees to take part in decision-making and contribute their own expertise and experiences into our processes. We are very transparent, giving everyone the same view of the business that we present to our board. We are a small and growing team. We work hard, but have a great time doing it and very much enjoy working together.

Finally, we are all passionate about customer satisfaction and providing a great user experience across all of our products.

Q A

Where do you see Attestiv this time next year?

We anticipated in a year’s time, Attestiv will be the foundational platform for any organisation using photos and videos for business-critical purposes. The realisation is starting to emerge that there is a threat associated with AI-enhanced media and data, and more and more firms will be forced to take action.

Q A

How is the wider industry responding to challenges in your area of the market, and how are you tackling these?

While there are projects to combat the emergence of fake photos and videos with detection technologies - that alone isn’t enough. AI tools are making fake photos and videos nearly undetectable, which in turn is driving an urgent need for prevention technology to ensure media has not been tampered with from the point of capture.

Sometimes, the approach from incumbents is ignoring the issue, or hoping it goes away. That sort of indifference is not a good long-term strategy and like any startup company, we often find ourselves educating our customers on the threat and why there is a need to address it.

Q A

How are existing customer buying habits forcing change?

I believe a lot of businesses have been embracing digital transformation, without the concern of new cyber threats in the form of altered digital media. In an insurance industry where the estimate of fraud hovers around 10% of claims, organisations may worsen the situation by adopting new technologies, without taking precautions against these new threats.

Looking even further forward, we see ourselves becoming the standard for authenticity of digital data and media, particularly in the enterprise space.

Q A

What advice would you give to anyone else looking to disrupt the industry?

Always listen to your prospects and customers to ensure you are meeting their needs and you are solving problems that rank high on their list. Stay committed to your customers, and let them influence your vision. In fact, use this to your advantage as incumbents often lose touch with their initial clients, creating the void in the market you are filling.

Finally, be open to learning new things along the way... even after years of experience, it’s amazing how much we continue to learn every day.

Nicos Vekiarides

is the CEO and Co-Founder of Attestiv.

Due to digital transformation and increased competition, customers have growing expectations for businesses to provide them services faster, easier and more inexpensively. Attestiv, can provide these efficiencies, as well as ways to mitigate risk for the company.

MODERN

INSURANCE

|

41

F E AT U R E S

Using Video in Insurance in 2020 John Ridd, CEO of eviid, discusses high-speed claims, an operational safety net, deep fakes, and the rising utilisation of video within insurance.

A

ll big insurers and smart players in the claims supply chain have been using video in their claims processes for a couple of years now.

LV=, for example, is using our video and streaming technology to reduce the number of home claims requiring a site visit by 80%. In their motor business, they’ve co-developed our Uploader product with us, which provides 50 times faster access to policyholdersubmitted video like dash cam footage, allowing LV= to validate and settle claims much faster.

There are three clear reasons why I believe video will be a hot topic in insurance this year – reflecting some of the risks and opportunities ahead.

1. Business continuity and social distancing At the time of writing, the UK is still in the low hundreds of confirmed Corona virus cases, and insurance and claims businesses are busy updating their business continuity planning, readying themselves for social distancing recommendations from the Government.

Video has quickly become a key pillar in these crisis plans, with some of our claims customers now offering policyholders the option of a live and recorded video assessment, over a visit to their home. One client has seen take-up of this assisted self-service option treble within the first couple of days of offering it in the context of social distancing.

To protect their workforce, many of our customers have ramped up the use of video for inspections and loss adjusting, carrying these out remotely or sending as few people as possible to site and avoiding repeat visits. Experts and third parties can be patched in on live and recorded calls, ensuring decisions can be made there and then.

Both for business continuity and social distancing, the ability to shift the majority of the claims process away from the office is key.

Our customers are ensuring now that their claims handlers are set up to access eviid remotely from home, either directly or with eviid technology integrated into their claims management platforms.

Video can help you speed up your claims life cycle and, crucially, get to the heart of the claim faster

2. Claims in the fast lane Another challenge (or opportunity!) this year will be the launch of the small claims portal as part of whiplash claims reform. It is expected that this will exert huge pressure on claims processes to maintain margin. Speed will be of the essence.

Video can help you speed up your claims life cycle and, crucially, get to the heart of the claim faster. Whether you’re representing the at-fault party and are trying to bring the other side into your supply chain, or whether you’re an agile credit hire business keen to make the non-fault party an offer they can’t refuse: live video allows you to get right in there, establish the facts, triage, patch in decision makers and come to a settlement.

Today, clever uploader technology like ours allows you to gather third-party evidence – dash cam and CCTV footage, mobile phone video, etc – in a fraction of the time it takes for somebody to pop it on a USB stick and post it to you.

3. But what about fraud?

The more we rely on digitally created visual evidence, submitted remotely, the greater the opportunity for fraudsters.

‘Deep fake’ videos have so far mainly been a matter of entertainment, but the spectre of quickly improving deep fake technology raises serious questions about how insurers accepting video and photographic evidence will authenticate policyholdersubmitted media.

Doing this manually can require laborious detective work that can easily eat up the commercial benefit of using remote evidence in the first place – especially for smaller claims. There is currently no way of easily authenticating digitally recorded media after the fact.

That’s why we’re offering patented tamper-proof watermarking as part of our product. This technology makes it impossible to tamper with eviid-generated footage without leaving a trace.

Insurers and claims businesses investing in video technology today should keep a firm eye on the emerging opportunity for fraud, and ensure verification and authentication of digital evidence is part of their video strategies.

John Ridd

is the CEO of eviid.

MODERN

INSURANCE

|

43

F E AT U R E S

FRAUD IN THE MOTOR & DISEASE SECTORS Modern Insurance caught up with Weightmans to discuss the current trends in Fraud. We spoke with Jeff Turton, Principal Associate, on fraudulent claims in Motor, and Paul Debney, Partner, on fraud in Disease.

Motor FRAUD n 2018, the Insurance Fraud Bureau (IFB) published its Insurance Fraud Strategic Threat Assessment, which outlined what it regarded to be the most significant insurance fraud threats. It reported that, in motor insurance, the organised ‘crash for cash’ scams which have for so long been the bane of the industry, have been overtaken by the threat of genuine claims that involve elements of opportunistic fraud.

I

Whilst the layering of genuine claims with fraudulent elements is not new, we have detected a significant upturn in claims which include contrived, unnecessary or exaggerated heads of loss, especially where credit hire or ancillary expenses - such as physiotherapy charges - are claimed.

One of the challenges of tackling layering is that it can appear in almost any claim, and traditional methods of screening for fraud may not be fit for the purpose of detecting it. Plus, perhaps motivated by a historical view from some areas of the judiciary that a fabricated or exaggerated head of loss should not be fatal to an otherwise genuine claim, insurers have sometimes considered it to be commercially astute to consider compromising a claim despite the presence of a dishonest element.

In our view, the most effective way in which insurers can tackle the increase in layered claims is to develop a collective approach to detecting and delivering robust outcomes in these claims and, once done, deterring claimants or professional enablers from bringing them in the future.

Detection It is very rare that there is a single silver bullet available to undermine a claim in full and detection must extensively utilise

44

|

MODERN

INSURANCE

industry shared data, together with technology and technical expertise. This approach underpins our success, and collaboration with insurers is vital in achieving these goals. With the use of structured and unstructured data, along with social media, we have been able to identify a greater number of potentially fraudulent claims and link those involved in the perpetration of these claims with much more confidence. Natural language processing has given us the opportunity to predict the probability of fraud and is the next step in the evolution of fraud detection.

The most effective way in which insurers can tackle the increase in layered claims is to develop a collective approach Delivery As we have previously reported, there are signs that the courts are now more willing to make findings of fundamental dishonesty and deploy S.57 Criminal Justice and Courts Act 2015 to dismiss genuine PI claims which contain elements of dishonesty. Just recently, the High Court has dismissed a claim in which the claimant was genuinely injured but he lied about the disposal of his car after the accident in question. Insurers should take comfort from this shift in approach and collectively send a signal to claimants and enablers by robustly defending claims where dishonesty has been detected, to trial.

F E AT U R E S

Disease FRAUD espite rapidly falling numbers, the key fraud challenges in disease claims still arise in noise induced hearing loss matters, primarily because fraud is not obvious and detection not easy. The majority of such claims are historic, and in many there is little or no direct evidence to counter the claimant’s allegations. Our experience of dealing with almost 30,000 deafness claims and detailed analysis of that data has allowed us to determine exactly what red flags to look for and what verification to seek.

D

We have learned that claimants often try to “shave the rough edges” off their claims. By, for example: • Claiming that work was noisy when it simply wasn’t; • Exaggerating noise exposure at employers, for which insurance cover has been traced and reducing it (sometimes to nil) at employers where none is known; • Conveniently forgetting that hearing protection and/or training was provided; • Neglecting to mention: • A previous claim for deafness; • Significant non-occupational noise exposure from shooting, motorcycling, playing in or listening to bands; • That they have known about the hearing loss for very many years (such that the claim is statute barred), or specifically alleging that such knowledge is only within the last 3 years.

• Presenting unreliable medical evidence, such that an independent test reveals only the normal deafness associated with ageing and no noise induced hearing loss; or • Any combination of the above.

•

Deterrent There are various ways to make a dishonest claimant feel the pinch. One way, thanks to the QOCS fundamental exception under CPR 44.16 (and other QOCS exceptions), that insurers can do this is to hit them in the pocket. The industry should be encouraged to adopt a best practice approach to their claims handling strategies, so that all insurers are thinking about the recovery of costs, and how best to robustly enforce those costs, from the moment a dishonest claim is detected.

In addition, insurers are encouraged, in appropriate cases, to play their part in delivering the industry counter fraud message, by bringing committal proceedings and private prosecutions and by making referrals to the Insurance Fraud Enforcement Department.

Whilst such action involves a cost, insurers will feel the benefit in the long-term when it is fully understood by prospective fraudsters that there are real risks to bringing dishonest claims.

Collaboration was a key reason why the industry succeeded in reducing the threat of ‘crash for cash’ and there can be no doubt that the challenge of layering can also be met by insurers joining forces to tackle it.

Jeff Turton

is the Principal Associate at Weightmans.

We have learned that claimants often try to “shave the rough edges” off their claims Any one of these “rough edges” can be enough to “kill” a claim when identified and properly challenged – they have led us to achieve an overall nil settlement rate in excess of 70%.

Total noise claims notifications in the market rose from around 20,000pa in 2010/11 to over 100,000pa in 2014 and 2015. They have fallen significantly since 2016 and are now back to levels last seen in 2010/11. The fact that claims numbers have fallen at such rate is testament to a defendant market that has collaborated to raise awareness and take the profit out of these claims, forcing those perpetuating fraud to look elsewhere for an easier return.

Despite market eagerness, collaboration has been hampered by business and regulatory restraints; such as data protection legislation, intellectual property issues, unique selling points of solicitors and insurers and possible cartel complications. These have all hindered the sort of big data sharing that might have accelerated the demise of this claim type.

Paul Debney

is a Partner at Weightmans.

MODERN

INSURANCE

|

45

F E AT U R E S

The Personal Injury Debate In this issue of Modern Insurance, we hosted a Personal Injury forum with some of the industry’s experts. Though opinions can differ greatly, and we don’t always agree with what we read, these debates allow our readers to see expert opinions and insights into the topic at hand. So, let’s meet our forum experts and see what they have to say. reforms, will injured people acting for themselves find it harder to recover QFollowing damages – further to that, will the damages they receive justify their efforts?

Chris Chatterton: Yes, they will, but it all depends on insurer behaviour. Some insurers might make claiming extremely easy, yet others will make it difficult and look for opportunities to refute claims. Either way, it will be harder than it is now - where all the work is currently done for them by a solicitor.

Consequently, I think many people will turn to claims management companies for assistance – and they will fill the void left by the law firms. Of course, many of these organisations might not provide services and advice at the standard we see across the legal profession today. In this case, the current system of one side trying to maximise the claim and the other trying to minimise it will be perpetuated.

That said, I think that the level of damages proposed will still make it worthwhile for people to claim, particularly if the process is quick and simple. One particular area that needs to be looked at is fraudulent claims; if insurers make settling too easy, then these could significantly increase.

Two big areas are still uncatered for in the ‘new world’. The first is ‘how do I get treatment if I’m injured to help me recover?’ and the second is ‘what do I do if some aspect of my claim is disputed?’.

Here, the market is crying out for two things; and at handl Group, we think we have found the solutions to these problems: • A simple digital-based treatment solution that comes at an appropriate market price that both sides agree works. Take for example Speed Medical’s recent introduction of EQL’s digital triage tool ‘Phio’ into its rehabilitation services, providing early intervention and a customer-centric solution to injured parties, and allowing insurers to appropriately manage the claims process; and • A user-friendly, fast arbitration process that can be endorsed by both sides, introducing software ecosystem Claimspace, which settles claims that cannot proceed on MoJ portals, streamlining processes and increasing productivity.

Michael Lewis: The loss of the ADR facility in the new portal is a significant blow, which will inevitably mean that unrepresented

46

|

MODERN

INSURANCE

claimants will find it harder to recover damages. Whilst details of any replacement mechanism are awaited, the noises coming from the MOJ suggest that there may be an oral hearing at Court on liability based on information submitted in the CNF. Not only is this adding more Court involvement into the process rather than less, it runs the risk of making the customer journey that much more expensive, longer, and forbidding. The test portal may have a welcoming user experience, but the basic design and flow for making a claim for losses will - in my opinion - regretfully lead to unrepresented claimants making errors that will result in them being unable to claim and receive their rightful damages. Furthermore, the reduction in damages will have a knock-on effect on the amount of time and effort unrepresented claimants will put into pursuing a claim, such that they will either abandon their claim, or instruct solicitors to take over the handling of their case.

Jason Tripp: There certainly will be disparity post-reforms between a personal injury motor claim and other types of injuries. These are the unintended consequences of the reforms that impact on genuinely injured claimants as well as those exaggerating or claiming frequently.

Whilst the current legal system for dealing with injury compensation is arguably expensive for the industry it does provide an effective route to recover damages.

Post reforms, a consumer without motor legal cover that includes small claims handling and alternative dispute resolution (not in scope for the new Litigants in Person portal) will have to manage the claim themselves.

This is certainly going to be more difficult and more costly, either they will have to paid for legal assistance separately or do everything themselves - including going to court if liability is disputed.

We have a responsibility to ensure we remove or reduce barriers to genuine claimants, putting the customer first and building a service around that principle, is what we need to do now.

F E AT U R E S

How might the industry Q work better to educate the consumer on the claims process in order to better manage customer expectations?

Jason Tripp: One of the problems that we have in the insurance industry is how little attention consumers tend to pay to their insurance needs.

It’s been just over 20 years since the Access to Justice Act enabled consumers to benefit from conditional fee arrangements. Our collective expectation is that if we are injured then we will be able to get help for free. The reforms will completely change this and consumers aren’t aware.

There is a real risk of companies failing to meet the FCAs Treating Customers Fairly principles if they haven’t considered the products and services they are selling and how they will protect customers under the new regime.

It’s imperative that all insurance providers working with consumers understand this and have trained staff, simple content and literature to articulate this properly. Consumers need the opportunity to decide if they want to take additional legal cover that includes a small claims handling service, to ensure assistance is available without extra cost should they be injured in a road traffic accident.

I think companies need to consider very carefully if their customers are going to be ‘let down’ if they have a policy that doesn’t give them the assistance they previously enjoyed for free, and what that could mean for complaints and brand reputation.

Chris Chatterton

is the Chief Commercial Officer at handl Group.

role will technology have in affecting Q What access to justice?

Michael Lewis: Technology can and will have a transformative effect on access to justice. Other areas of industry have welcomed technological developments, but the conservative nature of the law (both on the claimant and defendant side) has prevented it being as fully adopted as it should.

Cost pressures will inevitably drive the greater adoption of technology.

Lawtech solutions, such as our Claim Technology platform, will usher in a truly touchless digital claim, providing better client journeys, faster claims processes, and improved profit margins allowing lawyers and insurers to concentrate on value-added work, whilst giving a sense of control to clients - helping to maintain and improve access to justice.

giving unrepresented claimants a wider Q Will choice of experts be confusing?

Chris Chatterton: Yes, it will. At the moment, all they need to do is choose a PI solicitor, all of whom come well qualified. In a world where they have to do things themselves, they may turn to a claims management company – but how will they know which one is best able to assist them?

Not only that, if they pursue claiming themselves, they will also have to source a medical report – central to the claims process. Currently this whole process is managed for them by a range of experienced medical agencies but in the new world, they will have to make their own decisions without any market knowledge or data. And of course, if their claim is disputed, they may be faced with paying the bill themselves (something that doesn’t happen today).

Subsequently, when it comes to treatment - if they need it - claimants need to be aware of how to source it, pay for it and claim it back. This detail is all unknown/unclear. And finally, who do they turn to if the insurer disputes some aspect of the claim? At the moment there are no clear escalation procedures and defined outcomes.

So, at present, the new system will work fine if everything goes according to plan and the case is simple and settles quickly … but unfortunately, this wouldn’t always be the case.

Michael Lewis is the CEO of Claim Technology.

Jason Tripp

is the Managing Director of Coplus.

MODERN

INSURANCE

|

47

F E AT U R E S

Leading in a New Era of Connectivity with Bain & Company Bain & Company - a global consultancy helping the world’s most ambitious change makers define the future - created a customer behaviour and loyalty in insurance survey in 2014, and have repeated the survey every year since. Modern Insurance spoke with Mário Conde, a Partner based in their Amsterdam office, about the results of the 2020 survey.

In the UK, 40% of customers have a connected device but very few are connected to the insurance service

E

ach year, Bain & Company conduct a customer loyalty survey across the industry. Last year, they covered 16 countries and 170,000 customers – 17,000 of which were UK customers.

The first headline of the survey is ‘Loyalty’, which drives customer lifetime value. This concept is extremely important for insurers: both life and P&C. When considering the customer lifetime value of promoters, it is six times higher than that of detractors, and is driven by customers who stay longer with you. People who buy more products and tell their friends.

Loyalty, which we measure through NPS (Net Promoter Score) is a number that really delivers that customer lifetime value.

In terms of where we see the market, while there is a large gap between loyalty leaders and laggards, most insurers operate in largely undifferentiated markets – the UK is no exception.

In the UK, NPS scores fall at 5-7% in P&C and just 2% in life.

Compared to figures of the US - 30% plus – this is quite low.

Millennials are a challenge; they are 5 percentage points lower that other customers. They are more digital, are more likely to switch, and are more willing to buy insurance from tech companies. When we think of differentiation, we see insurers doing two things to drive loyalty and relevance. Insurance is a low-touch industry, so creating reasons to interact with you customers begins that drive. Then we see it through ecosystem services, which is a current trend in the industry, where insurers are adding more benefits beyond the core insurance products.

This serves other needs of the customer and creates reasons for engagement and interaction.

Q

The 2019 report states that connectivity and digitalisation is the way forward, that there is a strong link between connectivity and loyalty. Are insurers utilising this information effectively? Could they do more?

A 48

|

MODERN

INSURANCE

There is definitely a connection between the ability to deploy connected devices and the ability to gather data

F E AT U R E S

For P&C, we’re looking at 80% of customers having a digital interaction at the research stage, which rose to 90% last year and interact with customers. We are seeing customers with connected devices interacting six times more than customers without – and they have 25% more products from that insurer.

In terms of how insurers are actually taking this opportunity: in the UK, 40% of customers have a connected device but very few are connected to the insurance service. So, if you have a connected home device, it’s very unlikely that it was provided by your insurance company. If you have a connected dashboard in your car, it’s usually the OEM or a tech company providing it. When we think of the relevance of insurers within the connected device base, there is a lot more they could be doing. They’re falling behind tech companies and OEMs, who are taking the lead in putting connected devices in the hands of customers.

Q

Millennials are a huge opportunity for insurers looking for new consumers – how do their expectations differ from existing customers?

A

What we see of millennials being served in the market today, is that their demand is quite hard to fulfill. They are certainly a customer with different needs, and they tend to be more dissatisfied. As mentioned previously, they fall at 5 percentage points more dissatisfied than other consumers. The UK is a highly digital market, but millennials are still 10% more digital. They’re more likely to switch and shop, they are more likely to change after one or two years. So, it’s a real challenge for the industry to build a long-term relationship. One third of millennials are interested or willing to buy insurance from tech companies in particular – Apple is one of the first names that shows up when we ask customers whether they’ll be interested in insurance from non-traditional providers. This is clearly

a problem, and no one has cracked this from a proposition standpoint, or from a delivering on expectations standpoint.

One of the points we believe contributes to this, is that expectation is not only influenced by peers and the industry, but also by other services the customer interacts with.

Insurers need to see themselves as competing with the digital experiences of Amazon, or Uber, or WhatsApp, as opposed to just looking to the neighbour and trying to beat them in an insurance game.

Q

How important is brand? Many consumers already trust companies, for example Amazon, how can insurers compete with those disrupting the market?

A

We developed, some years ago, a methodology to quantify the drivers of customer value. We call this ‘the elements of value’ - there are thirty elements that we think customers perceive as value from different products and services. When we ran the survey for insurance, asking what actually drives this customer value – what drives NPS – we were able to highlight what matters for customers. In P&C, the important elements are things like quality, rewards, access, saving time, saving cost, reducing effort, etc. We think of these are the elements that you can fulfill or not, and your NPS – your perception – will be driven by it. So, what matters most to customers of insurance today are the functional elements: cost, time, effort, etc. Then when we look at companies like Amazon, these are the elements that they are exceptional in. So, it is not a surprise that when we asked why customers would be interested in purchasing from nontraditional methods, like Amazon, they

MODERN

INSURANCE

|

49

F E AT U R E S

Insurers need to see themselves as competing with the digital experiences of Amazon, or Uber, or WhatsApp, as opposed to just looking to the neighbour and trying to beat them in an insurance game

cite similar elements: competitive price, ease of purchasing, strong reputation, and quality of service. The theme here is that there are a lot of these important elements that tech companies in other markets have already succeeded with. It is only a question of time as to when these advantages are deployed in insurance.

Q

Regarding incumbent insurers vs insurtechs: what is the playing field right now and how do you expect it to change? Will tech take over, or is collaboration the way forward?

A

In terms of incumbents vs insurtechs, this questions is really in two parts. One, we see real differentiation as a kind of leading indicator to potential winners in the future. Two, how can incumbents think about competing?

So, for differentiation, many insurtechs are still small and have not reached a large scale – it is hard to say what is really evidence of success vs incumbents. However, there are several things that insurtechs are extremely good at. For example, they build great customer obsession (essentially very, very high NPS). An example from another market

50

|

MODERN

INSURANCE

would be Root, a well-known insurtech in the United States.

They have an NPS score of over 80% versus a market with an average score of 30%. So, Root is a company that builds true customer obsession. When you check their Facebook, YouTube, and social media their customers are raving about them. A parallel in the UK would maybe be Monzo. Another aspect they do very well is their ability to be extremely efficient. This is due to their digital native architecture, there are no legacy systems or operating structures to deal with. Lemonade, in the US, has two or three times the number of customers per employee versus the average incumbent. They need a lot less people to provide just as good, if not better, a service. So those are two true drivers of differentiation; the ability to engage and delight your customers, and the ability to do it at a much more efficient level and/or lower cost. Despite their sizes, insurtechs have some significant advantages.

However, the growing trend of open architectures and ecosystems of capabilities, are allowing incumbents to react to insurtechs. This means being able to take the functionality that is out there in the market and plugging it into your own systems, providing services and technology that is just as good as some of these startups. For example: telematics technology. To build this from the ground up would take a lot of time, capability, and expertise. But nowadays there are a number of companies that are almost ‘plug and play’ telematics solutions. They bring you an app that is white label and ready, it’s easy to plug in, and easy to delight your customers without having to do it all yourself.

To take a step back onto the questions, on one hand, yes – there is extreme competition driven by firms who have completely reinvented the level of customer obsession and efficiency of the industry. But on the other hand, there is an increased availability of plug and play technology to be deployed on open architectures and allow the same capabilities and functionalities as startups.

F E AT U R E S

Q

Q

A

A

Could you elaborate on the report findings regarding the split between online and offline consumers? How can insurers adapt their business model to cater for all?

This is one of the key metrics we have been following over a number of years. Granted, in the UK over the stage of research and initial interaction, there was already a very digital market when we started the survey in 2014.

For P&C, we’re looking at 80% of customers having a digital interaction at this stage, which rose to 90% last year. In Life it’s a bit lagging, with 60% rising to 80%. Despite starting at a very high level, there has still been a significant increase over five years. Interestingly, when looking at loyalty – or NPS – per type of channel, we see that digital is still the lowest NPS score. But when you add offline channels, and create a hybrid journey, there is a rise in the NPS score.

Ultimately, hybrid experiences produce better results than digital. There are two explanations for this. One, the incumbents have not reached the level of digital experience that we expect and receive from tech companies, which is why digital only does not work well. Two, a hybrid experience tackles more key emotional moments of truth.

If you crash your car, and are panicked and nervous, do you want to use an app where you fill out a form? Or do you want to call someone who will help and talk you through the process? So, we think there is some magic in really tailoring the experience, and potentially using human touch in the high impact moments of truth.

How can insurers navigate the ‘increasingly stringent regulations’ on data – how can they build their consumers’ trust?

40% of consumers have a connected device, but only 10% in the UK are provided by or are sharing data with their insurer. But we believe there is an additional 40-60% of consumers who are willing to the idea of sharing data, even though they haven’t installed a wearable device, or home alarm, or camera yet. They are open to having these devices provided by their insurer and sharing data from them. In this evolving landscape, there are two important questions: how do you give the customer full control and transparency over the use of data? And secondly, what is in it for the customer?

Sharing data under my control, in transparent conditions is one part of the equation, and sharing it with a clear incentive of how this device is going to make the product and the experience better for me, is the other part.

The UK is a highly digital market, but millennials are still 10% more digital

Mário Conde

is a Partner at Bain & Company.

MODERN

INSURANCE

|

51

D in at aN aA ew na l y Er tic a s

F E AT U R E S

Andy Yeoman, CEO of Concirrus, is an expert at harnessing the power of advanced data analytics. Here, he considers the future of data analysis in a new era of connectivity.

Data analytics is a means goal, not an end goal 52

|

MODERN

INSURANCE

Q

How would you describe the Concirrus business model? Do you think this has been a factor in attracting young talent, given 60% of Concirrus employees are under 35?

A

Our business model as it faces the customer, and our business model that faces our employees are slightly different. As we face the customer, our business model is very much geared around ensuring that we add value to our customers. So, where we charge them, we do so on the basis that we add significant value. I think the industry statistics - which are consistent with our own insight – are that for every $1 we charge we should be adding $10 of value.

But the model, as it relates to our employees, is different. Attracting young talent in London is a challenge in itself.

We believe we are in a privileged position where we’re bringing about change in a global industry. We are supporting a 300 year-old industry, which has been operating in a certain way, through cutting edge technology. People are recognising that we are securing strong customer traction in the market, and they

undoubtedly find this attractive. In normal times, our working environment is also appealing, we are a very sociable team and encourage activities such as running, pub quizzes and a collaborative approach, both inside and outside of work. With our team currently working remotely, we have implemented an extensive program of team-building activities. We hosted our first live workout yesterday and we’re encouraging the team to exercise and get some fresh air. I also hosted our first remote meeting with the entire 80-strong team all joining via video/voice.

We’re running quizlets (mini-quizzes) throughout the week and so much more.

Q

We’ve discussed earlier in this issue who is the modern day ‘expert’, i.e. human vs technology, do you believe the need for highly experienced individuals in the insurance industry is being overshadowed by the power of data and the use of tech?

A

No, I do not. I think the technology we are seeing is enhancing the experience of the experts, rather than diminishing it. For example, if you

F E AT U R E S

We are entering an era where it is no longer a competitive advantage to have tech and data in the underwriting process were to play a game of chess against a computer, you would probably lose. If a grandmaster plays against a computer, they may well lose. But, if you have a grandmaster with a chess computer playing against another computer, they will likely win. So, it’s not so much human versus tech; it’s humans supplemented by technology. With the current pandemic, it’s never been more important to have a set of digital tools to support remote working and team collaboration.

Q

What is Quest?

A

Quest is the name of our product which, at its broadest level, is a digital underwriting platform powered by data analytics. Facilitating a remoteworking and collaborative approach, we supplement traditional underwriting decisions using static factors, such as from a marine perspective – how old a vessel is, where it was built, what type of vessel, etc; and allow decisions to be based on behavioural factors, i.e. how the asset is used. Quest combines more than two trillion data points with deep analytics of what behaviours that drive claims, and wraps it up into a very easy to use interface to improve underwriting results.

Q

What is the most effective method to implement data analytics?

A

Well, I would say that is via Quest!

But beyond that, the method is more about having clarity of purpose. The challenge with data analytics it that it’s a bit like decorating a house – you can decorate endlessly, but there will always

be something else to improve. The same is true of analytics. There will always be something else to analyse. We live in an age where there will always be more data, which will be more varied, more frequent, and more accurate. Data analytics is a means goal, not an end goal – you could keep going continuously. The best way to use data is to start with the end in mind, and have a very specific purpose. You could say, I’m going to have a sprint of activity to see if I can identify insight that would look into how better to segment my book of risk, or how better to analyse a given behaviour, or how better to take that behaviour and drive that into an underwriting process, etc. Having clarity and purpose, for me, is one of the clearest and most effective goals for any data analysis project.

Q

Do you think the differential in outcomes between the use of tech and data, compared to traditional risk assessment and underwriting techniques, is broadening at a significant speed?

A

The short answer is yes. We are entering an era where it is no longer a competitive advantage to have tech and data in the underwriting process. If you don’t have it, you are at a significant disadvantage. If we consider the marine sector - if someone were to present you with a fleet of business that you’ve never seen before, traditionally that could take anywhere between 24 hours and a week to produce a price.

But with our tech, we can do that in less than five seconds. We’re at a stage where it’s now going to be impossible to compete without having one of these tools available in your portfolio.

It’s not so much human versus tech; it’s humans supplemented by technology

Q

Aggregating data is clearly important, but how do you ensure the data’s quality and accuracy?

A

At Concirrus, we have an entire team that is focused on data acquisition – the accuracy is of paramount importance. If you’re going to have a system that will guide underwriting decisions based on data, then it must be correct. Our team curate the data, finding new data sources, then spend time looking at the quality of that data.

So, for AIS data, the data may be 65 or 70% accurate. Once this is presented to us, we have a whole series of steps to scrub and clean up data, getting it up to the 90%+ marks. These steps include: defining clear goals and metrics about what you’re trying to achieve in the cleaning process; ensuring you have good systems in place for cleaning the data; and testing the data against a model to ensure you identify any outliers before the data is put into production.

Q

Why is real-time data collection and interpretation significant?

A

The reason this is significant, is because we live in an environment where risk is ever changing. If you think about how the insurance industry has worked for many years: people will write a policy on the 1st of January, for example, and then won’t look at it until there is a claim, or a renewal twelve months later.

But in reality, the whole landscape of risk is changing. For marine, all of the vessels you cover could be in one port at any given time, and now you have an accumulation of risk that is unknown to you. Having real-time data about what your accumulations of risk are, what the interpretation of them should be, and what this means to your business, is important. Not having this is an existential risk to the insurance industry.

The companies that can’t do this going forward, will find themselves in very difficult situations.

MODERN

INSURANCE

|

53

F E AT U R E S

I think the technology we are seeing is enhancing the experience of the experts, rather than diminishing it

Q

To what extent do connected policies advance the industry?

A

I think they are a massive change for the industry as a whole. We are in very interesting times, with Covid-19 having an impact on the industry. As I have said previously, the nature of risk is changing. A connected policy allows the policy to flex on the underlying behaviour. For example, with marine, if many people stop using their vessels and they start holding up ports, a connected policy will allow insurers to react to this changing utilisation. Automation means that the policy is more effective in covering risk – with more detail and accuracy – and it’s done more efficiently. There is little need for manual interaction, so the customer receives a better, tailored, and more efficient policy.

Conversely, the insurer knows more about the risk they are writing, allowing them to deal with changes and do do so with a low administrative cost.

Q

Concirrus has seen rapid growth since launching as a start-up - what do you think has been the key to this and what does the future hold?

A

We’re asked this question a lot and it’s always quite difficult to answer.

We’re only doing what we’re doing, so

54

|

MODERN

INSURANCE

it’s difficult to compare and contrast to others. We’ve had a meticulous focus on our customers’ businesses, we’re spending a lot of time trying to understand the issues they face on a day to day basis, and looking at how tech can have a positive impact. I think too many start-ups spend time thinking about their own business. But when you’re focused on your customers, that makes for a much more interesting conversation. In terms of what the future holds, we are focusing on converting those customer wins and extending our product across their organisations – underwriting through to claims – as well as across new and emerging business lines: marine cargo, automotive, and transportation.

Of course, we have the short-term challenge around Covid-19 in terms of how we respond and help our customers through this difficult situation. Interestingly, with the new homeworking policy, it’s really going to challenge marketplaces like Lloyd’s, who have been operating as a face-to-face business Having a technology like ours, which is essentially a web-based tech

and facilitates collaboration for a virtual result, is very timely in the market.

Strangely enough, I believe that loss will be a short-term impact for businesses.

The long-term situation will be challenging working practices. Overall, I think it’s going to be very positive for the industry.

Andy Yeoman is the CEO of Concirrus.

F E AT U R E S

Prosthetics & Rehabilitation

Matthew Hughes, Managing Director of Dorset Orthopaedics, discusses the importance of keeping the patient at the forefront, and how we can redefine mobility in this new decade.

How can we combine clinical expertise and Q advanced prosthetic tech innovations to redefine mobility?

So, in order to ‘redefine mobility’ we need to focus less on what the prosthetic can do and more on how is can change the patient’s life

A

The world we function in, is constantly changing and evolving – organisations of all sizes and niches are developing with problem solving solutions. In the last twenty years, the advancements in prosthetic achievements have come on in leaps and bounds. However, continually developing these products and then bringing them to the market as commercially available, has resulted in a significant cost rise. So, in order to ‘redefine mobility’ we need to focus less on what the prosthetic can do and more on how it can change the patient’s life. There has been a considerable emphasis on not just providing the most up to date products, but about providing the most appropriate product to the patient and justifying why they need it. We need to be sure the products are going to make a difference. We need to test them and collect quantitative data to show the product does allow a patient to walk more easily, with less energy and with less chance of falling. Then, we can assess the differences these products and services make, compared to the condition the patient first came to us in.

How can we make sure excellent mobility and Q wellness go hand-in-hand to ensure that we keep the injured person at the forefront of the process?

A

It comes back to measuring what we’re doing; ensuring each decision and action has a reason, we’re doing it because it brings increased independence and ability to that individual person. Every treatment and process needs to be bespoke – patients need to trial components to understand what makes a difference to them, then they need to be given the skills and training to get the most out of their prosthesis.

We need to ensure they have the appropriate physiotherapy and occupational therapy, as well as any other services required.

We also need to be sure we monitor their process, if they hit a plateau or a setback, we get them back in to provide updates and adjustments. Rehabilitation is not a one-off thing. It is an ongoing process – a journey that never truly stops.

How can we ensure that this level of care Q and rehabilitation is continued, to deliver an amazing customer experience every time?

A

From a legal perspective, the only way we can ensure this happens is to provide a good service from the very beginning.

If we do this, patients will come back to us. In the sector we work in, in terms of medical negligence and personal injury law, once a patient has settled their case or claim, that money is theirs and they can utilise it however they want. The don’t have to spend their money on a new prosthesis, or the prescriptions and recommendations we may have made. However, if we have already provided a good service during the initial rehabilitation process one would hope that as and when they need future input they will return to build on what has already been achieved when rehabbing them - there’s trust built up there. Then they will come back, and they will continue to benefit.

Everything I have discussed is about doing the right thing. As clinicians – as people providing a service – one of the most important things to understand is what the patient wants to achieve. What the textbook tells them they should be doing, and what they want to do are sometimes two different things.

Matthew Hughes,

Managing Director, Dorset Orthopaedics.

MODERN

INSURANCE

|

55

F E AT U R E S

Meteorological Intelligence Jamie Banasik MSc, Founder of Metswift, delves into the details of weather analysis and the steps the insurance industry still need to take.

Q

Please tell us a little about yourself and the creation of Metswift?

A

While studying at The University of Reading the two founders of Metswift, myself and Shaun Pammenter MSc, began evolving what would become a ground-breaking climatological and predictive understanding of weather. We found ourselves frustrated at how weather analysis was not serving industry effectively, we were expecting the industry to be able to decipher weather peril risk from reams of historical data. So we initially challenged what the Re/Insurance industry believed was possible for weather prediction, and how it could assist the sector to instantly access weather data that was accurate and interpreted in to information they could use immediately to allow them to make informed decisions. It was important to us that we gave them the tools to quantify climate change, reduce claims and determine accurate premiums. We began working with underwriters and the interest continued to grow. Here at MetSwift, we bring an acuity to weather and natcat analysis, seamlessly integrating into business processes. Our mission – utilizing our expertise – is to revolutionise weather insight accessed by industry; we have made it faster, smarter, global & hyperlocal, of higher quality and applied our advanced and award winning proprietary Artificial Intelligence.

Q

Please can you explain the term ‘New weather’?

A

‘New Weather’ is AI, advanced statistical analysis and the integration of long-term historic trends, weather and natcat insight. Global, hyperlocal, cleansed datasets

Insurance must recognise the meteorological intelligence they need is now at their fingertips.

The power is now in their hands

56

|

MODERN

INSURANCE

that draw on big data, followed by swift analysis powered by machine-learning that can instantly render risk. The application of artificial intelligence enables longer term and more accurate forecasting than ever before. Insurance must recognise the meteorological intelligence they need is now at their fingertips.

The power is now in their hands.

Q A

How can the insurance industry increase resilience as extreme weather events increase?

Resilience is a difficult question as - other than short term, reactive weather information to mitigate their ongoing risk - ultimately the weather will do what it will do.

However, for companies to better understand and manage their exposure, with better analysis and quantification of appropriate risk for a time and place based upon the likely or expected weather, is extremely beneficial. Specifically, breaking down the driving forces and impact of individual weather components, heavy rainfall patterns for example, can better inform insurers further in advance than ever before. Understanding that the changing climate is likely to drive weather patterns which have not been seen before, and therefore their risks have not been quantified, is a new important concept. Providing insurers with a range of outcomes or parametric options allows them to manage their risk appetite to whatever the weather throws their way in the future. Improving their portfolio and mitigating some risk.

Q A

Metswift has recently been named a ‘gamechanger’ how are you changing the landscape in regards to weather analysis?

MetSwift is using machine/deep learning to build weather models whose predictions are based on artificial learning of temporal dependence (timeseries data), and handling of temporal structures like trends and seasonality. In doing so, these trends that may not seem obvious to domain experts and traditional algorithms due to the size, complexity, variety and uniformity, become very clear. We let the data tell the story alongside our team of meteorologists and data scientists, who understand, enrich, and pre-process the data; the results are complex, deep learning networks capable of

F E AT U R E S

The world will move away from statistical information and analysis, and look towards predictive algorithms for answers generating accurate relevant weather insights instantly and further in advance than ever before. We are currently predicting weather 5 years in advance and are working on 10 years.

Q

Do you think the insurance industry is utilising the meteorological intelligence available or do you feel traditional methods and skills are still relied upon?

A

The majority are not, yet!

As climate-related changes, awareness and impact proliferate at speed, most are recognising the need to quantify climate risk and provide quote and premium consistency, but are unsure of how to access accurate resources. Risk directors, underwriters and brokers are asking how the existential, global and most perilous crisis of our age will impact business, and how they can navigate this – MetSwift.live can to show them. Importantly, MetSwift provide the weather and risk insight so

users can apply their domain expertise and create solutions for themselves, other weather providers simply provide the data, often complex, rarely instant and not specific to the enquiry made by the user.

Q A

What is Metlive and what impact will this have on underwriters?

MetSwift.live is our unique and proprietary platform that delivers instant weather insights anywhere in the world up to 5 years in advance. The results enhance the underwriter’s ability to utilise intelligent weather insights with statistical and predictive modelling, meaning that substantial losses can potentially be minimised, climate changes can be quantified and consistency of portfolio can be achieved. The simplicity and ease of use of the results on the platform allow users to take what they need with minimal digestion and can therefore make quicker, more informed decisions.

MetSwift provide the weather and risk insight so users can apply their domain expertise and create solutions for themselves

Q

As unintelligible weather data becomes a thing of the past and the role of AI increases what do you predict for the future?

A

The world will move away from statistical information and analysis, and look towards predictive algorithms for answers. The key is to learn from the past to predict the future, not look at the past to infer it. Critically, as the change in climate accelerates in both its non-uniformity and non-linearity globally, historical data will become less and less relevant and therefore useful. Industries must move towards understanding the trends from historical data but let the algorithms turn these trends into actuals.

Jamie Banasik MSc

is a Meteorologist and Founder of Metswift.

MODERN

INSURANCE

|

57

F E AT U R E S

HOW TO INSURE BRAND FUTURE Erik Saelens, Founder and Executive Strategic Director of Brandhome, expert in brand management, discusses what exactly makes a brand. He touches on Brandhome method®, the challenges insurance brands face, and how we can tackle them.

Anyone who wants to build and brand in the insurance space faces two challenges: the low involvement and the negative consumption effect of the sector.

LOW INVOLVEMENT

Research in Europe has highlighted that a person who has had no incidents, thinks about their insurance for an average of six minutes a year: when they get the bill from the insurer, wondering why they need this and why it’s getting more expensive, they pay it… and then forget about it. Compare this with the daily average time a UK based user spends on social media sites – one hour and fifty minutes! – and the point goes without saying.

NEGATIVE CONSUMPTION EFFECT

This means that 95% of insurance products have a negative connotation when they are ‘consumed’. You interact with your non-life insurer because of an accident or a leak, and you interact with your life insurer regarding the loss of someone you love.

Although these moments of contact can be very rewarding for your NPS, they have a short-term impact on perception, and thus commercial behaviour.

To these challenges, we must also add the fact that higherinvolvement brands and brands commoditising the insurance value proposition are beginning to enter the profitable insurance space.

Most of these out-of-category players claim to be closer, more empathetic and connected to the consumer than the traditional industry players. Is this true? We’ll discuss this in a moment.

So, what is brand? It is so much more than advertising – if the brand is the car, then advertising is just the fuel. A brand is an economic instrument, it gives you the ability of commanding a certain ‘element’ over other comparative offers. This is what brand building is all about: how high this element can go, and correlating it with the strength of your brand. These two need to be well balanced, and this balancing act happens along the fair-trade line.

This is the trade-off between the perceived value of benefits of your brand, and its price/premium. According to the Brandhome methodÒ, the brand premium is composed of four components.

These make up the final brand premium clients are willing to pay:

Insurance brands need to stay faithful to their core, which is a human one

58

|

MODERN

INSURANCE

Price Element – this is the added price, benchmarked against the cost leader in your category, that a brand can charge. A nice example is the handbag brand, Hermès. A black Birkin Hermès bag, a similar sized Gucci bag, and an unbranded bag have asymmetric price elements. This shows the price inelasticity of a brand like Hermès. It bends your fair value line.

Service Element – this is the extra value a brand can ask for due to their service leverage. For example, BMW’s after-sales service is so wonderful; they have a higher repeat buying pattern with customers who have had a product problem, than consumers who have not.

Distribution Element – this is simple: be where your customers are anytime, anywhere, anyhow. Coca-Cola, McDonalds, Pizza Hut – wherever you go, they go.

Loyalty Element – this is a more complex element that holds a psychological aspect. This is the mental cost that consumers who want to earn from your brand need to ‘pay’ in respect to their peers. This adds to the self-esteem of your buyers.

F E AT U R E S

Brand is so much more than advertising – if the brand is the car, then advertising is just the fuel Clearly, the final brand premium is valued in the price and brand equity. Brands need to have free cash flow to fund innovation to fight copycats, the commanded brand premium must continually increase. Needless to say, most insurance brands don’t have the same brand power as these new out-of-category brands.

So, how can you insure your insurance brand to be future-proof and resistant to all out-of-category entrants?

First, you must stay keenly aware of the direction the market is changing. The channels used by consumers to seek out insurance have changed. Now more than ever, they are researching and buying products online, and expect to communicate through the according channels. Likewise, consumers are expecting frequent, tailored and customised communications. As a result, legacy insurers need to update their current tools to make their offer more attractive.

Moreover, insurance brands must incorporate the use of big data to keep themselves relevant and profitable. Insurers are lucky to find themselves in possession of a wealth of sought after, and therefore highly marketable, data. By leveraging this data, they can establish new channels across the value chain. This data also has very important internal usages; its capacity to serve as an incredibly accurate decision-making tool, as well as a launch pad for improved product development and underwriting.

Legacy insurers need to update their current tools to make their offer more attractive

Incorporating emerging tech – such as AI and blockchain – into your brand’s value proposition is rapidly becoming a requisite for any competitive actor in the market. Both of these tools represent a threat and an opportunity for the insurance market. They are, or appear to be, a threat because their development is applying pressure to three key components of the insurance business: the updating of now obsolete legacy systems to industry standards, rigorous analysis of cybersecurity vulnerabilities, and blockchain implementation to protect from fraud detection, improve trust, and more efficiently manage claims. The opportunity lies in adopting these new tools to more efficiently solve the latter problems.

However, these considerations come with a caveat. With all of these advances – which surely promise a lot of financial upside – insurance brands need to stay faithful to their core, which is a human one. While trying to remain competitive in today’s market, we need to humanise the sector. To put it bluntly: a digital-only brand does not come to your mother’s funeral, your broker does – do not underestimate broker brand power!

It is worth considering whether the future of insuring lies in traditional insurance at all. Perhaps, using the databases acquired over years of operations, legacy insurance brands can dramatically change their business model. These possibilities need to be considered even though they do not have their place in this short article.

Erik Saelens

is the Founder and Executive Strategic Director of BrandHome.

MODERN

INSURANCE

|

59

F E AT U R E S

Forget tradition it’s time for digital Can there really be innovation in insurance? Is this whole #Insurtech thing just a trendy bubble that will soon burst?

Or is there gold in those hills?

s an insurance provider, it can be hard to cut through the noise and find relevance in a business built on an aversion to risk and protecting customers. But within that customer base, you’ll find the trends that can unveil the changes that bring new opportunities and the multitude of threats to current business models - seen as traditional and staid.

The insurance industry needs to prepare.

A

If there’s one cataclysmic change that has defined the insurance industry over the last decade, it’s aggregation. Almost every insurer now finds the majority of their car, home and life business comes from aggregators. While this provides a steady flow of new business, it has also commoditised the sector, slashed margins, un-branded the purchase process and demands an ever-larger commission. The benefits are scant and most insurers you speak to will say they wish they’d never gone down that road in the first place.

Aggregation drove commonality of offering, comparability of products, features and services. And this might mean we can turn on the sales tap at will, but it is slowly destroying the efforts brands like AXA, Aviva and RSA have put in over the years to deliver remarkable service, build strong brands and create loyalty.

In a world where consumers are likely not claiming in any given year, aggregators can easily tempt you away to cheaper options where neither the service nor the brand matter.

So, how can insurers exploit technology to claw back some control?

It is all in the data – establishing a deeper, more personalised customer relationship and offering products so customised it becomes impossible to compare your offerings to others.

This has only recently become possible thanks to advances in key technology areas. Firstly, with Cloud-driven data storage powered by companies like Google, Microsoft and IBM, the promise of the true single customer view is now within reach. Previously, the idea of tying an insurer’s multitude of legacy systems into one “controlling mind” was not only out of reach, it was often untenable for even the most enthusiastic CTO’s budget. Increased competition has resulted in rapidly falling costs and everimproving internet connectivity, making this a reality.

Having all your data in one place is not the cure-all, as many ‘Big Data’ early adopters will have discovered. What now makes

60

|

MODERN

INSURANCE

this move far more lucrative is Machine Learning (ML). Until recently, identifying the patterns in customer data that indicated loyalty, up-spend, fraud, lapsing and other behaviours mined on a trial and improvement basis. Now, by using predictive learning techniques across an insurer’s entire database, we can understand the propensities of customers, even when they have only limited behavioural and finance data on their record. Here at Equator, we’re also using ML techniques to establish demographic and behavioural propensities from a user’s engagement with a website and its purchase funnel – a cutting edge technological approach which was not possible 18 months ago. In short, data mountains are becoming manageable molehills for marketers, claims adjustors and product managers alike.

When you understand your customers better, it becomes far easier to offer product and service customisations that are relevant to that individual. Ones that perhaps lower their renewal cost but, more importantly, deepen their relationship with you and make it harder, or indeed impossible, to aggregate.

The insurer that makes a move to ML-powered personalisation has a long-term strategic advantage over those that do not. This demonstrates that no matter what InsurTech startup comes along, the power lies with those who sit on top of data mountains and have the tools and capabilities to mine it.

But the industry has a long way to go. Many insurers still see the move to bring their data together under one Cloud-based roof as impossible, often citing regulatory or risk reasons something their smarter competitors are overcoming. This is where you employ the external services of those skilled in digital transformation. Those that have been there before and can navigate the technological hurdles while appreciating the compliance and legal difficulties you will face internally.

Garry Hamilton,

Group Business Development Director, Equator.

F E AT U R E S

An Interview with Eddie Longworth

by Eddie Longworth Q A

What makes you think that you have all the answers to the problems and opportunities in the world of claims?

I don’t. The knowledge and skill within insurers and the supply chain is phenomenal. So, I spend a lot of time drawing out existing expertise and then getting my clients to apply it properly.

I also bring a degree of objectivity that you can never have when you work inside a company. This means that I can ignore internal politics, established methods of working, and internal structures. I can’t always start with a blank sheet, but I can certainly start with a fresh and challenging view on what is happening today.

Q A

Has there been much change in your 25-year career as a consultant?

Surprisingly, not as much as you would think. Of course, technology has moved on enormously and new methods of managing claims and the supply chain are clearly evident. But a lot of the obstacles and road blocks to change are the same and it’s a part of my job to try and remove those barriers.

Q A

What do you mean? Surely, it’s a very different world to what it was 25 years ago?

At the core of most developmental change is not just the technology but the people who are applying that technology.

We also have these rather awkward things called claimants who do not necessarily respond in the way that we expect or would like them to. My job is often to look at the totality of the opportunity from a number of different standpoints and design new solutions that reflect the needs and abilities of different groups.

The simple reality in claims is that the opportunities are as vast as ever and there are new and exciting technology solutions, but the pace of change can be glacial in far too many cases

Q

The insurance industry and their suppliers seem to be much more customer-focused nowadays. Has that changed the way you do things?

A

My very first assignment for an insurer all those years ago was to identify and analyse third party claims costs. My most recent assignment was to identify ways of making savings and generating better income streams from – you guessed it – third party claims.

Of course, nowadays we will look far more closely at the real needs of claimants and the core competencies of the insurer and their suppliers but, fundamentally, many of the problems remain the same. The solutions will look a little bit different but the core needs behind many of my projects are very similar in broad outline, even if the details differ.

Q A

What do you think of the burgeoning Insurtech movement?

Is that a help to you?

The original premise of Insurtech was to ‘disrupt’ the insurance industry and there certainly have been some gains to be welcomed. For example, product design is changing to be far more ‘instant’ and relevant but, in truth, the investment in the claims arena has been relatively slow to take hold. Not too long ago it took nearly 12 months for me to secure supplier access to an insurer claims system in order to exchange information – that is not how the face of the technology revolution is being depicted.

The simple reality in claims is that the opportunities are as vast as ever and there are new and exciting technology solutions, but the pace of change can be glacial in far too many cases.

Q A

So, what should we do now?

You mean apart from using the services of a great consultant?!

Seriously, driving constructive change within the insurance claims and supply chain arenas requires more than just a technology solution. This needs to be married with a clarity of vision for the future and a deep commitment to professional change management. Add to this mix the need for challenging and original thinking, and what you end up with is the perfect recipe to deliver real and sustainable development.

Eddie Longworth

is a Director at JEL Consulting.

MODERN

INSURANCE

|

61

10

MINUTES

WITH...

10 mins with...

Mike Brockman Q A

Has the industry changed drastically since you started working in it?

I’ve been in the industry for four decades, so I hope it has! I’ve been through the period where insurance was sold by agents visiting their customers every 4 weeks, to the rise and strength of the high street broker, to the seismic move to Direct and the game changing dominance of the now Price Comparison Sites. It is clear that distribution is king.

When you layer on top of this the incredible power and fast-moving pace of technology - and its influence on risk, pricing, data availability and customer engagement - with tools such as AI, machine learning and the Cloud all in a IoT world, how could insurance not change?

You would have thought that insurers would have embraced this new panacea, but the reality is, in my opinion, they have been very slow to adapt and adopt and are still too risk adverse and conservative in their behaviour. This has to change.

There is such a great opportunity for the insurance industry to make a real positive connection with their customers, making the world a better place in an increasingly complex environment. This can be achieved in many ways; saving lives on our roads by using connected car technology, improving health care by positive use of AI in early diagnosis, and real-time control of connected, in-home risk giving us all peace of mind and help when it’s most needed.

I continue to try to do my little bit with my new product range driveTheo, in my new insurtech company ThingCo, taking telematics to the next level and giving power of data to the consumer, but being there when needed if they have a motor accident. You always have to look to do things differently if you want to stand out from the crowd and keep things moving on.

62

|

MODERN

INSURANCE

Q A

What has been the key positive or negative impact of change in your area of the market?

The key positive impact has been the use of telematics in motor insurance to help save lives and drastically reduce the cost of insurance for young people. I founded insurethebox, the specialist telematics only insurer ten years ago, at a time when everyone told me it would never work and no one would want to be monitored. During this time, insurethebox has sold more than a million policies, improving driving standards and saving many lives. I’ve now moved on to ThingCo with the aim to take telematics to another level and make it available to all, whether old or young. We’re about to roll-out our revolutionary solarpowered, wireless, self-installed telematics device called Little Theo, to insurers – it solves may of the problems related to telematics apps but is still low cost for the sector and convenient for the customer. Little Theo will detect when there is a collision and will speak to the driver in-car to expedite support.

A negative would be the scale of regulation. I think this is now gone out of proportion and is a real barrier to innovation, and ironically it is giving consumers less freedom of choice. Having travelled the insurance world for many years, I can safely say is that if the Brits are the best at anything, it has to be insurance.

The UK is the best insurance market in the world and consumers have the best deals and levels of service in the world. We shouldn’t let regulation destroy this!

Q A

Q A

Have you had/got a mentor? If so, what was the most valuable piece of advice they gave you?

I once had a client many years ago in my consulting days. He was John Gaynor, the MD of NIG, and he knew motor insurance like no other.

He grew to be MD from the post room.

Whenever I went to see him, I knew I had to be fully prepared and know my stuff. He took no prisoners, but knew how to get the best out of his staff no matter what role they had. I learnt a lot from him.

Q A

If you were not in your current position, what would you be doing?

In terms of career, it would have to be the medical world. There are so many problems to solve.

Technology, AI and the mass of data available will make a real difference to early diagnosis and treatment.

As for me personally, definitely no retirement in sight, it’s all too exciting and I don’t want to miss anything!

Who inspires you and why?

This is a hard one. I always tell people to be your own person. Find your strengths and work hard at it.

Don’t let the negheads get to you! Believe in yourself! You can achieve anything! I’m not sure where I got that from, I guess you’re just born with it.

Mike Brockman

is the CEO of ThingCo.

This is Cobalt The future of motor claims management A modular solution for first and third party motor claims management that combines expert people with data science, machine learning and AI to drive efficiency and cost reductions, whilst achieving a smoother customer journey and better claims experience.

Accurate Decision Making

Faster Settlement

24/7 Operation

Discover the Cobalt way at

cobaltsolutions.co.uk @Cobalt_Ins

Cobalt Insurance Solutions

Scaleable

Optimised Customer Journey

IT’S ALWAYS VIRUS SEASON CYBER INSURANCE FROM ALLIANZ Every day, companies face the very real threat of a cyber attack from malware and viruses which can bring business to a standstill.

Our Cyber Select product provides comprehensive insurance to cover businesses, along with access to a variety of prevention services and a 24/7 helpline in the event of a cyber attack.

For full details, visit us online at allianzebroker.co.uk/cyber

Allianz Insurance plc. Registered in England number 84638. Registered office: 57 Ladymead, Guildford, Surrey, GU1 1DB, United Kingdom.

Allianz Insurance plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 121849.