Insurance to Insurtech

Steve Raynor is Chief Operating Officer for QBE’s Australian and New Zealand operations, he played a leadership role in the establishment of QBE’s Group Shared Service Centre in the Philippines.  He is also playing a leadership role in QBE’s adoption of digital and data & analytics as the business transforms from Insurance to Insurtech.

 

Insurance to Insurtech – Embracing the Future of Insurance.

Founded in 1886, QBE is a business that has played a significant role in Australia’s Insurance industry. QBE is one of the top 20 insurers and reinsurers worldwide. With operations in 37 countries and 16,000 employees, QBE is a truly global business.

QBE has recently committed to a new strategy that places an even greater emphasis on customer experience. The appointment of Vivek Bhatia to the role of CEO (ANZ region) a clear sign of their intent.

But is it possible for a traditional insurer to stay true to its roots with the industry facing so much change?

 

Can you share more about QBE’s strategy?

It’s a clear and straightforward strategy. QBE is putting customers at the core of every decision we make. When you break insurance down to its origins, it is all about trust.

In its current form, the origins of insurance were established in the 17th century, in coffeehouses, which were the place to find underwriters for marine insurance. Edward Lloyd supplied his customers with shipping information gathered from the docks and other sources.

The term ‘underwriter’ is said to have derived from the practice of having each risk taker write their name under the total amount of risk that they were willing to accept, for a specified premium. In exchange for the premium, the policyholder trusted that the underwriter would honour the contract in the event of a claim.

In turn, the underwriter trusted that the policyholder would act in an ethical way. All those years ago, insurance was based on people, relationships and trust, and these key elements remain core aspects of our business in QBE today.

QBE is 100% committed to building greater trust and better relationships with our customers. As a predominantly intermediated insurer, we recognise that our customers include the consumer and intermediary and we are committed to building stronger relationships with both parties.

For intermediaries, this means supporting them with great products and easy to digest information, so they can delight their customers (the policyholder.) For the policyholder, we have the opportunity to really be there in their hour of need in the event of a claim. We want to ensure this process is as smooth and easy as possible for everyone. This requires us to have open communications between policyholders, intermediaries and QBE.

QBE is investing in the transformation of our claims service, including the development of a new claims team in Australia, to improve the customer experience. We recognise that certain types of claims, such as householder claims, require a high level of personal contact, specialist knowledge and a rapid resolution for our customers. The reestablishment of this team has been received positively by our customers.

 

The introduction of Artificial Intelligence/Machine Learning will speed up the claims process even further and we are in the process of piloting innovative technology across our business.

 

The appointment of our first Chief Customer Officer in June 2017 and our continued investment in human centred design ensures the customer is woven into our leadership team meetings and is very much at the heart of our new strategy.

 

How is technology supporting QBE’s global strategy?

In 2011, QBE embarked on a global productivity strategy. Our aim was to drive efficiencies across the group whilst enabling scalable growth. At the core of the strategy was a move to a global shared service centre in the Philippines. Any transformation of this scale and nature presents challenges, but we realised significant benefits for all the hard work.

The move has driven huge efficiency gains and areas such as finance processes, data analytics and back office processing, where we have seen a significant improvement in service, quality and turnaround time.
The establishment of the service centre has enabled us to shift our culture and operate more as one global organisation.

At QBE, in recent years we have introduced tools like video conferencing, Yammer, SharePoint and Office 365 to really encourage collaboration and the exchange of ideas, which has helped us break through geographic boundaries in our business. We have a global HR team providing a global view of workforce planning and enhancing global mobility.

We are also promoting global mobility in our business and have an increasing number of examples of people who have worked in different parts of our organisation around the world. This allows us to harness that knowledge and expertise from one part of our business and deploy it anywhere in the world.

 

QBE Executives have been spending time in Silicon Valley, developing relationships and forging partnerships with emerging Insurtech players.

 

Will Insurtech result in the demise of traditional insurers like QBE?

 

Insurtech is creating jobs

I don’t see Insurtech as the end of the traditional insurance model. I believe Insurtech is augmenting the existing capabilities of insurers rather than disrupting or displacing them. People will always want to transfer risk, whether for travel, a car, a home.

However, where traditional insurers need to be wary is the change in the ownership model. As the sharing economy continues to develop, fewer people will own assets such as cars and homes, and this will undoubtedly change the nature of the things people will want to insure.

This change is top of mind for our executive team. Last year, we announced QBE Ventures, a $50m investment fund for partnerships with Insurtechs. We want to invest in Insurtech organisations that can have a meaningful impact in our business, rather than simply making financial investments in technology companies. Over the last 12 months, we have been scanning the globe looking for potential partners and investments. We take it very seriously and have had several of our Group Executive leadership team involved in the scouting and selection process.

 

There are two reasons why QBE are showing such commitment.

1. The executive team want to see first-hand the art of the possible
2. Demonstrate to potential partners how serious we are to invest in and collaborate with Insurtech organisations.

The Insurtech’s we have met have been surprised how seriously we have taken the process as they have all had experience of large corporates wasting their valuable time. We have taken the opportunity to demonstrate how important potential partners are to us. QBE look to partner with organisations who are thinking differently and can bring in fresh ideas and new ways of thinking into our business.

Will Machine Learning result in job losses?

 

 

Technology is having an impact in our business; however, I see technology helping our people to do their job rather than replacing them. I don’t see the current disruption trend to be any different than what we saw 25 years ago when organisations began to digitise processes and increase the use of computers in the workplace.

As an example, we have recently partnered with Risk Genius, an Artificial Intelligence/Machine Learning tool that allows the user to examine policy wordings. We have thousands of policy wordings in QBE, and without a tool like Risk Genius it would be a very manual task to compare two or more policy wordings. I’m sure anyone reading this who has worked in a product management or legal role in an insurer knows how difficult this exercise can be.

The Risk Genius tool enables the user to instantly find the differences, which helps us create contemporary policies and release new products to market much faster. This is an example of people working with machines rather than machines replacing people.

Insurance has always been a data business, even back in the 1700’s when insurers began underwriting ships and their cargo. Back then, the data you had on a ship, the route, the captain, the cargo, the crew was used to assess and underwrite the risk.

Data is still a precious commodity 300 years later. Now, the challenge for insurers lies in accessing and gathering the data from multiple sources; IoT devices, smartphones, social media and other sources.

At QBE we’re constantly looking for ways to enhance the customer experience using data. A great example of this is our motor telematics product targeted to younger drivers. Our InsuranceBox measures driver performance which can be monitored in real time to provide feedback to the driver. By improving driving performance, the customer can reduce their premium. We’ve found this to be of great benefit to our policyholders and a much more accurate way of assessing risk.

We are also pioneering Artificial Intelligence/Machine Learning in our business to transform our capacity to assess bodily injury claims. We have partnered with an organisation to give our claims managers access to data to better manage the claim. This pioneering technology is something we have imported from the US, so we are excited to introduce this new way of enhancing the customer experience.

 

Which skills do insurers need most in a VUCA world?

 

Recruitment for machine learningWe have invested in people with a Data Science background, Claims Analytics professionals, and people from a Machine Learning or Human Centred Design profession. With this investment in new skills come new insights. We are finding better ways to model catastrophes and we are finding examples of claims fraud we may have missed five years ago because we simply did not have the capacity.

However, in this new world, many of the existing skills insurers currently need are equally important. People with empathy, relationship management, and decision making are still a much sought-after commodity.
In our industry, hiring people with learning agility, the capacity to learn new skills, is becoming increasingly important. As our business continues to adapt to this ever-increasing VUCA (volatile, uncertain, complex, ambiguous) world, it is all about attitude and embracing our cultural values.

As an example, we have an employee who has become a role model for change. This person is an MS Excel guru and decided to create an Excel tips group in Yammer. She now has over 600 people from across the globe in QBE as members of her group. Here she is, working remotely from country Victoria, 3 days per week, and QBE employees all over the globe are benefitting from her knowledge. It is great to see examples like this where people are truly embracing the new way of working in our business.

This new way of working is a central theme of our new strategy and culture. QBE strives to be a modern and contemporary organisation, and we recognise the need to communicate in a contemporary manner. So, we have adopted the use of hashtags to communicate our cultural values. For example, instead of talking about diversity we use “#mixitup”. A key part of the diversity push is to bring in people from outside of insurance and develop our existing workforce. We’re helping our people see the change as an opportunity to learn not to be threatened.

Ultimately insurance has, and always will, be a ‘people’ business. The more engaged our people and customers are, the more successful QBE becomes. It is a virtuous circle.

By Dexter Cousins

Founder of Tier One People, where we work with the worlds most visionary FinTech companies and the very best talent. Together, we are creating the companies of the future.