Profiles & Interviews

Interview: Digital transformation in the insurance industry

Insurance Wire sat down with Richard Fothergill, global head of Service Management at Munich Re Group, and Roger Bennett, practice director at CloudStratex, to discuss their recent collaboration to improve the digital competitiveness of the group through the ServiceNow partner programme.

You wanted to develop your new digital operations strategy and deployment plan. Can you describe your previous system and what you wanted to improve?

RF: This particular project was around how the business interfaces within IT. If anyone has an issue, in whichever applications and technology they use, they ask IT for help, but we had quite a disparate set of platforms for how to request it. That is the fundamental problem statement. There was not a nice easy engagement process and tools, so that’s what we’ve now put in place.

How much has the pandemic been a catalyst for developing this change?

RF: This change was already in the books in the first place. Had we not done this, I think the pandemic would have been a lot more challenging, not having a standardised approach and engagement, as opposed to where we were in a number of different ways. This project is about how we fix issues faster, quicker and improve.

I’ll give an example. We’re all on Microsoft Teams now, but we’re on Skype before. It was challenging to do client engagement remotely across locations when you couldn’t travel, so we had to very quickly roll out Teams, because it’s much faster. Now we can do client engagements with companies around the world with head office and the board. I wouldn’t call it all digital transformation, but Covid has massively changed the projects and any transformation we’ve had to do because of this new way of working.

What is ServiceNow?

RB: ServiceNow, at its heart, is forms based workflow. It’s a way of capturing information in forms and using that to progress information through the workflow that you need in order to deliver services inside an organisation. It started off being in IT and that’s predominantly where we use it in Munich Re at the moment but it’s capable of integrating with all sorts of different systems so that you enable the communication across multiple tools and platforms. This integration within ServiceNow enables anything from automated resolution (often called self fix) and automated deployment which is especially important given security implications today.

What we found at Munich Re was that they were pretty locked into an older version and they weren’t taking advantage of the tools as much as they wanted to. We felt they could and so helped them to free up the toolset quite a bit and get a lot more information flowing. As Richard says, we wanted to make sure that we’re interacting with the business in a way that is digitally transformative.

I think it’s making things faster, getting the velocity that you need supported by computer intelligence. It provides a strong end user experience that improves the way people work. If that’s not digital transformation, I don’t know what is.

What exactly did you change? How did CloudStratex help and what options were available for you in terms of a change from your previous system?

RF: We had three versions of this tool. We could have continued and upgraded our previous system. One of the discussions was to merge the two systems and then later move to the next one, so it becomes a bit more staged, really tactical rather than strategic or transformational. That’s always the interesting discussion around projects. Do we just tinker around the edges a little bit or do we throw it away and start again, and then we have a platform for the future? That’s the same with the whole disruption concept of innovation. If you want to try and do something different, rethink the future; throw it away, start again. For many people, it becomes embedded with culture change. It’s always interesting around transformation, because one of the largest parts is the culture and standardisation globally.

RB: Something Richard did, which was very effective, was that he had us change the engine underneath entirely. It was almost like we like we took an old truck body and put it on top of a Tesla frame. Then we set about improving the truck body, upgrading it, and making all the changes the driver would notice, and we ended up turning it into the fast car that they wanted to have. Instead of making a big dramatic change all at once, we made sure that it was running first.

It was really a very smart way to roll it out, that the business was able to absorb much more easily. It didn’t require a huge amount of business change.

Were there any sort of disagreements between Munich Re and CloudStratex during the project?

RB: I think that if you ever see a transformation project where there are no arguments, they’re either lying to you or they haven’t done a good enough job, because things have to squeak in order for you to get to the point where you’re getting the right balance between cost optimisation and benefit for the business.

If we had a big decision to make, we had a technique that we call SCORN – which stands for Situation Complication, Options, Recommendations and Next Steps, where we just described the problem, and we talk through the problem, in terms of what the options are, for getting past it.

It’s a technique that gets everybody on board with what the final decision is and gives you the historical record to go back to how we made the decision about the platform in the first place.

What was been the immediate sort of reaction to this transformation?

RF: So everybody’s on board with it. It was, especially for the IT support vendors, an initial challenge because they were used to doing things in certain ways, so had to conform to the common approach. However, the transparency for everyone, from a business perspective, is a massive improvement to where they were before. There used to be a lot of chasing for updates on issues, compared to now where anyone can see the status of their issue, is advised automatically when it’s fixed, and can give a ‘thumbs up’ if fixed to close the case (or ‘thumbs down’ if still not working).

RB: Richard and our delivery lead, Duncan Docherty were invited to speak at a global ServiceNow conference. From that, I’ve had invitations from major pharmaceutical companies, a bank and another major insurance company, that wants to talk to them about how this project was done and get some idea about how to get themselves out of a similar circumstance.

How continuous are the rollout of these changes?

RF: We try to be more agile, with incremental changes each couple of weeks, rather than a ‘Big Bang’ approach. Every now and again, we will need to put in a whole new functionality so need a good communications strategy. We use different comms tools like Yammer across the business to ensure awareness of change and how it affects them. It also helps win over people that are resistant to change, because it’s constant, so they are always aware and ready thanks to a regular feed of change in a consistent way.”

RB: Richard has a roadmap for change. Then he’s got a regular portfolio session to review any bigger changes that need to come into it. Through the roadmap, he’s communicating with us, his customers and stakeholders, as well as the end users.

Can you share any future plans to develop your digital infrastructure further?

RF: The first thing we want to roll out is what they call a ‘virtual agent’, using AI that can help with inquiries. It’s trying to predict questions; it sees different things coming in and recognises patterns. Obviously, it’s trying to predict what the answer would be to your question.

The second thing that we’re trying to introduce is an automatic discovery tool. In IT, you have hundreds of thousands of bits of kit; desktops, laptops, servers, etc. Currently, this system inventory is done manually. So this tool will discover it all. It knows every end user, whether kit is registered, if it needs to be returned or even what software it uses

RB: We’re talking about doing more in the compliance space, and how to ensure that Munich Re is ahead of audit requirements. There’s a whole ton of new requirements that come in all the time around security, around data protection, and particularly in the financial industry. We’re working together with ServiceNow and able to put in systems that actually manage those things across the company and make sure that all the controls are in the right place, and that good reporting is available. This is done so the company doesn’t have to go through a panic every time there’s an audit, they’ll know in advance that they are doing exactly what they’re supposed to be doing.

What is the reason for the cloud rollout in the digital landscape?

RF: The business is driving a lot of change and transformation around data and AI capability to reduce risk management. It’s one thing to look at the risks, then there’s what you are going to do about them and trying to really understand what’s going on in the environment.

An example would be rolling out IoT to prevent properties from being flooded. We would put IoT devices measuring the temperature in warehouses across various countries. The code in the devices would recognise minus temperatures, which would usually lead to pipes freezing, but instead it automatically flips on the boilers, which makes sure that pipes don’t freeze

We’ve started to use IoT to prevent the risk – it’s a risk remediation – using technology to model where you would want to insure.

How much quicker is the process, using the cloud, compared to previous systems?

RB: A few years ago, I worked at Reuters, which was considered one of the best technology firms in the financial services space. We were very much ahead of the curve. If I needed a new server, it would have taken me at least a month, if not two. Now, if you want a new server, you can request it, and have it provisioned within minutes. The amount of time it takes to build in and install infrastructure is very fast indeed. But what it really does is to enable developers to have faster cycles.

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