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04FUTURE OF INSURANCERACONTEUR.NET05Bloomberg Creative via GettyImagesCommercial featureInsurance firms turn up the dialon digitalisationAfter playing catch-up on innovation, insurers can now embrace artificial intelligenceto define new standards of customer experience and business performance.he historic insurance sectormay have lagged behind itsclose counterparts in financial services and other industries whenit comes to embracing innovation, butC-suite leaders are waking up to the hugeopportunities. Customer interactionsare increasingly led by chatbots, droneshave significantly reduced the time todamage assess a disaster and insuretechstartups are enabling consumers to fileclaims and get paid in minutes.If concerns about digital disruptionweren’t already causing ripples in theboardrooms of incumbent insurancefirms before coronavirus, they certainly are now. Digital offerings leapfrogged seven years of progress in afew short months of the pandemic,according to research by McKinsey, anddrove a surge in interest in acceleratingdigital transformation within the insurance community to help embed operational resilience.As exciting as that may sound forinsurance customers, one key barrierhas traditionally stood in the way ofany digital acceleration: legacy. Nineout of ten legacy insurers strugglewith archaic infrastructure, according to a study by operations management and analytics firm EXL, andmany are still stuck on systems fromthe 1970s or 80s. Meanwhile, agilestartups are able to better meet theircustomers’ expectations.“There was certainly a big surge ininsurance companies coming to usT 150msavings targeted by global brokerthrough better data ingestionwith embedded AI and naturallanguage processing30%reduction in cost achievablethrough conversational AI20%increase in employee productivityexpected through embeddedanalytics and behavioural scienceSource:EXLwanting to speed up their digitalisation programmes and operationalresilience was a principal reason,” saysRaghav Jaggi, senior vice presidentat EXL, which gives organisations thepower to transform and grow sustainable businesses.“Companies are looking at whatlevers they can pull to increase theirmargins, deliver shareholder value andenhance their capability to serve customers. But legacy infrastructure is nota band aid you can just rip off; transformation requires completely new wiringand plumbing. And that kind of changemanagement requires a super-sensitive knowledge and approach.“And that knowledge has to extendto the end customer. Insurance is verybroad: global markets for large businesses, specialty markets and syndicates, and then the personal lines. Weknow customers in all sectors don’t wantto have to key in data or repeat information again and again. Particularly forconsumers and small and medium-sizedenterprises, it has to be a seamless digital experience because that’s whatpeople are accustomed to now.“The real opportunity, however, isin how large corporations buy and getserviced on their insurance policies.We can help make every process andexperience from an end-client to abroker to a carrier to a reinsurer moreseamless by technology.”Up to 70% of large-scale change programmes are estimated to fail. Digitaltransformation is difficult to achievein any industry, let alone one as old asinsurance. Mostly this is because theyaren’t customer or market driven,though insurance firms are nowincreasingly understanding they mustestablish the customer requirementsfirst and then allow the technology tofollow. Equally, transformation shouldbe an iterative process, accepting smallfailures and scaling up the successes.EXL sees digital transformation ofinsurance in three phases, starting withautomation of processes. But whilecompanies might have been improving processes, they weren’t fundamentally changing how they interactwith clients. The second phase, whichis where most advanced insurers arearriving now, is customer-driven transformation. Though organisations areundoubtedly still focused on drivingefficiencies, if they aren’t changinghow they interact with customers, thetransformation isn’t achieving its goals.This is all, however, heading towards athird phase: artificial intelligence (AI) asthe operating system of choice.BREXITBrexit is a passport toinnovation, say insurersEXL’s DigitalExperience Centeris a purpose-builtfacility for clientsand teams tocollaborate oninnovation in thedigital and AI arena“That means moving everything on toa learning loop,” says Ankor Rai, chiefdigital officer at EXL. “All the data isentered by AI rather than manually byhumans, customers’ conversations arewith AI and companies take decisionsusing not just their own data but thirdparty data too. It constantly informsand improves itself, so is dynamic andintuitive. Data is the key to powering africtionless customer experience withservice at the speed of desire andAI-driven personalisation to each customer and their behaviour.“Insurance companies want to moveaway from interacting with their customers once every six months or yearat the time of renewal or a calamity.Filling the 1-trillion insurance gap,which is caused by the huge numberof people who don’t have cover that’sright for them, relies on a deeper, moreongoing relationship, powered by AI.”There is a 1-trillion insurancegap. Filling that will rely ona deeper, more ongoingrelationship, powered by AIA global broker deployed EXL’sXtrakto.AI, the company’s proprietaryAI-at-scale solution, to ingest datafrom various sources, digitalise it andthen enable the input which eliminatedthe entire need for a manual effortinto their legacy systems. Even thoughlegacy still exists on one side, the company can create wrappers that bringthe newest and greatest techniques tobridge that gap, without having to ripit out entirely. Another advantage ofinfusing AI into operations is the ability to extract more data from insurancedocuments and then feed back into keybusiness areas, such as how to improveunderwriter decision-making.For 20 years, EXL has been deepeningits insurance-domain expertise, whilecreating best-in-class data, analyticsand digital technology, and ensuringboth “sides” understand and informeach other. That way it can designand manage the agile, customer-centric operating models needed to driveefficiencies, improve customer experience, increase data-driven insights,and manage risk and compliance.Part of the reason for EXL’s success with its clients is the way it livesby its core values. “We always believewe can find a better way,” says MohitManchanda EXL’s head of insurance inthe UK, “so innovation is a part of ourDNA. And ideas like collaboration andrespect mean we truly work with ourclients to make sure we do, together.”Rai adds: “The future of insurancedepends on data and we are the partner of choice for leveraging that to notjust catch up on innovation but trulyleapfrog into the next decade andbeyond. Our analytics business translates data into insight to drive betterdecision-making, while our digitalbusiness infuses data, using AI, into theactual guts of an insurance company.Wrapped around all that is our deepinsurance-domain knowledge.“By working with a partner such asEXL, insurance firms can harvest andmonetise data, drive efficiencies andcreate a better customer experience.We do that best because we’ve been20 years in this business. You can’t justget a technologist to navigate this. Youneed someone who understands bothinsurance and technology to be able tobring these things together. By infusing data and digital we are hitting theentire value chain.”For more nce@exlservice.comMeticulous planning is what we expect from professionalinsurance companies and, with Brexit, they haven’t disappointedVirginia Matthewsf there’s one industrywhich knows about hedging its bets, it’s insurance.No sooner had the ink dried onthe 2016 Brexit referendum thanmany firms set about restructuringtheir businesses and securing newtalent pipelines.While the Association of BritishInsurers (ABI) believes some 35 subsidiaries and 29 million contractswere transferred to the Continentin the two years that followed thevote, for other players it was a case oflooking closer to home.“Our focus is on our strongestand most strategically advantagedbusinesses in the UK, Ireland andCanada,” says Suresh Weerasinghe,head of European Union and Brexitpublic policy at Aviva.“These are our core markets, wherewe have market-leading positions,can generate attractive returns andhave a clear path to win, and we willinvest for growth across them.”IHe believes Brexit offers a goodopportunity to regulate specificallyfor the UK market, rather than for theEU as a whole, and says the new rulesshould be tailored with this in mind.With an already-strong international presence, the task forWillis Towers Watson was to create a dual-regulated operation inBelgium, allowing collaborationbetween client services teams in theEU and UK.“So far the trading climate hasbeen maintained at very strong levels thanks to the planning and solutions we put in place,” says NicolasAubert, head of Great Britain atWillis Towers Watson, who is looking forward to a new period of innovation and growth.Post-Brexit, the firm’s experiencehas been “one of continuity, for ourclients, ourselves and our businesspartners, so there have not beentoo many bumps in the road so far”,he says. 95 bncould be released by post-Brexitreforms to financial regulations inthe insurance industry, of this 60bncould be re-invested in a broaderand greener range of assets 16.6bnwould be generated in additionalannual GDP in the UK by 2051,at no cost to the Government 1.4bnmore could be received by theExchequer in tax by 2030, as a resultof the economic growthAssociation of British Insurers 2021While regulatory change is uppermost in firms’ minds, a clearerglimpse of the road ahead has becomemore important than whether thenew rules will be tougher or perhapsincreasingly light-touch.As a highly regulated business,reliant on what Aubert calls “having good readability” from the regulator, clarity has now becomethe top priority, he says, allowing firms to “see what the regulatory environment will be like as farinto the future as possible and toadapt, prepare and maintain thequality of business operations andclient experience”.While consolidation among largeinsurance houses, including Aon’sproposed merger with Willis TowersWatson,continuesthroughoutmuch of the sector, the independent broking industry has provedequally acquisitive.“There’s an arms race in the UKinsurance broker business anddespite the overall number of firmsin the country dwindling to just2,000, there’s no sign that this trendwill end soon,” says Peter Blanc,group chief executive at Aston Lark.Having geared up for Brexit by purchasing two brokerages in Ireland,both with London branch status, hisown firm has well-advanced plansfor further growth.“Having made a decision to significantly expand our Irish business, wehave invested in leadership and arenow engaged in the diligence process around acquiring further brokers in the Irish market,” he says.“What started out as a Brexit hedgehas become a successful and long

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