A year ago I attended the Marketforce conference in the Nordics and the question was asked “We talk about innovation a lot but where it actually making a difference ?” The only example given by the 200 or so audience was the “connected home start up Neos”. This year it was totally different.
I was part of the Sapiens team at the recent and very informative Insurance Innovators (Marketforce) conference in Copenhagen (5th/6th March 2018) – where InsurTech start ups were arising and seemingly stealing the innovation show from insurers…or were they ?
Here are my key take aways.
The rise of InsurTech start ups: We had 5 great examples of small but highly buzzing teams of entrepreneurs making stuff happen: Gigga (a very “human” peer to peer insurer in Denmark), Buzz Vault (home insurance start up in the UK, including a personalised online digital vault), Tribe (innovative P2P in Denmark), Insurance Simplified (AI-based intelligent digital advisor from Sweden) and Dacadoo (Health in Switzerland). Clear and bubbly evidence of business agility (test and learn then try again), laser focus on the needs of the customer, insightful and timely use of data and increasingly AI – all challenging the established models of insurance. Cool dudes!
The response by Insurance companies: But it was not all about the rising stars – far from it. We had inspirational presentations by the incumbent Nordic insurers who are certainly not hanging around….at all.
SpareBank1 (Norway) shared its vision of pricing and underwriting in the future – including the secret of advanced analytics, plus artificial Intelligence together with technology having the potential to automate and help standardise high volume/low complexity underwriting tasks and the evolving frontier between advanced analytics based pricing/underwriting and profit/volume optimisation – important and critical areas to get right……. hearing a CEO (who used to be an Actuary) describe deep learning neural networks, was very impressive indeed.
Local Tapiola (Finland) laid out its lessons from innovation around needing to closely link innovation and regulation (one can’t really happen without the other with a great graphic), producing “Minimum Viable Loveable Products – MLPs” and that innovation is “99% perspiration and 1% inspiration” – so why not partner with others to help with the 99%!
The Head of Innovation at Lansforsakringar (Sweden) was on fire ! – setting light to key areas of this large and traditional insurer – a fresh thinker, and, by design, absolutely not focused on “how can I sell more insurance” – so restricting ! His title was “Added value services – a nice perk or a necessity ?” – I think you can guess the answer. Running ideation sessions, hackathons and having no “steering groups” – how can you be truly innovative if you are steered by existing management ? Creating 724 ideas on day 1 and then turning them into 70 business ideas on a canvas on day 2 – love it ! But his best slide was “Drown in data or swim in information ?”
Alka Forsikring (Denmark) shared their “Tackling customer demands with agile leadership” programme – telling us why and how over the past 1.5 years they have been transforming the whole organisation from a traditional hierarchical layered and siloed structure to a complete mixture of small, digitally enabled, customer obsessed, data rich agile teams – brilliant example of adopting what I call “purple teams”. As usual, changing human behaviour was his biggest challenge, “…changing IT systems was a lot easier!”
Tryg (Nordics) shared how they are actively using IOT devices to create pro-active relationships with customers – IOT = “Intelligence of Things”. Moving from a very traditional product centric world to value creating services – with plenty of examples given. “Adoption of connected home devices remains low, mainly due to lack of interoperability” – it will only be matter of when, not if. Also, “The mobile Internet, the power of advanced analytics, and AI will lead consumers to expect fully personalized solutions – completely friction free” – defo. Best quote of the conference by far “Everyone has a plan, until they get punched in the mouth….Mike Tyson”.
Vendors/Partners: Great thought leadership sessions by Pegasystems, Guidewire, FRISS (Fraud detention), Sollers Consulting and Roost (want to know why your old smoke detector always starts chirping with a low battery warning always in the middle of the night ?). Google were telling us how consumers are increasingly only picking up their mobile device to interact with the world and great opportunities this can provide for an insurer – “Insurers are competing with the best experience a consumer has ever had, not other insurance companies’ digital offerings”. Google also helped us understand the “Super empowered consumers, who are extremely curious, extremely demanding and extremely impatient”. Amongst others exhibiting, Sapiens were out in full force, illustrating the benefits of their recently enhanced, GDPR ready IDIT insurance platform.
Plus a sprinkling of others: The regulator in Denmark reminded us that “providing an audit trail for AI decisions is critical” – I wonder how many of us are remembering this as we plough on with AI? (you could ask Alexa to remind you) Also, Tryg sharing the somewhat scary world of cyber threats..(the dark web’s out there and it’s for hire), but also the many ways insurers can protect themselves.
Overall: A very timely conference when insurance is facing unprecedented change from all sorts of directions. So, do you need an InsurTech Start Up to be able to innovate – absolutely not, but sometimes, it can help and help a lot. Insurers in the Nordics are already awake and ploughing ahead with their own innovation programmes – with and without these young upstarts. Times “they sure are a changing”.
Excellent conference laid on by the professional Marketforce team, expertly chaired by Tony Tarquini from Pegasystems.
Bring on next year!
David Clamp
Managing Director
Merlin Digital Consulting Ltd
“As digital as possible, human where it counts….”