Last December, David Clamp and his 18-year-old son were shopping for Christmas trees. Deep in the festive season, it was a perfect father-son moment and David decided to show the teenager the safe way to strap a Christmas tree onto his car roof.
“One day,” he said. “You’ll have your own car and you’ll need to do this.”
The young man in the back seat looked bemused.
“Why? I’ll just get a drone to deliver it.”
A few months later, David is delivering a keynote address at the Innovation & Technology Summit, hosted by The London Market Forums. The second-floor room at the City of London Club is packed, with delegates lining the back wall, standing through the presentation. Chandeliers dangle from the ceiling and the roof terrace is a frying pan thanks to a week-long heat wave.
“There’s a millennial in everyone!” David is telling the audience. “They just don’t get out much.”
Inspired by the way his son sees the world, David is driving the message home.
“There’s a millennial in you… and you… and you,” he says, pointing across the rows.
It’s early July and David, the founder of Merlin Digital Consulting, has been invited to speak to the insurance industry about digital disruption. He’s a veteran of the industry, with 25 years in the banking, investment and insurance sectors. Most recently, he was the Chief Information Officer at Hiscox (UK) Insurance Company.
David is blazing through his presentation. He flicks through the slides, taking his audience on a whirlwind journey from the birth of London’s insurance industry to flying taxis in Dubai. One of the key disruptors in the sector, he says, is the now-humble smart phone.
“What’s the first thing you look at in the morning and the last thing you look at at night?” David enquires.
“My wife!” comes a playful heckle from the back of the room. There’s a roar of laughter.
But David’s point is that InsurTech start-ups are changing the way insurance is or can be done.
One of his favourite examples is Flock, pay-as-you-fly insurance cover for drone pilots, bought and managed on a smartphone app. The concept is simple: when a pilot needs to fly a drone, they log in and receive an instant assessment and cover. The app scans the area, weighs up the risks (power lines, bodies of water, etc) and calculates the premium. The pilot’s history is taken into consideration and the cover lasts as long as the drone is in use on that particular occasion (as little as an hour).
“I think that’s pretty impressive,” David says. “Anywhere there’s a thing you’re insuring, you can apply this.”
Another example he uses is a new service called what3words. The creators of what3words found a way to divide the entire surface of the globe into a grid of 3m X 3m squares, assigning each square a unique 3-word code. This makes finding just about anything, anywhere exceptionally easy. Some of the world’s biggest car makers and GPS providers are already integrating this technology into their products. what3words works in a browser or via a smartphone app and can be integrated into other systems.
For insurance companies prepared to embrace such technology, there are countless potential applications. Insuring a portion of a building, for instance, is one. Insuring billions of people who have no fixed address is another.
“This is a game changer that can make a big difference,” David says. “Insurers are able to become a lot more granular on how they assess risks, how they pay claims and how they manage loss. They can have a much clearer picture.”
There are many other examples in an ecosystem that is “buzzing”. David talks about the Israeli start up called Nexar, where dashcams in road vehicles hand over footage to insurance companies (that crucial 10 seconds before a crash and the 10 seconds after), the power of blockchain, Amazon’s future plans, 3D-Printed houses that rise in days, “smart dust” sensors, brain-to-brain communication, quantum computing and, of course, flying cars.
While start-ups leap to embrace new technology, big companies tend to move slower, with more resistance to change. For David, one of the greatest problems is, ironically, success. Insurance companies that have found a winning formula are less inclined to experiment and take risks. There are other factors at play too: fear of cyber crime, regulations, legacy infrastructure, too much choice when it comes to new tech and a lack of understanding of what business problem needs to be solved.
For David, standing still is not an option. He says the response should be to create a culture of innovation and find the “what if?” people… the people who aren’t obsessed by the limitations of drone deliveries but think about recharging them as they perch up on street lampposts. David says companies need to consider what their customers want (simple to use apps, hyper local insurance, no lock-in contracts, etc..), seek the right business opportunities and maximise the potential of the data they possess. His advice is: be flexible, experiment, have a sense of urgency and never miss a chance to “surprise and delight”.
David’s core message is: get on with it! There’s no easier way to kill an idea, he explains, than by asking “how are you going to do that?”
“Say ‘wow’ not ‘how’,” is the catchphrase.
These sentiments are echoed by the day’s other keynote speaker, Paul Willoughby. With over 20 years in global insurance, including a senior role at Lloyd’s, Paul knows the industry and how technology is changing it.
His presentation focuses on helping insurance companies navigate or avoid the labyrinth of “Business Prevention Officers”, managers and focus groups, where so many good ideas are lost forever. He speaks about embracing people who think differently, using failures to succeed, ignoring the “shiny objects” (every new trend) and teaming up with local innovators before searching Silicon Valley or Tel Aviv.
“Technology is changing,” says Paul. “It’s up to us to change the conversation.”
Paul is a crusader for the start-ups. He urges big companies not to “knock the life out of them”. He summons quotes like: “ask forgiveness, not permission” and “fear and excitement feel the same, so call it excitement and get on with it”.
“Believe in creativity and ideas,” concludes Paul. “Battle the prevention officers and align tech to strategy, not the other way around.”
Before the event wraps up, there are some questions about finding budget for creative ideas labs, collaborating with competitors in an open-source environment and blockchain in insurance. David and Paul end the day by taking part in a panel conversation about talent and diversity in the industry.
By seven o’clock the sun has dipped behind neighbouring buildings, cold beers are served and the conference room is transformed to screen the football (England are about to knock Colombia out of the World Cup). As David reflects on the afternoon, he returns to the story about his son and the Christmas tree.
“We tied the tree onto the car. Well, I did. My son was going like ‘I’m not interested’. In the future, yes, drones will deliver lots and lots of things… including, probably, Christmas trees”.
The question is, who will be insuring those drones and all the Christmas tree owners?