Think Big, Start Small: Build Your Insurance Transformation Roadmap

"Where are you on your digital transformation journey?"

How many times have you heard this question over the past year? It is a question that many companies struggle to answer. Depending?on your company size, type, history, etc. your own personal digital transformation journey may differ quite dramatically to somebody else. Incumbents and InsurTechs alike are forging their own respective paths. There are plenty of common themes, however, and a couple of weeks ago, I was fortunate enough to moderate a terrific panel discussion with Reuters Events that tackled this very topic.

Joining me for the chat was Brent Hammer, AVP Innovation Officer, Grange insurance. Beti Cung, Head of Innovation Labs, CSAA, Karthikeyan Rathinasabapathi, Director of Transformation, CUNA Mutal. Sean Adams, SVP Innovation Design, State Compensation Insurance Fund. And Samir Ahmed, Principal and Head of Insurance, X BY 2..

During our conversation we tackled a wide range of issues from build vs buy, to failing fast and creating your agents of change. Today I am diving a little deeper into those conversations and shedding a little light around what they might mean for you and your own transformation journey.

Build vs Buy – Creating Your Agents of Change

Essential to any innovation journey is tackling the question of build vs buy. One brings an element of learning and a greater level of ownership to the organization, the other faster results.

Q: Brent – can you share some of your thoughts around the build vs buy conundrum and how you have approached things at Grange Insurance?

Brent Hammer: Absolutely. One of the things that I think is foundational, at any stage of your innovation journey, is establishing that buy versus build framework, getting that calibration across the different areas of the business that are driving different elements of how you're transforming the business.

We like to say at Grange – “Things have never moved as fast as they are moving right now. But they will also never be this slow again.”

And so again, having that buy versus build framework established is critical to be able to manage the pace of change.

In terms of establishing your agents of change as part of that process, I would say, at Grange in particular, we quickly identified where there were gaps between the other agents of change within the enterprise. So as an example, we have a digital team, who are firmly established. We have business intelligence and analytics teams that again, are well established. We even have an emerging tech subdivision of our of our IT department. Innovation is really the newest of the members in terms of our agents of change and transformation for the enterprise. Every single one approaches the buy versus build decision paradigm a little bit differently.

Innovation Teams

Q: Karthikeyan – Can you share your thinking around dedicated innovation teams? How might companies align around that more effectively?

Karthikeyan Rathinasabapathi: Great question. If you look at most companies, especially when it comes to the long term transformation, the horizontal type of transformation, they tend to partner a lot of the time. To help drive internal innovation, organizations will sometimes spin up a separate entity and give them complete freedom to go and innovate. Usually, these are small, agile teams, that typically do not follow any of the standard processes. They are free to leverage any technology methodology they feel fits the bill. And suddenly, they become incredibly good at innovating, and it works for them and for their companies as well. But when you look at the whole mothership, the sum of the short term and midterm transformations and how we want to steer them, it becomes crucial to look at the big picture. The critical part, however, is, you have to start small. So in this process, you need to start looking at what are the long poles in your tent? How do you approach and think about these transformations?

Change Management

Q: Beti – what are you thoughts around change management and how can companies think a little bit differently about how to better handle change management?

Beti Cung: Change management actually started as a practice in the 60s, and it has its roots in grief consultation, which I thought was super interesting. I didn’t think about innovation and technology as something that would bring grief, but what’s interesting to me also is that grief consultation or counseling is focused very much on the human sense of loss. It is not really a topic that seems like it would play into a group of people focused around emerging technologies, yet it is an area that does need to be approached delicately.

I think the other piece relates to a phrase that we hear quite frequently – that change is inevitable. The messaging should be more aligned around the thinking of: the more things change, the more they stay the same. The humanity of it. A critical part of change management is to talk a lot more about empathy. To keep the humans in the loop. This way of thinking, augmenting technology to help people do their jobs a little bit better, is such an important part of the change management conversation.

Cultural Transformation

Q: Karthikeyan ?- culture and cultural transformation are essential ingredients for a successful digital transformation, regardless of where you are in your innovation journey. What are your thoughts around how companies can tackle the cultural side of things?

Karthikeyan Rathinasabapathi: First, I would look at the leadership. How do we transform the leaders of some of the older insurance companies to embrace innovation and innovative thinking? How are we empowering their teams? How good are they at decision making? How are you encouraging your teams to innovate? How do you encourage your team to take a risk? And are you rewarding an individual? How effectively are your teams collaborating across the organization? These are all absolutely critical questions to address when thinking about company cultural and helping drive transformation across an organization.

Agile Mindset

Q: Karthikeyan – What are your thoughts around agile and the agile mindset? How can companies help drive a more agile workforce?

Karthikeyan Rathinasabapathi: When it truly comes to agile mindset, a lot of companies have a really long way to go. Teams have been pursuing the waterfall method for a long time. It can be quite difficult for them to change their mindset, to start thinking about things in a non-waterfall way. And these things can take a long time to strengthen.

What is your vision as an organization to help drive that shift in thinking?

Data & Analytics

Q: Sean – for any organization, collecting and understanding your own data is a critical part of the innovation journey and digital transformation. What is your advice to people out there who are both already on that journey and perhaps have not yet started? Any lessons learned that you are able to share?

Sean Adams: For anyone out there that is starting their digital transformation journey, if you are tasked with doing this, and maybe you're a little bit unsure of where to start, I would humbly recommend that you take a really hard look at change management as a whole.

There are several different aspects to that, but one of the main ones that we have focused on is data readiness. A lot of times you get conflicting priorities, different groups with different objectives. A lot of times this can lead to silos, so perhaps, you are not necessarily unified across all of those areas. You need to identify the common language to help drive unification of those efforts. In my organization, that has been around for well over 100 years, how are we utilizing data? We quickly found that there are steps for readiness in terms of data preparation. And I would suggest that the very first step is trying to get that unifying data layer in there, so your data is swimming in the same bowl and becomes bound by the same rules. It is surprising to me how many organizations have very disparate databases with unique and single sources of data. They are typically spread out, with very little interaction. Bringing these data sources together and encouraging connectivity is the real power that you can unlock with data.

Q: Samir – Any final thoughts on the history of digital transformation and perhaps what companies can learn from the past?

Samir Ahmed: There is hardly an insurance organization that is not going through some sort of transformation. The reality is, this is not anything new. Transformation has been going on for many, many years. It is more a question of what flavor of transformation are we in?

Just to kind of remind ourselves, there was a time when insurance management was all based off of paper files and records management meant, how do we handle these corridors of file cabinets? The introduction of microfiche technology did wonders for that. And then, a company like Policy Management Systems Corporation came along and started the process of digitizing records. And this was based off of mainframe systems. And so we went from insurance management from being on paper files to computerized files. So that was probably the first wave of transformation. And then there was a transition from mainframe to distributed systems, which happened in two waves. One was moving to client server type technology, and then the second wave of that was moving to web based systems. And the critical piece there was that it moved the access from front office to the field force, and put more power into the hands of the policyholders. And today, we are now in the next wave, which is moving to cloud based systems, and leveraging machine learning for processing purposes.

So the key thing here, is that when an organization goes through a transformational stage, it uses up the lion's share of the organizational resources, typically over an extended period of time, perhaps, three to five years would be fairly typical. So, it creates this challenge of how do we continue transformation but at the same time, focus on innovative initiatives that have a shorter duration, quicker turnaround time? If resources are focused on transformation, who do we get to focus on the innovation? That’s a critical challenge.

Walk, Run, Sprint

When I joined Care Bridge International, it quickly became apparent that as an organization, we embraced many of the facets highlighted above. For innovation to succeed, however, it was critical to continually focus on company culture and make sure the entire organization was in alignment around innovative thinking. To that end, we invest a lot of time and effort into making sure practices like design thinking and customer journey mapping are firmly rooted within the company culture. All of our members are Lean Six Sigma certified, which helps drive a common understanding of continuous improvement across the organization.

For our customers, we have taken a similar approach with Walk, Run, Sprint. Onboarding is simple and quick with our BridgeIT platform and Quick Referral tool. When you are ready to Run, our Concierge team of trusted advisors are there to help you. Similarly, when you are ready to fully integrate and Run with us, we will also be there to help you along the way.

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