Enhancing operational efficiency through system orchestration
System orchestration has become a key focus for profitable firms looking to invest in change initiatives and improve operational efficiencies, with many insurance firms still wasting a great deal of money manually rekeying data between systems that do not communicate. In this episode, we chat with Charles Taylor on how effective system orchestration can improve performance and lower expenses at every stage of the insurance value chain.
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Narrator: [00:00:05] Welcome to IB Talk, the leading podcast for the insurance industry across the UK and Ireland brought to you by insurance business.
Narrator 2: [00:00:14] This episode is presented in partnership with Charles Taylor. In the latest episode of IBUK Talk, Olly Venables strategic client solution director at Charles Taylor joins us to discuss how effective system orchestration can improve performance and lower expenses at every stage of the insurance value chain.
Mia: [00:00:44] Hello and welcome to the latest edition of IB Talk. The Insurance Industry Podcast brought to you by Insurance Business. My name is Mia Wallace, senior news editor at Insurance Business UK. And today I'm joined by Olly Venables, the strategic client solutions director at Charles Taylor and InsureTech. Many thanks for joining me here today, Olly.
Olly: [00:01:05] It's great to be here.
Mia: [00:01:07] And we've got a lot to chat about today as I lean on your expertise to shed some light on how firms are looking to invest in change initiatives to improve their operational efficiency. But I wondered if you would start us off by telling us a little bit about your role at Charles Taylor and InsureTech and your key responsibilities?
Olly: [00:01:25] Yes, of course. So Charles Taylor, in short. I look to help not only our existing clients, but potential prospect clients as well with their operational strategies. This could manifest in a number of different ways. It could be their technical strategies, it could be migration of existing platforms. They have potentially onto us or other people's cloud services or potentially business professional services, which then lean more into the Charles Taylor group rather than just the Insuretech area that I, I work within. So it's an incredibly interesting role. I see a lot of different companies with different approaches and and how they fared over the last couple of years. So it really does keep me incredibly engaged and new problems and opportunities on a daily or weekly basis.
Mia: [00:02:18] Yes. It must be very rewarding to get to work with such a variety of businesses and to assist them in so many different ways.
Olly: [00:02:26] Absolutely. And we have a huge array of different clients. We have more than 150 global clients. So we have household names. We have some quite small start up elements. So this is such an incredible range of different conversations we can potentially have that come from either helping foster those early stage conversations of syndicate in a box or new syndicates that come onto the market right the way up to global insurers and brokers. And we do have a potential option offering that can kind of sit anywhere between those smaller entities right up to those global ones. So yeah, never a dull day.
Mia: [00:03:05] Definitely. Imagine that. And your role as Strategic Client Solutions Director obviously gives you a great overview of what's happening in the external market. And from that overview, how can you tell me a little bit about how Lloyds syndicates combined ratios fared in 2021?
Olly: [00:03:20] Yeah, absolutely. It made for such wonderful reading for the market last year as the Lloyd's Lloyd's of London market brilliant showing by 70, 70% of the market were able to get get under that magic 100, 100% combined ratio and quite a few of them way under it. We know there's been a lot of pressures as a market ourselves, but also with the things going on in the world, we feared what the impact of the market would be for Brexit. We feared what the impact of COVID and now the latest conflict in Europe. All of these things can really test and try that the market and those players and participants within it. And it just shows the resilience and expertise that is available in the market to have have weathered last year in such an incredible way. It's a combination of things. Obviously there's some very keen and intelligent risk selection going on with the underwriting entities. There's going to have been cost reductions across the board from from the carriers. Expenses would have been down if if travel was restricted and they've pushed different working practices that maybe wouldn't have been there a few years ago. So it's it has really there's been a sea change in a number of areas. And the future, after such a good year, considering how bad we've had it for a couple of years, really does look quite right.
Mia: [00:05:01] A lot of really positive statistics there. And it's interesting you mentioned those pressures, some of which are tapering off now and others of which are unfortunately still very pertinent. And I wondered if you could outline some of the key challenges that you are seeing facing syndicates as they try to maintain this positive momentum in 2022?
Olly: [00:05:21] Yeah, absolutely. And in a global world which we find ourselves as a market that those entrants can come now, not just from the other people in AC three and in the surrounding areas. It can come from anywhere in the world. And that would be on the kind of financial and product base. But. There was a major reinsurer recently spoke of double digit millions of losses associated with the Ukraine crisis already. And we know there's going to be a lot that comes out of that and that is going to that is going to certainly dent some of that positive momentum of 2021. But but not completely. And there are a lot of companies that have embraced some of the hybrid working. They have embraced some of the change of approach in what they're underwriting to make sure they are trying to identify, as I said, those those intelligent risk selection, getting that right as quickly and as early as possible, meaning that they've set themselves up for a good year to try to balance out some of these these external factors. Some you can balance, some you can't. And then obviously it's down to the skill and capabilities of the reinsurance placements and the other associated practices that will help them weather some of these elements across the year. But the key bit is going to be after after a good year, you always hope there's another good year. That's that's just the natural inclination. And to do that, you have to invest. And that could be money, it could be time, it could be effort. It's probably all three. And you need to really work out where your investment is going to sit. Is it going to sit with customer growth or is it going to sit with operational efficiency? They're the two key levers that we would talk to. Are you trying to get more people in the door or are you trying to do more with what you already have? It's great if you can do both, but that can be quite difficult. So for some organizations that they're going to be interested in increasing their book size, they're going to be looking at new, diverse markets that maybe they haven't gone into before, or maybe just increasing the size and portfolio they have in their existing areas. For others, they're going to look more about, okay, if I assume a similar level of income, how can I increase my profit? Well, the other way to do that is to reduce your costs. So operational efficiency, I think after the year we've had and some of those expense ratios coming down from the years before, I think that is an area that people are going to look very keenly on because it's it's those areas you can do that have less of an impact. But those external factors as an organization that I think people are going to be very interested in how they can get more bang for their buck.
Mia: [00:08:21] And zeroing in on that area of operational efficiency, given the challenges that firms are facing under the current market conditions. Can you outline some of the key ways that you see that firms can improve this efficiency and some of the ways in which maybe they are across the market already?
Olly: [00:08:36] Yeah, absolutely. So it's certainly going to be a case of being being brutally, truthfully honest with yourselves. And I think that's that's sometimes quite difficult to do. We all know we've all worked in organizations where we've we've seen something and thought that could be better. But at the moment, we've got other other fish to fry. There's other areas you want to consider when you're looking at operational efficiencies. That could be better. It could be the difference of a couple of points on your on your expense ratio could be a couple of points on a number of different value chains that you're looking at and that there's an opportunity for a lot of organizations to have that kind of look in the mirror moment and say, we've known this could be better for a little while now. This could be an opportunity to start looking at that. And technology certainly gives us that option. It's it's not a magic bullet. It's never a panacea. And technology doesn't fix problems. It often highlights highlights the problems to you faster. But what it can do is give you the opportunity to really question and dig into something that that's the way we've always done it. Or, Oh, it would be too difficult to change. As the technology advances, that's too difficult to change becomes less and less of a valid response. And the more we can start looking at those areas and saying, well, actually it was too difficult to change ten years, five years, two years ago. But now is that still the case? Because using using the organization's money as effectively as possible is easier than getting new clients. It costs you less than getting new clients. So there are certainly ways to increase your profitability by identifying those areas of wastage and either using it as a cost reduction exercise or a cost reallocation. There's a lot of work that goes on that does not tick that criteria. Value add. There is no value intrinsically in administration. It is usually a means to an end. The technology obviously enables us to identify some of those areas where the administration would be previously done by individuals. The technology can help us identify those areas that can be smoothed out by using the technology rather than people to access it. This means those multiple instances that still exist in 2022 of people re keying from one system to another. We should be able to identify those and really challenge the norm of that still going on.
Mia: [00:11:19] It's really interesting that you mention companies having to be brutally honest with themselves because obviously that's not always the easiest thing to do. And from the conversations you're having in the market, are firms more willing to have these conversations and to engage in that kind of introspection?
Olly: [00:11:34] Yes, I think they are. And I think that there is a kind of, you know, maybe it's not a step change, maybe it's a little bump change. It's it's not across the board. And some people are going to be more willing to make changes than others. And and it's really hard because when we talk about change, people always assume that it's a big revolution and sometimes it can just be an evolution of what's being done. And quite often the fear that sits around change is going to be big, expensive. We're going to have to prove in ROI really, really quickly. And that's not the way that other industries look at change. They do allow for maybe a bit more of the fast fail. If we look at tech, especially if you try something out, if it doesn't work well then you know that doesn't work. Rather than always expecting necessarily to do to do a project or change initiative and immediately get a return from it. So I do think there are organizations out there and we are in contact with a number of them that are getting a little bit braver and that's what you need. So after you've had the honesty, you need some bravery because if you see that there's a problem, sometimes you have to change something and that bravery of the organization is required because your change might not work. But what you have done, at least if you've tried it, is know that your your attempt didn't work and that can lead you on another path or send you in another direction with something. So change paralysis through fear is very common. But I see in the market more and more people are willing to make those those changes and willing to give it a go, which is again, just really good. Good for me to see. In the market for a number of years. That willingness to change is getting better. It's not a step change. It's not a revolution, but it's certainly an evolution. And more and more people are jumping on board.
Mia: [00:13:31] After honesty comes bravery. That's great advice right there, Olly. And I know it's never easy for firms to embark on a real transformation journey. And what do you see some of the main mistakes that businesses make when they're looking to invest in change initiatives?
Olly: [00:13:47] Well, as I said, one one of them would be obviously to look for an ROI on any change initiative. And sometimes you won't get. Sometimes it's just not there. One of the key bits for me is that that old kind of phrase, what's in it for me? Often change initiatives. Look at it from a particular angle, sometimes only one angle to say, if we do this change project, maybe it's a new division or a new line of business or a new whatever. They look at the impact of the people directly affected and that that's quite, quite insular to do that. And if you look at what's in it for me of the connected services, connected people, connected stakeholders to that particular change, you're far more likely to uncover things before they become a problem later, because in the end, a change will affect more than the direct people. There'll be more data coming into the organisation or a new distribution. The data that is generated or the business operations that are worked on will then feed to something else. So there has to be a what's in it for me across the value chain, rather than just maybe how, how that initial change is viewed. And if you have that, you you don't guarantee success. Again, I wouldn't wouldn't be as bold to ever say that. But you improve your chance of success and you have to take constant check points of your changes. This happens as well that organisations, they do a change. Right, the project is delivered. Oh good. Okay. It was on time or budget, which would be great. Is it delivering the value though? Is it is it doing what we thought it would do? Because just delivering a project on time and on value is only part of the story you underwent. Whether that be a business or technical project, you underwent that project for a reason. You thought value would be generated and quite often people don't do enough check points, not only just at the very the very first point that the project is ended, but also six months, 12 months afterwards. Is it still going in the direction we expect? Have we now seen something that we couldn't have expected? What do we want to do with that? And that element of review and constant review leads to that continuous improvement and the continuous improvement steps more into that evolutionary stage the companies need to be at. So if you expect change just to be something that you do once and then that is it, that is never going to be the way that you have successful change, because change is a constant. They say the only the only constant is change. And that that is true. And the reviews that you take and the lessons learned and the practical application of the bits that went wrong you try to avoid next time are the way that you can continuously create operational efficiency and excellence as an organisation. The people who who kind of draw a line under it that projects done, tick it off and then forget about it, are the ones who are really not generating that that value proposition they were trying to look for in the first place.
Mia: [00:17:02] A lot of really great insights there Olly and when it's implemented correctly. What does effective system orchestration do for businesses?
Olly: [00:17:11] Appropriate system orchestration really gives you a truly connected organization. And that's what what do I mean by that? So quite often the point solutions or systems inside insurance entities be they carry out broker reinsurance are really good at their specific function that they do. But as I indicated before, in the value chain, there's a kind of concept of left and right. If the if the item we're looking at, when you connect your systems together, there is a better and deeper understanding of how that data is moving through your organization. If it has to come out into manual processing at any point, you start losing the connectivity and understanding of what's going on now. We've tried for years to identify where those things happen and people have workflow systems that will you have work baskets and task baskets of areas that you need to cover. But actually still that's that's pulling it from its overarching process. The more you connect to the systems, the more you can see not only the individual systems and what they're doing, but the in-between systems, the gaps, if you will, between those systems. That understanding helps you as a business, better see the logjams, the roadblocks, the areas that you may need, some burst capacity, because every renewal season of a particular line of business, you know that things are going to get blocked up. If you can start projecting and predicting those things as accurately as possible by looking across your estate through full orchestration of your systems, you have a much greater chance of either reallocating resource or potentially seeking additional resource from other organizations to assist at those times. Because in the end, what you want is as best as possible a smooth and flat process throughout the entire year. We know that's not going to happen if you don't understand truly what's going on inside that process. So the more you connect the systems, the more you understand the process, the more you understand the process, the greater you can work out how to smooth out those peaks and troughs. You don't want people idle. You don't want to suffer roadblocks or blocks in the system because you have too much, too much work or too many things to do. And that's what orchestration gives you. It gives you that insight into the way your organization works, which will then in turn allow you to become more operationally effective.
Mia: [00:19:51] What's clear is that here's a lot of work to do, but also some great rewards if you do manage to implement it correctly. And I know the team at Charles Taylor Insuretech support businesses in a real variety of ways. But I wonder if you could give me a flavor of some of the ways in which you support firms looking to improve these operational efficiencies?
Olly: [00:20:09] Absolutely. And as I said, they're not they're not all tech. I personally work inside are InsureTech Division of Charles Taylor. But we have solutions that we can have outsourced contracts with people where they it could be burst capacity it could be expertise that they don't have in a particular area or they don't have maybe the presence and some of our loss adjusting functions that work globally are able to then give these elements to organizations so that they can have that that far further reach and further and deeper ability to to deal with some of those same kind of peaks and troughs. Sometimes it's the tech doing it, sometimes it's it's people and process and a solution. And the kind of solution in my title doesn't look just at the technology and it is never just about the technology. And Charles Taylor Group, we're uniquely positioned to not just be the insurer tech. That is one of the areas that we have and we are absolutely blessed with having a very long and prestigious background of working in the insurance market. So we are able to see some of these things that we've lived and breathed that for decades, that we can help our clients and prospect clients to navigate through some of these things because we've not seen and done it all. But we've we've seen and done a lot. And our ability to offer not just the technology or not just the business service, but a combination or hybrid of those things really does make quite a big difference to to the people we talk to.
Mia: [00:21:51] I'm looking across the market, it's very clear that there's a lot of different businesses who are looking to really make a change and to implement more effective solutions. And for those companies looking for a bit of support and doing that. Can you tell me what's the best way to get in touch with you in the team?
Olly: [00:22:06] Yeah, absolutely. I mean, we have the website, Charles Telecom has it covers all of our three key areas, the insurer Tech Claims Solutions and Insurance Management. There are forms on there, so you can contact individuals on those particular areas. They often come back to people such as myself to to then go out there and, you know, rubber meets the road. I will sit in people's offices or sit on a teams call and just really try to get get get under the skin of what the problem or potential opportunity. Sometimes people reach out with with nothing but problems as that's where they see that those interactions could exist. But we also deal with a number of clients with opportunities. It will be a new thing or it will be a new division or a new area that they haven't done before. And again, we've got collectively thousands of years of experience across the organisation that we can pull on and and help really try to get to the bottom of something that is going to be helpful and strategically helpful for a number of different organisations in the market.
Mia: [00:23:17] Fantastic. I must say there's a lot of food for thought there Olly and I really do appreciate you sharing your time and your expertise for us here today. Thank you so much.
Olly: [00:23:26] No problem. Very well. Thank you.
Mia: [00:23:28] And thanks to all listening for tuning in. And I look forward to welcoming you back next time here on IB Talk.
Narrator 2: [00:23:35] Thank you for listening to this episode of IBUK Talk. For more from Olly and the team at Charles Taylor, visit them at Charles Taylor. Thank you for listening to IB talk for the latest episodes. Be sure to follow us on SoundCloud, Stitcher and Apple Podcasts.
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