00:00:00 You can outsource capability, but you can't outsource the accountability. >> We buy the utilities, but we sort of build our soul as a business. >> So, we do everything in-house pretty much. >> Hello everyone. Welcome to Insurance Business TV in the debut edition of our Leaders Network on digital transformation. Every month, our guest today, alongside a host of big names across the UK insurance industry, will gather for a virtual discussion delving into everything from data to AI to all

00:00:27  things digital. In this edition, we welcome Paul Waring, Director Information Technology and Chief Security Officer at Blay Grove Underwriting Agency. George Dagnall, Non-Executive Director at Hotspot Cover and Director of Insurance and Partnerships at Concentrix. And Eugene Owusu, Director of Transformation, Global Compliance at Liberty Mutual Insurance. Uh so, to kick us off, gents, I'd love to know what is the biggest piece of technical debt or data quality problem that's still holding your transformation efforts

00:00:59 back? And indeed, how are you actually addressing that? Uh Eugene, let's start with you. >> Thank you, and thanks for having me. Um just to maybe set a bit of context. So, I uh given my background, I look at transformation through a regulatory lens, and that gives me a slightly different, you know, maybe perspective. So, a transformation uh or a technology transformation can be technically successful, uh but might still fail in our eyes if you can't demonstrate the management of risk uh and trace data and

00:01:29 evidence the right customer outcomes for our customers. Uh so, key for me is making sure that conversations include the right uh SMEs and the right regulatory know-hows. Um you know, because, you know, at Liberty, you know, one thing that we're keen on is making sure that, you know, it's integrity first. Now, in terms of technical debt, I think our strongest inner focus is making sure that uh we have the right data lineage and meaning, and people are aware of what uh you know, poor quality

00:02:00 data looks like. In terms of what's holding us back, I would say legacy data, which I'm I'm sure most people are contending with. So, what does the old data looks look like? As we move on to new technologies and new ways of doing things, what is the data that we need to move forward versus what we leave behind and how is it that this data helps us in terms of better understanding of our products, our claims processes, our finance processes and how do we migrate data from our spreadsheets

00:02:33 into the right processes while still maintaining that regulatory understanding and that regulatory focus. So, I think it's an area that we're looking at, but really it's focusing on our people, making sure that they're taking ownership of this data and making sure that they are transforming it and working with it in the right way. And I think AI is helping in some of this work because whereas previously some of this work would have taken ages, we are seeing a marked kind of uptake in

00:03:03 in terms of how people adapt and use AI, which which is a huge area of focus for us internally in the business. But, you know, for us data, you know, like most organization is the lifeblood of, you know, some of the work that we do and we're placing a huge emphasis on making sure that it's it's cleaned up, using the right resources, using the right knowledge, making sure that our SMEs and our people are on top of it and making sure that any migrations or transformations are landing properly

00:03:34 with the right data moving into the the right systems rather than just old data and old information. >> When you're genius coming at this from a regulatory perspective, George, I imagine you're coming at this from a a crisis response perspective. >> Yeah, thank you, Paul, and lovely to be here. So, yeah, I as I guess I'm guessing little bit different from the regulation, but it ties very nicely Uh having, you know, as a non-executive director at Hotspot Cover, which deals

00:04:00 with insurance placement and now as the director and lead from an insurance perspective in a assistance company for security. I think there's different elements to data the way I look at it. Firstly, we're in a data saturation generally at the moment. There's so much data out there from our perspective, from a security and risk perspective. So, I think the first and foremost is is as really making sure our you know, individuals across the business understand what does that data mean and

00:04:27 what's the importance of the data. And then from a perspective of integrating that across carriers, brokers, and clients is sort of technical debt or, you know, quality the problem itself is making sure that the systems that we're taking that data from sending it in the way that we can receive through, you know, like an API, but that the data lands correctly and cleanly. And we're not polluting that data with essentially nonsense, right? Or not nonsense, but moving away a decision maker from

00:04:59 utilizing the data. So, understanding how what data is is being provided is key. And it's also a bit of translation from our side because data to us might be important. However, from a carrier or a broker, their data perspective might be entirely different. So, there's a little bit of translation from two ways. We have big transformation efforts that we that we where we want to go to, but we're trying to walk before we can run and making sure that when we take that data that we understand the data and we

00:05:32 know where it needs to be fitting in and making sure that it doesn't dilute the service that we're trying to offer by just saturating. >> And then, Paul, do you face any challenges in this area? >> Yeah, our biggest challenge is that um lot of our data needs are driven by third parties, so motor insurance database in our case, um carriers, um other third parties. So, we're restricted in what we can and can't do to a certain extent. And then on top of that, the biggest challenge really is

00:06:02 the fact that we run claims handling as well as underwriting. So, claims can go on for years and years, and they can come in, you know, 5 years after a policy's ended, and they can carry on for another 10 years potentially in in some cases. So, we have to be able to support all the data we captured about a claim 2 years ago, still today, maybe still in 5 years' time. And that's a big challenge. So, we get around that by effectively making small incremental changes, which means that we can keep

00:06:32 supporting everything we've already done, and which we have to keep reporting on to our capacity providers, for example, or handling claims, whilst also improving things because there's new regulations coming in, or there's new requirements from our perspective, or we want to basically do things differently and better for our policyholders. So, it's all about that very small incremental change whilst also supporting all the stuff that we've got in the system that has to carry on

00:06:59 being supported for for years and years to come. So, we have to get that balance right between change but not breaking everything that we've already got in the system that's still needed. >> Yeah, well, speaking of change, and I wanted to ask you all, and I appreciate this is kind of going out on a limb a little bit, but about how M&A activity across the UK insurance is is perhaps either accelerating or complicating technology consolidation at your organization. I realize you're not all necessarily M&A experts,

00:07:26 but any thoughts on this one, George? >> Yes, I guess from our perspective, um and having been through a few sort of mergers and acquisitions myself across the market, but looking specifically um in in in my wheelhouse is it's accelerating tech consolidation, um so it's sort of that monopolizing effect but it does frequently complicate the operations by creating sort of fragmented systems or merging sort of policy engines and incident management tools which on first inspection looks

00:07:56 like you're doing something good. You know, you're merging it it it makes things more efficient but we have to also remember that the fragmentation can also like mirror flaws as well. So often risk is that sort of managed in isolation but security designs from our perspective in terms of response plans, travel, handling logistics and executives by the insurance with sort of zero cross talk between them. So the security team from our perspective might draft evacuation protocols totally unaware

00:08:24 that the existing policy or service agreement sort of grants immediate access to specialist assets. So when we're talking about operating in high risk context or generally across the personal accident space or even kidnap and ransom the architecture that we're implementing from an M&A perspective needs to be cross functional. So it needs to be mapped against all of the current requirements that we have and I'm just looking at the human perspective really when we're looking and similar to what

00:08:54 Paul was saying before understanding what everyone needs within that cycle. So when we look at kidnap and ransom there are processes human processes that are super required for the action. So what might look like a great tech product that integrates that acquires it's only when things go wrong do we start to see where that acquisition or that that consolidation from merger and acquisition has caused gaps within that within what we already do. So effectively sure decisions at the top which look very good might cause impacts

00:09:26 at the bottom which they are potentially not unaware of just may have forgotten about because they've sort of rise up the ranks and and and are less on the ground. >> Yeah, makes sense and of course Paul you're primarily with brokers. So, what are the challenges there? >> Yeah, so we we deal with a a panel of brokers, hundreds of them, and there's always mergers and acquisitions going on in the broker market. The challenge for us then becomes how do we manage that on our system? So, some brokers will want

00:09:56 to transfer all their business across to the new broker. Some will want to leave any legacy stuff in place, but do all new business on the new new account. Some will want to do everything in one go. Some will want to perhaps move policies over as they come up for renewal. So, it's we have to support all of those possible combinations whilst still making sure that we can do our invoicing and accounts and claims and everything. So, it doesn't impact us from a technology perspective apart from the fact that we

00:10:26 have to support lots of different possibilities and it's such a regular occurrence that we have to have procedures in place in the system to support that. It's not something that we just do as a one-off, you know, once a year. It's probably every month we get brokers merging and acquiring each other and going out of business and all that kind of stuff. So, it it does have an impact on our on our processes and we have to be able to handle all the possible combinations. >> You know, broker M&A market is certainly

00:10:53 a hot one. And and Eugene, just to go back to something that George mentioned, he spoke a little bit about board buying. That's that's really crucial here, isn't it? >> Oh, no, absolutely. I think without board buying it becomes very difficult to to, you know, to get the buying of the business, you know, generally when it comes to M&A's. Now, I can speak less from direct experience, but more on a general basis from what I've seen maybe within a market rather than at liberty,

00:11:21 but absolutely, you need that board buying, but then you need the the buying of the senior leaders, the business below it, making sure that everybody is on board. And I think one of the challenges is that, you know, at a very high level from the board, it's it's a great idea bringing two organizations together and looking at the synergies, you know, and the you know, and and the saving in resource that can be can be achieved on a practical kind of transformation level. You then get into what are the cultures

00:11:52 between the between the teams, what do the controls look like, how can we simplify and make sure people are speaking from the same place, and even down to how people turn things or or define things, it becomes a challenge which needs to be worked through. From my perspective, a key thing is how do we make sure that controls start to work across the board, and how do we make sure that we remove some of the silos that exist and making sure that we have the you know, you have the right governance,

00:12:23 the right risk and control taxonomies in place, and we are you know, you're making the right regulatory interpretations. Now, that's a focus of my work, obviously, but it's a challenge which, you know, has so many different arms and legs, and eventually that kind of day one complexity, you know, in a lot of cases, manages to work itself, but not without a lot of pain, discussions, and a lot of communication. When it comes to the technology as well, my experience has been you start from the position of

00:12:56 issue technologies and make you sure that transformation is effective. You have to make sure that, you know, you get the right buy-in and also going as far as defining the why. Why are we doing this and what is this going to look like for the business once we've been through that transformation curve is something that I've found has been very, very important in making sure people are going along on the journey. So, that's my view. A bit a bit less kind of on on on as the as the rest of the ground is, but yeah,

00:13:29 hopefully it's a worthwhile contribution. >> Well, speaking of of taking people on the journey, I'd love to know where you guys are sort of seeing building in-house versus perhaps relying on on vendors. And indeed, what's what's driving that decision? Paul, what are you saying? >> So, we do everything in-house pretty much. So, we have our own in-house platform that does underwriting, claims, accounts, reporting, pretty much pretty much everything apart from email. Um so, everything we do is is based on

00:13:58 that. We're hiring some new people at the moment to to deal with that. Um we've got a lot of changes coming along, particularly with claims. Um so, we need new people for that. We also do skill skills audits occasionally to find out where our gaps are um and then fill those with either training and hiring. Um but it's a case of always trying to keep up with all the changes that have been made. Um and we we update our production system probably several times a week uh [clears throat] in order to keep ahead

00:14:28 of all that. And in order to do small changes rather than one big change every quarter, uh which can be quite disruptive. So, it's it's very small but regular incremental changes is how we keep uh on top of all of this. >> I suppose doing everything entirely in-house, but Eugene, obviously, you know, for a company of your size, what are the the key understandings for you on I guess what you need in-house and and what you don't? >> For me, a key testament this kind of is always at the back of my mind is that

00:14:57  you can outsource or use vendors. Uh you know, you can outsource capability, but you can't outsource the accountability. You know, so, from a regulatory perspective, that very much sits with us. And so, the test is, you know, which uh capabilities can we outsource to um to to vendors or can we use third-party vendors for versus what do we keep out in-house? Now, for me, it's very important that when it comes to our products, customers, that controls our risk appetite, we always retain that

00:15:27 level of knowledge and capability in-house, but also making sure that we're using the right technology and the best technology out there. So, we we have a you know, we have a healthy balance between, you know, retaining in-house versus, you know, building in-house versus using vendors, you know, and I think it comes down to what are we happy to to to use vendors for versus where do we need to keep that knowledge and that deep understanding of our markets, our jurisdictions, you know, how our people

00:15:58 work, and how can we also grow our people in terms of their knowledge, you know, when it comes to using technology. With the advent of AI as well, I think our people are able to do more, and so it's important that we are helping them along on that journey and working with them to build those skills that we need to have in-house, but also very much with a view of what's happening, you know, widely within the market, what vendors are developing, how this is making things more efficient and effective, and how can we optimize

00:16:32 our offerings and and the business using those those services. So, it is something that I mean, we we've got to get balance. >> And what are you taking into consideration here as well, George? >> Yeah, so I guess when lying on vendors for us will be sort of commodity infrastructure or cloud hosting, CRM tools, standard communication rails, anything that sort of doesn't really involve our sort of core IP, if you like, but for a business that deals with intelligence, triage protocols, and and that how we

00:17:01 intervene, which is where our bread and butter is, is how we support the carriers, the brokers, the individuals on the ground, we have to take ownership of that because that's that's us, and it's understanding what is the our element in in in the service and not relying upon a vendor that can say we you can do it all because ultimately you are chained to growth on their technology. So, we have already built in-house technology to capture data so that we can streamline our protocols,

00:17:31 human intervention, but combines with the vendors that we're working with. So, you know, I guess we we buy the utilities, but we sort of build our soul as a business. So, and it's also about not wasting capital on on software that that we can do on our own and we can effectively maintain it in the long run from it better and cheaper. But, entirely we need to keep where our expertise and human empathy effectively intersect with the technology. Otherwise, we're going to find ourselves in a similar space to

00:18:03 everyone else because if everyone relying on the vendors and that's their IP, then someone at some point or a company at some point will do it better. So, it's about knowing where we fit in and where the vendors fit in and if there is an idea where we can do something that a vendor does better, then we start to build it slow over time and and integrate the systems that we already have. >> Yeah, makes sense. And I just want to throw one final question at all of you if I can, which is

00:18:29 >> [gasps] >> basically, you know, when you're looking at the the internal hiring side of things. I'd love to know how you're closing the the skills gap, so to speak. So, are you retraining your existing staff in new roles or perhaps hiring fresh talent specifically for transformation work? Eugene, how are you approaching things? >> You know, I think we've got a very healthy balance. So, for transformation, obviously there's there's a lot of knowledge out there in the market and

00:18:54 where it's appropriate and we need that knowledge and we need that that kind of capability. You know, we will look at hiring, but the one thing that I'm proud of is where you know, where our transformation efforts are within Liberty, our people are really the backbone of it. So, having the our kind of subject matter experts who know their jurisdictions, they know their products, they know the work that they do, they know their customers and what the right outcomes are for those customers.

00:19:20 They've very much been involved in in in that transformation work because they bring a certain level of understanding of our culture and our focus on on integrity when it comes to achieving with our clients. What you can't simply get by by hiring. So, what we do is use that knowledge, you know, making sure that they are trained or retrained. You know, with any change there's a level of being retrained and understanding what what the new world looks like, but we very much support that.

00:19:49 You know, we have a huge focus on a huge focus on change management and we take people along with that journey, but also making sure that where we need to hire to make sure that transformation is running well and is it's going the right way. We, you know, we hire, but I think it's a bringing those two pairs together, in-house teams who are trained and understand who we are as an organization, but also bringing new talent where it's needed to to bring a new way or view of doing things.

00:20:23 >> Yeah, I guess above all, George, human knowledge really does remain imperative here, doesn't it? >> Yeah, exactly. And I guess, you know, when we talk about medical crisis, kidnap and ransom, anything where the response hasn't I don't feel like a little bit of a parrot from what I'm what I'm saying before, but you can imagine those skills and that development cannot be easily replaced by just hiring sort of tech native individuals. But we've very much understood that and so, I guess from our

00:20:50 perspective, we're hiring talent that is aligned to transformation work, but has an interest in this area. And the first point of call is to make sure that they understand our area, they learn how it works, they digest everything before they start trying to think about the tech development because you imagine if you bring in someone who's tech focused, they'll say, "Hey, you can do this. You can change this. It's fine." But then only until they start to digest and understand the systems and the reason

00:21:19 why the systems work, they go, "Actually, that way of technological development is going to cut off what you're doing here." So, for us it's about bringing them in to understand the business that that we're in and what we need to achieve and then being able to develop alongside that. So, effectively, almost like upskilling uh individuals that have the capacity to transform and they effectively become sort of, you know, the the hive mind of that technological crossover. And it's a

00:21:44 translation between two, uh you know, both parties teach each other. They say, "Well, how can we do this from a tech perspective?" Well, you could do this. This is how much it's going to help here. It's funny because we talk about transformation, cutting costs, and making things more efficient, but actually at the start, I think it's investment of time and individuals to learn. Um but I imagine this whole, you know, this methodology for larger businesses could be more difficult because of the

00:22:07 flexibility and agility they have or signing things off or trying to get the the the board themselves to understand the the route to which which needs to be done. It it involves that investment of time. And so, yeah, I think unless they I don't understand the nuance of uh you know, some of the situations that that they might need to to be developed, they won't be able to transform it. So, we have to elevate the subject matter of understanding, sort of blending that human wisdom with the digital tool set.

00:22:38 >> Okay. And then Paul, of course, you've mentioned a little bit earlier that you did a skills audit recently. >> Yeah, so we have a matrix of skills that we need um to support the business from a technology perspective. And we looked at that and thought, "Okay, well, some areas we can improve with training and we're organizing that. Others we might want to hire either because we're missing a skill set or we've not got quite enough capacity for it." Um the biggest challenge by far though is

00:23:04 always the domain specific knowledge in insurance because most people don't deal with insurance, certainly not the complex or technical aspects of insurance on a daily basis. Um, it's not like going to work for a supermarket or something where everyone kind of knows what a supermarket looks like. So, when we bring in technical people, we have to build up their insurance knowledge gradually of things like how does insurance premium tax work? You know, how does commission work? Um, how do claims how do claims

00:23:32 work? Cuz most people haven't actually had much day-to-day exposure to that. So, it's not just the technical knowledge, but it's the domain specific insurance knowledge that's always the the big challenge because people just don't don't know how insurance works as as an industry because they've never needed to before. Um, so that that's always the biggest challenge and it's it's sometimes not seen as perhaps the most exciting or interesting industry. Um, I

00:23:58 think it is, but I'm I'm probably a bit unusual in that amongst tech people. >> Uh, you've got plenty of people who are on your side on that one, Paul, I think on this call, but uh, indeed great thoughts indeed and a brilliant panel. Huge thanks to to everyone for your time today. Of course, remember this group alongside a host of other big names from across the UK insurance industry will be meeting monthly. So, stay tuned right here on Insurance Business TV. >> [music]