Ten years in insurance – what’s changed, what hasn’t and what needs to?
Curium director and co-founder and insurance sector alumnus, Andy Dawson, reflects on how the sector has changed over the past 10 years. The blog is one of a number celebrating Curium’s 10th anniversary and the industries in which it works.
It is almost 10 years since I left the insurance industry, having spent 17 years working in it. Today, I am frustrated after four months of trying to get a replacement bike following a theft from my shed. I’ve been struggling with the restricted hours of the supplier of the new bike, which only operates Monday to Friday 9am to 5pm.
My insurer concluded my claim by sending a voucher to use on the supplier’s website. The website has proved to be unreliable, with stock no longer available after being promised for 1-2 day delivery. So, rather than ensuring that I am happy and satisfied, we are in a complaint scenario!
I recall similar complaints being raised when I was in the industry 10 years ago, so has the industry moved on?
Industry headlines suggest that a huge amount of change has happened in the last 10 years. New entrants are attempting to disrupt the sector.
Neos is an innovative insurer leveraging the Internet of Things. Homeserve has launched Leakbot aimed reducing the billions spent on Escape of Water claims. Lemonade has disrupted the rental insurance market in the US with a refreshing openness and honesty about how it operates; clearly focused on the customer.
At Curium, I’m privileged to work across many sectors and I see that changes in technology are driving change, but we are yet to reach the tipping point. Artificial intelligence initiatives and robotics are hot topics, but there are still not enough examples of this becoming game changing.
Also, what is apparent is the importance of data. Insurers are hungry for data to help improve risk selection and pricing. This is where the Internet of Things and big data will deliver change in the years to come.
Corporately, there have been a few companies come and go and it seems that all traditional insurers have set up funds to invest in digital initiatives or start-ups, such as Allianz Digital Corporate Ventures. Others such as Aviva and Munich Re have invested not insignificant amounts in businesses such as Neos.
This suggests to me that insurers know that culturally they struggle to change fast enough in what is an ever-changing digital world. It will be interesting to see how the cultures mix when start-up meets traditional insurer!
Touching on culture, change has happened in the last 10 years. The bars around Lloyds of London are quieter these days and there are even rumours that you don’t need to wear ties in the underwriting room! It is also fantastic to see the number of women that are leading businesses; Amanda Blanc and Inga Beale being two high-profile examples.
I now manage my policies / renewals online with minimum fuss, so that works well. However, my personal experience suggests that, from a claims perspective, things are still hit and miss. Claims are the most important part of a customer relationship and I still think that there is much more to do.
The customer is still not king. PPI remains a black cloud hanging over the industry. There are also so many change initiatives out there that have the potential to make a huge difference. However, I think we are still talking potential rather than the here and now.
A final anecdote. Nigel Wilson, CEO at Legal & General has a fantastic track record but, when discussing his latest results, he was pulled up by business reporter Dominc O’Connell for the jargon he used. This is an industry-wide issue and has been for years, but I guess that is where companies like Lemonade come in.