By Graham Newman, European Product Marketing Manager, FINEOS
In my last blog I talked about innovation in the London Market and how it is essential for the Market to survive and thrive. I looked at some of the questions I had encountered in researching a White Paper on innovation in the London Market and how FINEOS can support it. Questions such as:
Does the market believe it is innovative?
Where should innovation focus?
Can the Market embrace technology for the right reasons?
A good place to start prior to innovating away to your heart’s content is with what the customers actually want. There are many services and improvements that customers of the London Market want, and probably quite a few they don’t even know about yet, but be aware, new needs and demands are coming to life all the time. Let’s consider just a few of them.
Better risk assessment and pricing.
We see a continuous need to ensure that the interpretation of the likelihood of the risk occurring and the financial losses it will generate if it does must be at the forefront of global thinking. The technical expertise of the London Market has always been in the vanguard but competition from other quarters is strong, and is not likely to give up easily. An important and unavoidable driver for continuous renewal of talent is that the nature of risks is constantly changing and being added to as industry and society find ever new ways of things going wrong and losing money. What is needed is not necessarily cheaper pricing of risk but ensuring that the pricing always accurately reflects the cost of the loss event, as the loss events themselves evolve and change. This is certainly a candidate for continual development of expertise, but does it need real innovation, or just increasing competence?
More advice and guidance in the claim
As businesses become more complex and inter-dependent, recovering from a loss and resuming normal activity can become more difficult and involve more and more services and interested parties. Being able to use the experience the claims department has with previous, similar losses puts insurers in a position to provide assistance with services and dealing with business interruption – finding replacements, understanding when to repair and when to replace, helping the client to access available services and also assistance with cash flow.
This could be an area for significant improvement and provide real competitive differentiation from the current practice of just writing a cheque. This is a big area of innovation in personal disability, involving rehabilitation and return-to-work where FINEOS has strong market leadership and is working closely with insurers on new techniques that are making big personal and financial differences. Shouldn’t it be going the same way in large, complex specialty? This demands a radical rethink of skills, relationships, supply chain etc. but if insurers can help their commercial customers get the show back on the road, (or in the air for the Aviation underwriters), then they can claim good differentiation.
I suggest that being able to resource and deploy such expertise in addition to the existing strong claims services will require new thinking and I am certain we will see innovation in this area.
More effective and timely communication
I have written on this topic before and I am certain this area is ripe for change. Technology itself has changed the way in which we can communicate by giving us more channels and a different sense of immediacy. New forms of social technology have generated different expectations for communication not just around speed but also in collaboration.
In this field we can be pretty confident of saying that one of the important things the client needs is never having to ask for an update. No-one wants to be asked by their Board, “So, what’s the status on this big claim we have going on?” and finding themselves mumbling something along the lines of “Well, as far as I am aware . . . “. I think we will see innovation around communication and collaboration – well, I hope we do because I think it is essential if the Market is to continue providing world-leading service in the years to come.
Well, this is inevitable really. We continually have to do things faster, more accurately more effectively and good technology will always be at the heart of this. Real innovation will come when technology is used to create a different kind of advantage, not just doing the same things faster, or more reliably, but by being able to see where new technology, (cliché alert), opens up a whole new paradigm. This is where it is used to do things in fresh ways that may not have been thought of even by the creators of the technology.
This is a feature of modern technology; the way it is adopted and co-opted into a variety of tasks that even the creators did not anticipate. Smartphones, tablets, social media etc. are all being used in ever more inventive and creative ways. We will soon see new technology being used in the London Market to add to the value already there, to bring innovation that benefits the customers – they’re the ones who need it.
It would be interesting if insurers in the Market were to ask their customers whether they thought the Market was innovative enough, whether they felt it was more or less innovative than they themselves were. To gain clarity on what types of modernisation was wanted by the customers themselves would not give a complete picture, as we don’t always know what we will find useful until someone else does it and we see how useful it is, what we might call the “Sony Walkman advance”.
Your comments, as always, are most welcome.