Three lessons I’ve learned about digitisation from 26 years in the reinsurance industry

I’ve worked in the reinsurance sector for over 26 years now, most notably leading P&C Re OPS (technical accounting and claims operations) applications globally for reinsurer, Swiss Re, and now working as a consultant helping reinsurance companies bring together the best of people, process and technology to achieve high-performing and sustainable operations units.

I have been at the forefront of digital transformation within the sector, deploying process automation across claims, IT and accounting functions and leading on wide-scale OPS transformation projects.

With this, it’s fair to say I have seen and experienced a myriad of outcomes when it comes to digitisation efforts within the industry. There is a lot to think about to deliver a successful digitisation and automation strategy and it requires us to step back and plan for the big change. Below I’ve detailed some of the key lessons I, for one, have learned throughout the past 26 years and what it takes to achieve digitisation successfully.

1. People are the key ingredient

To me, people are the key ingredient to business success, despite whatever the latest developments will lead you to believe. Yes - technology is advanced in the financial sector when it comes to routine tasks or when a lot of data needs to be analysed. There’s no way around handing over this work to computers. Manually entering premiums and claims into a system does not provide a lot of value and, in my opinion, there is no business case to be made anymore for not automating it.

Nevertheless, technology still lacks when complex, non-standard tasks need to be fulfilled or when creativity is necessary. This requires human interaction, communication, and empathy… all skills which technology has not yet (and most likely, will not ever have) mastered.

Hence, there needs to be a point where digitisation enables a shift for humans from routine functions to tasks where they can add value and make a real difference. In my experience, consulting those using more manual processes, and then streamlining those processes to be fit for purpose is the first step before digitising. It shows organisational investment in the experience and opinions of your people and is the best way to go when engendering support and buy-in before introducing change. Thus, clearly defined aspirations and a roadmap for change which all have contributed, are key requirements to transition an ops organisation from manual to automatic.

2. Communication and mutual respect between Business and IT is crucial

It cannot and should not be expected that business leaders have the full understanding of IT, or that IT people have the full understanding of business leaders. And yet both need to be aware of, and respect, what the other both does and needs in order to implement digitisation and automation to any degree of success. At the end of the day, IT is there to support and enable progress, not necessarily to define it.

The concept of design thinking is an important one in this train of thought. It’s an approach often used to engage people in developmental processes and, as Harvard Business School Online states, when focused on human-centred design, it can bridge the gap between business and IT by allowing mutual respect to be nurtured. After all, businesses won't be able to operate without IT and IT is heavily dependent on business.

In my experience, the projects that succeed are the ones where business leaders co-create a vision with IT, dedicate sufficient resources and push the teams reporting to them to drive things forward. Without this working together and a fostering of respect, digitisation efforts are very difficult to progress successfully.

3. End-to-end thinking matched with simplicity is what will drive successful digitisation efforts

For this last lesson, I want to apply it to the processing of technical accounting and claims transactions. These are not things that are done in isolation, or that can be fulfilled without upstream and downstream processes. OPS is a function that sits between upstream and downstream clients - therefore it must ensure that its process thinking is end-to-end (E2E) rather than in a silo.

Of course, once a technical accounting or claims document arrives there's no need to involve upstream or downstream units anymore, BUT, it remains important that all structures necessary for efficient processing are available and ready. If a contract is not captured correctly, it has all already fallen apart.

All this is to say that we must keep things simple. There are always exceptions and occasional necessary complexities. However, they are certainly not the 'norm' and a process should not be designed around the most complex case that we can think of.

Essentially, one should standardise and clean up processes BEFORE embarking on the path to digitisation and automation.

I could talk about these topics all day so I truly mean it when I say if you’ve got any digitisation queries within your reinsurance company - contact me to get in touch!