In this episode Matthew Grant chats to Sean Ringsted about how Chubb is introducing innovation across the company and he gives some tips to help anyone starting up a new business aimed at selling to insurers.
Sean is Executive Vice President for Chubb Group reporting directly into CEO Evan Greenberg. Sean leads Chubb’s digital efforts aimed at transforming the company into a digitally integrated organization. Sean has 25 years of experience in the insurance industry. He was appointed Chief Digital Officer in 2017 and has served as the company’s Chief Risk Officer since 2008, prior to ACE’s acquisition of Chubb in 2016.
Chubb provides insurance in property and casualty, accident and health, reinsurance, and life insurance. The company has a presence in 54 countries and territories, as well as Lloyd's, and is the world’s largest publicly traded property and casualty insurer. Chubb is a corporate member of Instech London. Matthew and Sean discuss what it means to innovate in a large company, how Sean keeps up to date with the latest information, the role of Linkedin, and the future of IOT for insurance.
Transcript for this podcast
00:00 Sean Ringsted: An area of innovation I'm particularly bullish about is the internet of things.
00:08 Matthew Grant: Welcome to the InsTech London Podcast, this is Matthew Grant, one of the partners at InsTech London. In this episode, I'm talking to Sean Ringsted, Chief Digital Officer at Chubb. Sean has been Chief Actuary, and then Chief Risk Officer for over 15 years, originally at ACE which acquired Chubb in 2016. He took on the newly created role of Chief Digital Officer, reporting to CEO, Evan Greenberg back in 2017. Now, Sean lives in Bermuda, we caught up when he was over in London, he travels widely. He is a big fan of the potential from the Internet of things, or IoT. And in our discussion, he shared a lot of practical advice about areas to focus on, for anyone building a technology business and a hint of some of the things to come from Chubb.
01:03 Matthew Grant: I'm joined today by Sean Ringsted, Chief Digital Officer of Chubb. Sean, thanks for carving out time from, I know, what is a busy schedule for you. We've known each other a long time. Given that we are talking about sharing information, how do you personally learn about what's happening out and about, both in the industry and, as we're talking about innovation, in the new companies that are emerging and new technologies that are emerging?
01:31 Sean Ringsted: Well, good morning. It's nice to see you, Matthew. Be curious, and you have to explore things outside of your knowledge and your comfort zone. So I read a lot, there's an awful lot through tools such as LinkedIn. But notwithstanding digital, I’m a big believer in going out and meeting people and spending time with people in different places.
01:57 MG: Yeah, well I actually use you as an example of how LinkedIn is changing. Because five years ago, you rarely found somebody in a senior position posting on LinkedIn. And so my example is if Sean Ringsted takes the time to comment on LinkedIn, then I'm guessing you're also reading on there - it's an indication that LinkedIn has become increasingly valuable as a way of sharing information.
02:19 SR: It is a terrific source of information, it's still digital alone, you're still consuming it digitally. And ironically though, there's no substitute for meeting people or going to see how companies are doing things, or a new tech start-up. And you look people in the eye and you can tell if it's real or not.
02:38 MG: Yes, you’ve got a pretty hectic travel schedule. Usually, when I talk to you, you're in a different part of the world. But we're here to talk about your role and Chubb and what Chubb is doing digitally. So, you have been in this role, I guess, what, about a couple of years now? So how is your vision for what the digital future for Chubb should look like evolved over that time?
03:00 SR: It remains the same, I think it's a really exciting vision. And I think, not everybody's familiar with insurance, but I think insurance is incredibly exciting, and it is what makes economies work, and societies work. You can't do anything without insurance. And so as everyone digitizes, insurance has to digitize too. And so we want to be part of that. And it's not that everything within Chubb is going to become digital. We're not going to be a digital company that way, but we're going to be a company that competes and succeeds in a digital age, with a customer that's very much front and centre of everything that we do. So it's a very, very exciting vision.
03:47 MG: And talking about the customer then, what changes are you seeing and what their expectations are for you as a partner and insurer for them?
03:55 SR: Well, I think all customers, whether it's on the personal side, or the business side, we've all been now conditioned to that Amazon experience. I want it here, I want it now and I want it personalized to me. And I think it... First person foremost, is putting everything that we do, whether it's product and service, has to be customer centred. You're thinking about how a customer accesses our product and service, you're thinking about how we communicate with customers. And you want to do that all... Notwithstanding digital, but you do want to do that with a human touch. And that's always going to be so important for us. And not losing sight. We're in the claims business and we pay claims. And in an example I gave us a couple of years back, two years ago, in the hurricanes, we answered 98% of all calls within milliseconds, seconds. And that wasn't done by robots, each call, was answered by a human. So it's making the access points for a customer digital, where it makes sense, underpinned with a human touch. And then it's about the actual product and service we provide, by making sure that that's relevant today. So, exposures are changing and shifting in different ways, we want to simplify the product and explain the product better. And providing new types of services to customers over and beyond the traditional just paying a claim.
05:41 MG: One of my experiences of Chubb is being that you tend not to get ahead yourself in terms of talking about what you're doing. You tend to get up and doing it, and then you announce it, and there's some pretty significant partnerships in there. So, in the extent that you can share with us some of the things that are going on, in a way or more, maybe more generally, where do you see some of the greatest opportunities for innovation with the technology that's either out there today or technology you see coming in the near future.
06:13 SR: Well, you're right, we're very execution-focused, and partnerships have been a very big part of our digital efforts, and partnering with players around, major players around the globe for digital, and that acts as a catalyst for innovation, because you're front and centre now in terms of how to provide product with the partner to a customer. So I think that's been very, very crucial for us in how we innovate. You can think of innovation in... Whether it's product. So product innovation is incredibly important for insurance. It has to adapt, it has to evolve, as I mentioned earlier, It has to be simpler and more understandable.
07:06 SR: But you think of... For example, we're partnered with Grab, which is the Asia equivalent of Uber. And now you're thinking about product that's for a driver, a passenger, and it's real time. It's a different type of product than, say, we might have offered five, 10 years ago in a traditional insurance sense. You think of innovation in the service area. So some examples of that would be what we're doing in the stage for our high net worth book there, in terms of the risk management services that we're providing. And much of that is digitally enabled, whether that's wild fire alerts, hurricane alerts. Or just providing, say, I'm driving home and you may not want to go that way because the storm's coming this way to an area of innovation I'm particularly bullish about, and that's the Internet of things.
08:03 SR: And I think, increasingly, with the cost of sensors, etcetera, coming down on 5G, the ability to connect sensors, whether it's around building or people or mobile assets, I think is really going to change how we think about insurance. All of those, the examples that I gave in terms of product or in service, etcetera. All of those are underpinned by changes in technology. And I think we discuss a lot, we focus on something, and that was flavour of the month in terms of tech, and it's going to solve everything. But it's important, I think, to put the problem first, what you're trying to do. And then often the technologies that you're knitting together to enable that, it's going to be a mix of things. So if I'm trying to enable something that's real time, so it's the trip earlier that I mentioned, or a car, you're going to need Cloud, you're going to need artificial intelligence in that. Whereas say something like the IoT, and the sensor is going to need a different mix of technologies.
09:20 MG: So just going back to that last point about IoT, but also putting the problem first. One of the challenges up to date has been getting corporate's enterprises to share the data with their insurer and finding out suddenly. Other insurance companies I've spoken to find it difficult to actually work out their way into that world. I mean, there's a few things happening on the personal line side. But have you seen opportunities where you can actually demonstrate value to your end client over and above. You'll adjust your premium because they've got a sensor. But how do you encourage them to share the data with you, that they are themselves generating?
10:04 SR: Well, I think that you're right, there's a distinction on the consumer side and on the commercial side, and you have to be very mindful of regulation and data privacy, data security, etcetera. So I think the trend will start to be quicker on the commercial side than it is on the personal side. And then clearly, you have a different service proposition and discussion with a commercial client about the value of sharing that information.
10:36 MG: So how do you create an environment of innovation and the balance between looking at a solution and looking at technology? So what are examples of where you've created a space in the company to enable people to look at opportunities? They may not be either a direct part of their job today, or certainly, many cases are not going to pay off for time periods beyond the one-year they tend to get rewarded for in a traditional work environment.
11:08 SR: It's a great question. There's a lot of energy and excitement around the company with digital and innovation. And you asked me earlier about how I get my information. Well, everybody else around the organization is doing the same thing, we're all curious, we talk to people, we're out there in the day-to-day. So I think the balance is to make sure that you're very focused on the... Again, I come back to the problem that you're trying to solve, it really is innovation for innovation's sake. And so maybe you just have to be so focused on what the business problem is that you're trying to solve, and then understand those parameters, and then you bring to bear the tools that you're thinking to help with the problem statement. So that could... Mentioned the customer experience. So that's something that we're very, very focused on in our personal lines book in the States, and making that customer experience the best that it can be. We're very focused on what we call two-question underwriting. So in the States and elsewhere, how can we simplify the underwriting process, the customer experience, and the underwriting insights just by knowing two answers, three answers better from our customers. So being very focused in these areas.
12:38 SR: Partnerships, as I mentioned, are very important for us. So making sure that we're set up, in a way, organizationally, and then how those teams work and operate "agile" is important. We've not set up in a way where we have an "innovation lab" that's sitting there somewhere. We've got innovation but it's harnessed very much with the business problem in mind.
13:11 MG: And then to that latter point, I mean, I've certainly met a few people in Chubb who either got a title of innovation or they tell me they're part of an innovation group. So I assume you've got some people out there looking after that particular role. That's a challenge though, that many companies have, and it's interesting how you resolve this, where ideas can start in that group, but at some point they have to find a home in the core business. So back to this point about, if you've got people with their day job, are they going to go and get something done? How do you ensure that the ideas that come in, the people involved in bringing in the new ideas, scanning the horizons, are actually able to successfully deploy those into the businesses? I understand it's part of the strategic arms of the company. But that's often where you got many large insurance organizations that have failed and certainly people bringing ideas into company have struggled, they can get to be pier C, but they don't get beyond that.
14:08 SR: Well, I say all of this in a humble way. I'm not saying we've got it right. You encounter some dead ends in what you do, but you just have to get up again and keep going. You just have to be relentless and focused on this. And I think, by harnessing it to a business problem and solving that in a meaningful way, then we can do two things. We can continue to go deeper in solving that business problem, but given the size of the organization, we can now take what we've learned there and apply that around the rest of the organization, knowing that it's been successful in this application. So to me, it's about focus, it's about execution and you have just got to be relentless. Nine days out of 10, you fail. And you have that one day out of 10, and it's a good day. And that's what you have to be. You don't want butterflies who just go around from project to project, you need people who are just going to be relentless, and a will to succeed.
15:16 MG: Okay, I'm trying to think what the animal would be though, if it was a... If you take the equivalent of a butterfly... Oh, they'll turn into a butterfly and would keep going, bash its head against the wall and... But anyway...
15:26 SR: It's not a woodpecker, but it's something a bit more ferocious than a woodpecker.
15:30 MG: We'll take it and put it on that one. Well, I guess the other thing, you're maybe just either too modest or too close to it to see. But certainly in my perspective, having yourself reporting to the CEO, and Evan Greenberg, who clearly makes his part of the strategic part of the company, you've got the heritage of ACE, that in itself was an Internet company. Yeah, but it starts from the top. And I think for people who are then, within the business and can see that it's not just got support from the top, but it's actually a meaningful part of how the company grows. That must make a big difference in terms of, as you said, people just, they keep going, if they fail, they know that ultimately they're going to get rewarded for success.
16:08 SR: You're right, it starts from the top and then, and the other, I think, for us, is being part of the business, it's not separate scaffolding over there and it's... Or, what are these guys done today? You're in there, you're part of the business, and you've got the business support. And, as you say, the top-down support from Evan, who's been a terrific supporter of it all. His colleagues and then, board support as well. So you’re top-down and part of the business. Well, time will tell, but I think it fills the right model. And so usually, when things feel right, that's a good sign.
16:50 MG: Good, let's just talk a little bit about partnership. You've had a number of well publicised partnerships out there. Most of them... You mentioned Grab, Banco is another one. There's, I heard of one recently for Malaysia for a telecoms company. But most of them seem to be fairly large organizations that have already got an established presence, or have grown quickly with good funding. But how do you see the balance between working with established organizations, maybe coming in from outside of insurance with the classic idea of a start-up, of a couple of people with a good idea, but still fairly early stage?
17:27 SR: Well, it depends what the start-up's doing. So the partnerships that we've announced, you mentioned Grab, DBS out in Asia are great partners, in Latin America Banco de Chile, and Citibanamex, Mexico and Chile, both very large banks with a great pedigree. So we've announced more, what I would call partnership customer-facing-type deals. We do work and we partner across a range of tech providers, literally four people in the garage right up to bigger ones. So it really does depend on what you're trying to solve for.
18:15 MG: And on that point. So people that do have an idea, they want to present to Chubb, what's the best way for them to speak to the organisation?
18:25 SR: Have a very clear business purpose and a rationale. Have a very clear approach to how you're going to succeed. And a proof of concept, and you start small and you prove something out to get scale. So, it's a competitive world out there, so good luck.
18:55 MG: But whose door do they knock on in Chubb once they've got their act together and want to get in and talk to somebody?
19:00 SR: Come and knock on my door.
19:02 MG: Well, be careful what you wish for.
19:09 SR: I'll present three doors. I may be behind one of them.
19:11 MG: You've got to figure out the secret code. Well, come along to InsTech, and you’ve got some of your colleagues there. They're having a formal chat over a drink and a pizza.
19:22 SR: We're very friendly, but we're very execution-orientated.
19:29 MG: That's great. It's the only way to do it. So we haven't talked about Blockchain yet. It'd be good to know what you're seeing specifically as opportunities that may come out of Blockchain this year or next year.
19:45 SR: I think the best thing to happen to Blockchain was Bitcoin, and the worst thing was Bitcoin. So there's a lot of noise. And it's interesting to me, right? That you... When you're in discussions with a range of people, you spend a lot of time trying to explain the technology. And I think about other use cases and applications, and people always take the technology for granted, and it is about what you're going to do with it. I think, from what I've seen, the technology broadly works. And the question is not so much around, "Does the tech work?" It's, "Is the industry ready to use it?" because the benefits accrue to the more people that participate. And so I think it's almost a game theory-type discussion. And you've got a number of companies in the industry who are sitting around the pool and everyone is looking at each other saying, "I wonder how cold the water is?" Well, you don't know until you jump in. And you've got people still in the changing rooms, who haven't come out of the changing room yet.
21:00 SR: But you need some folks to jump in the pool. And in that way, that's how you're going to get the benefit of scale and data exchange. And there are promising models around how the industry might use that technology that are starting to emerge. You think subrogation, you think re-insurance. There are a number of areas where the industry is inefficient about data exchange. So I think it's less about the technology and I think it's more about industries' willingness to jump into the pool.
21:41 MG: Alright. So it sounds like it's still too early to take a specific view on what you might see coming out from V3I or anybody else in the next 12 months.
21:50 SR: Yeah, because I think it's that you're now having a different discussion. I believe it's not really around, "Does the technology work?" The discussion is around market practices and what's the cost benefit and the willingness of individual players? And collectively, to change business models that have been unchanged for 20 or 30 years. So, I don't have a crystal ball on that. But that's a different level and set of discussions that are going to have to take place and now are taking place.
22:26 MG: You don't have a crystal ball, but I think you've got a better view into that than many of us do. So what other digital technologies do you have the greatest hopes for in the short term, say in the next couple of years? You talked about a couple: Blockchain, we talked about IOT. But in the sense of actually things that really will make a difference in that short horizon. Is there anything there that you're particularly excited about?
22:52 SR: Well, yeah. For me, I think it is the Internet of things. I mean, there are a lot of enablers out there, and clearly the pace continues to quicken, whether it's cloud, whether it's 5G, all of these are going to be very, very important enablers. I think the Internet of things is a big one. It has the potential to have such a profound impact in terms of how the industry prices or how it assesses risk exposure and the prices for it, whether it's a building, a car, or you as a person. When I say "Internet of things," it spans the wearables and on the life and age side. So it's a pretty broad and encompassing technology. I would say, as well, that you do have technologies, increasingly you start to get a glimmer, and some of it is real, particularly in Europe. If you think of GDPR, of how regulators, and ultimately, this is going to ripple through society and up into politicians, but how some of this is going to be regulated. And that could slow down some of this, and for good reason. But that's going to be a balancing force on some of the potential and how it might be applied.
24:24 MG: Yeah, I mean, balancing force. But also, to me, it's a third leg of what drives. And certainly, insurance-based innovation, you'll be the first to help to make money or help to save money. But, certainly, if you look back at businesses that have grown... Yeah, including where we've, first came across each other in the world of catastrophe modeling. That was originally driven by regulation and rating agencies. So you're absolutely right, that's the lot lurking beneath the surface. So, Sean, Chubb announced last year a partnership with Hartford Steam Boiler to get access to sensitive data from corporate. You've talked generally about how you see that being one of the areas that's going to be the most... Where the greatest advance is in the next couple of years. But just more specifically, do you think about whether it's buildings or machinery breakdown or wearables, which ones do you think are going to be the most noticeable and have the most impact from... Just back to where we started, from your customer's perspective in that two-year timeframe?
25:21 SR: I think it will be across the board, Mathew. I mean, we're very excited by the partnership with Steam Boiler. It's consumerist as well as corporate. On the consumer side, we see a number of applications, whether it's the predict and prevent-type approach, with picking up a change in water pressure. We have boilers about to blow in the basement. And now you're down a new service model paradigm where, not only am I reimbursing you for that, but I've also saved you an incredible amount of time and trouble. If you happen... You've got a very nice vacation home and you happen to be away, but now you've gotten an alert saying that something's happened there. So that service model is starting to evolve. On the commercial side, I think, across the industry, there's a general issue with water-type loss in commercial buildings. And so I would see sensors making a significant impact in that area, to increasingly in industrial-type facilities, wearables, preventing workers being in dangerous zones. And they're all emerging at different paces because you do have to be mindful of company structures and how they operate and how they think. And particularly on the consumer side, you have to be mindful of regulation. So they'll all move at different paces, but I think in the next two to three years, we'll be looking at a much, much broader use and application of IoT and basic risk management. And that'll benefit, clearly benefit customers and it'll benefit insurers too.
27:19 MG: Good. Well, I hope so because my insurance policy, which was held with a leading insurance company, not called job...
27:26 SR: Brand X.
27:27 MG: But I won't name them, they just gave me a 140% increase because they generally suffered water leakage damage. And when I phoned up to inquire why it'd gone up so much, they told me I was lucky it wasn't 170%. So hopefully, if Chubb came up with a better way of managing...
27:41 SR: I'll leave you my business card.
27:45 MG: Alright, hopefully, I do... Well I'd get my friends and family rate for my insurance. Sean, I know you've got a lot going on. I very much appreciate you taking the time to talk today, thank you very much.
27:56 SR: A pleasure.
28:01 MG: That wraps it up for this episode. You can find out more of what we're up to at www.InsTech.London, including our forthcoming evening events. If you like our podcast, we'd welcome your feedback on the app or wherever you are listening or just email me at matthew@InsTech.london with whatever is on your mind.