Innovation can be hard, but it's not impossible. Three of the leaders from insurance broking came together for the Novidea webinar on 28 November to talk to Matthew Grant about the practical steps they are taking to drive change using data, analytics, technology - whilst bringing their colleagues with them.
Lyn Grobler of Hyperion talks about how her experience of working in the Oil and Gas industries has helped her ensure that Hyperion can take advantage of its extensive data. Ben Rose from Aon explains how he is working with people across the world to create a unified way to bring new ideas to emerging opportunities. Howard Lickens, founder of Clear explains how important culture is when successfully acquiring new companies and why he chose to invest in start up Konselio rather than build something internally. And not surprisingly, for everyone, the client is at the heart of what they do.
In 30 minutes we covered many of the themes from the white paper on this topic written by Matthew Grant and Roi Agababa CEO of Novidea, earlier this year.
Transcript for this podcast
00:04 Matthew Grant: Hello it's Matthew Grant, partner at InsTech London and welcome to our 15th podcast. InsTech London, if you haven't already come across us, is one of the largest networks around the world bringing together insurers, startups, early stage companies and everybody interested in innovation data and analytics in the insurance world. We hope you enjoy this podcast. If you'd like to learn more about us and come along to one of our monthly events please take a look at our website www.instech.london. We're delighted to bring you this time a recording from a webinar we ran recently talking to three of the leading people at three leading insurance brokers. Talking about how they're using data and analytics, and what we had is a very practical discussion about how people in all sizes of organisations ranging from Aon to Hyperion or to Clear could actually make some really practical differences around innovation and the use of data analytics. So our thanks to Novidea for sponsoring this and also for being one of our supporters at InsTech London. And with that, here is the webinar.
01:20 MG: Welcome everybody to our Novidea sponsored event on insurance brokers, and how they are using technology, data and analytics successfully in their growing businesses. As all of you are aware, insurance brokers like everybody in insurance today is looking at how you or they can best use data analytics in their business. InsurTech has got a lot of coverage in the last few years, and we're starting to hear about artificial intelligence, big data blockchain and we're all encouraged to be innovative. But with all this activity going on, it can be hard to know where to start.
01:55 MG: So today, I'm delighted to be joined by three leading figures from insurance broking who all in their own, and in somewhat different ways, have been using data analytics in their own organisations to achieve some growth. Lyn Grobler is the CIO of Hyperion, one of the fastest growing insurance brokers. Ben Rose is a lead consultant at Aon, one of the largest insurance brokers in the world. And Howard Lickens is the founder of Clear Insurance. So I'd like to just ask a question to Lyn first of all. Lyn, you've joined the insurance world from outside of the industry, you've got an organisation that has grown fast through the last few years, but I'd be interested if you could just say a few words about the company, and then also, what are your impressions as an outsider coming into the insurance industry?
02:43 Lyn Grobler: Thank you very much and thanks for having me join today. Yes, so, I joined Hyperion Insurance nearly three years ago now. Although in Hyperion years I think that's probably like 30 years ago actually. We're a very fast-moving company, fast growing should I say, and fast moving for that matter. Highly successful broking company, and we operate right across the chain of distribution from retail to specialty, wholesale and underwriting, and we're in 78 countries around the world. We have made lots of acquisitions over time. Our CEO David Howden started the company in the early 1990s. It was just him and two other people, and we've grown now to be about 4500 people. And we've grown through organic and inorganic growth through acquisitions.
03:37 LG: So later on when we start talking about data, you can imagine some of the challenges that we have with these disparate groups of data around our company. How does that differ for me having come from a very large corporation in oil and gas, I was with BP for many years, it is very different. That was a big corporate. Our challenges there were probably more political rather than the fact that the data was not rich. So the oil and gas data is rich, it's many years old, you've got lots of data to deal with. But any company that I've worked closely with, I'm also on the board of a bank, we all struggle with the quality of data. And our ability to get our arms around that data to call it the same thing so that we can slice and dice it and get some clear answers. So, I think that's a similarity, certainly, that I am finding here at Hyperion.
04:35 MG: Great and I imagine you're bringing some very clear thinking to Hyperion in terms of similar lessons from the oil and gas industry. So Ben, just turning to you. You joined Lloyd's five years ago, you're now with Aon, very large organisation. How do you ensure that your influence actually has a meaningful impact on what Aon is doing around the world?
04:55 Ben Rose: I think it's an interesting thing to mention, actually my Lloyd's background, because I came initially into the insurance market seeing the real centre of this debate around how the industry should change, particularly around the traditional insurance transaction, but then actually moving to Aon more recently has opened up much more than just an insurance broker, you're actually looking at a leading global professional services firm dealing with the risk side, but also, retirement, health, etcetera, and a huge number of shared solutions and services that go with that. Being a part of that Aon piece is obviously challenging for any individual. I'm in London which is luckily the heart of a lot of the activity, and the main challenges that I'm facing are around, firstly, how do we help our clients? So, Aon's insurance clients who are dealing with huge range of emerging risks, challenges around how they grow and also, once they do grow, now how do they cover those new angles that they are pursuing. Secondly, the other big angle I look at is how we help insurers to enable those clients and to support those clients in the best way possible.
06:00 BR: And thirdly, I try and work out how we can use technology, data, and analytics to support Aon itself. Most of my work, being part of an entity within Aon called Aon Inpoint, is around effectively leveraging data, analytics, consulting, and engagement to support insurance carriers so that they can do a better job for our clients who are facing this changing set of risks. I can talk a bit more about some examples as we go on I'm sure.
06:25 MG: Great, so yeah, no shortage of things to do and I think it would be interesting to dig into some examples. Howard, in some ways you are probably here representing many brokers that are not as big as Aon or is as fast growing as Hyperion, but you yourself have been very successful. You sit on the [06:41] ____ Innovation Group, you've made some acquisitions around technology. So how do you see the world as someone who's seen the old world of broking and the future now with data and technology becoming more available?
06:57 Howard Lickens: Yes, and then I'd love to say, I've been broking for probably 40 years. I'd love to say how the amazing revolution I've witnessed, but all I've really seen is emails introduced into what was a pretty inefficient system. So to me, technology is fundamental, but it's nowhere near there as yet. So I'm afraid I'm massively outdone by my two colleagues here, when running much bigger businesses; mine is a much more meat and potatoes problem. I have lots of clients who needs some service and the chaotic way that particularly commercial brokers have been managing their data, is just... It's been allowed to carry on, but it shouldn't be.
07:37 MG: So I think Howard is tying up something, Lyn, you said about. You put it quite politely when you said you come from your previous role and that you find it quite interesting moving into the broking world. But I think that somewhat that can be a euphemism for a chaotic in Howard's word. So perhaps, could you just talk a little bit about that issue around data quality that you're seeing and if anything is an interesting aspect of that in the sense that, how do you balance dealing with the data you've got in the organisation that they're trying to collect versus the ability to innovate and do some new and different things? And how do you spend your time or focus between improving the internal information and accessing new information?
08:20 LG: It's a really good point. So yes, you walk around Lloyd's of London and you do still see people with folders under their arm, and inside of those folders is sometimes the only place where certain data is stored. And another problem we have is the fact that in broking it's such a relationship-driven industry that... And especially in specialty broking where our brokers will have... They really have a good grip on their own portfolio and they'll know their own data really well because it's not a lot of data. And therefore, there's not much in it for them to put it into a system, unless they have to. There's not much in it for them to be fed back from the IT department that same data which frankly they already know inside out. So for us in Hyperion, part of what we're doing is saying, "Okay, so at the top of the house at the ExCo level, at the board level, our investors, they want to slice and dice our data from the whole company. But actually that doesn't interest everyone. So as we starting to put our new data analytics and our new data systems in place, we are looking at ourselves and saying, okay, so what is it that we can give our business, our brokers, our clients, more importantly, that will be useful to them. And in return therefore we'll get their data and we'll then be able to standardise that data and aggregate that data in the way we need to.
09:45 LG: So, I think, Howard, you said it, or, Ben, you said it. At the end of the day, it is about the client. So what can we do for the client? How does that then help the broker? How does that then help the business? And how does that then help our investors and our shareholders as well?
10:01 MG: Yeah, no, I definitely wanna come back to that, to the client piece. But just first of all, Lyn, I think this is a really interesting point around the incentives and how do you create the incentives internally. And yeah, I think also just sort of interpreting what you said around it has to start at the top of the company. Can you give us a practical example about what you've done to encourage people to share data even if it isn't immediately obvious why there's a benefit of doing that.
10:26 LG: You know what, it comes back to the basics. It comes back to sitting down with people, talking through why you're having the conversation, explaining that vantage to the company of getting the data right. And then what we've also done in some cases is we've got the team to put some ideas together around data and analytics, or put some ideas together around, "Did you know that across your portfolio we've got this insight or that insight?" And then, that kind of draws people in. So that model works quite well. What also works very well for us in our company is if you get one leader interested in something and get him or her then to sell it to his or her peers, that's way better than the technology department trying to sell something. So that's another method that's worked well for us, where we have implemented something for one team and they've then gone and spoken to another team and got that to work.
11:27 LG: What I am really keen to build on even further is some of the younger people who've come into our organisation have really good ideas and are far less risk adverse, far more interested in trying something else and arguing if it doesn't work it doesn't work. So grabbing onto those guys where we can. We've even managed to persuade our business to have one of their individuals moved into the technology team to work more closely with us to come up with new ideas, to play around with innovation. And then, as I said, take that back into the businesses and see if we can get them interested. We haven't had to get to carrot and sticks just yet. I'm hoping we could keep it to carrots and that that's the way we'll keep moving forward.
12:11 MG: No, yeah, that's great. That bringing together of both the senior level and then giving opportunity to people who have more recently joined, it seems to make a lot of sense. Howard, when we were talking earlier you had a similar theme with your own... I think your organisation, and also the companies you've acquired around. You've gotta bring them with you in terms of bringing them into the company culture and presumably data is part of that. Could you just talk a bit about that.
12:32 HL: Yeah, the one thing you can't do when you are an acquirer of businesses is suddenly wave a magic wand and change people to the way you want them to get to be. So you have to work with the grain. But as a result, we inherit lots of old school ways of doing things. It'd be nice if you had one system in a business like ours but sometimes it feels like they got about 50 or 60. And I think there's a balance between evolution and revolution. We can... As Lyn was saying, we can take parts of the business and slice them off and e-trade them. And we'll find parts of our business who are very pleased with that and then look to widen that out. But that's only ever going to grab a small part of the business. And I think if you can use that as a puppy dog sale maybe to actually set up the revolution. And as you know, we're trying to experiment with a completely different way of dealing within the customers as well. But I don't think we can suddenly throw at people, "Here's something new. You'll love it." Because they won't.
13:37 MG: Your comment earlier which I think was slightly flippant but also I think has a lot of truth around it. The biggest technological revolution in insurance broking has been email in the last 40 years. That's a sad indictment of the insurance world if that's as good as it got. So I'd like to come back on that, just that last comment in a minute about some of the things you're doing and the balance of doing things within the organisation versus externally. But yeah, not to forget the main reason why brokers exist is to service the client and to, of course, to make some money. Ben, you sort of mentioned that in passing but what are examples where you've seen your being able to help your clients with some of their ideas and be more effective through your own connections and data access?
14:18 BR: So very much for us this is where you have a client problem that you need to solve. And often in order to solve that problem you're going to need some insurers to support that risk that they're trying to tackle. And in some cases, Aon already has the data that's required to present the fair understanding of the risk the client's facing, but also to put forward a case to the insurer they'll be able to actually knowingly support that risk in a safe way that they're comfortable with. What Aon has tended to do here is actually to go out for large problems facing our clients or large risks and opportunities, and to actually go and get that data, if it doesn't already exist. So IP is a really good example of this. If you look at the intellectual property world at the moment, we're talking about large companies that have intangible assets.
15:05 BR: I think I saw a statistic recently that something like 85% of the S&P 500's assets are now intangible. It's something like 20 trillion of assets floating around there. How do you as a broker like Aon, if you want to be a partner to these companies, begin to tackle that risk? So actually we found the guys who are the best. We found a company called 601 West in the US, who are an IP specialist in patents, etcetera. We've now brought them under the Aon Company Group in order to form an International Property Solutions team that can help build solutions specifically for this type of company. And that's just one example, but in general, it's a principle I think that Paul Mang once set out called open architecture innovation. We're gonna have to partner with new data sources, often startups, but also often large companies that can provide us with new ways of looking at risks that we haven't looked at them before, in order to build solutions that actually help a client handle a risk.
16:04 MG: So is it... Picking up on that, my earlier question to you about how do you make an influence. It sounds like for you... The strategy of Aon is to solve big problems for clients or big emerging problems, which makes sense because that's a new green field area. If you can bring together or you can... External forces plus internal data and find clients then you can actually create some real visibility and success. And I think to go back to Lyn's point about, so people earlier in their careers and how do you motivate them. An organisation that can actually give people the ability to do that can actually keep people in the organisation and this whole challenge about how do you innovate internally versus externally. So Howard, can I come to you in a minute on the innovation one, but Lyn, just in terms of... Just coming back to this whole issue about the data and organisation and... What do you do when it comes to tools and processes that you find help make you more efficient when you're... You've incentivized people to collect the data, you wanna give them access to the reports, how do you actually make that practical for people in their day-to-day jobs?
17:07 LG: Yes, I mean, our culture is very much not top-down. We do not tell people what to do. When we acquire companies, it's all about supporting them to remain independent and we really value that. It's at the heart of what we do. So we would not have a situation where as a CRA I'd be saying, "You should all use a certain system," or, "You should all do anything a specific way." But having said that, the extent to which we can standardise our data, which is what we really want, the better. And so, again, through our network of peers talking to peers and learning from peers, one of the things that's definitely working for us is where we can get people to use the same system.
18:01 LG: So we... Our Israel Howden office has worked with Novidea to actually build out a broking system that's fit for purpose for what they do. And then together with the technology team we've now starting to spread that across to other parts of our company, who of course operate in a similar way, remaining independent, but being able to build on the good work that's been done elsewhere. Now that's great for me, because the more of our teams internationally who use the same system, the more we can very easily force, without anyone feeling the force, some sort of standardization. Because you've got to standardise that data. You've got to at least all decide what we mean premium to mean. And we've got at least all name our customer's clients by the same name. I know it's real basics, but it's really getting that data integrity. And mostly, we've implemented a data warehouse and we are probably about 80% of the way through feeding that data warehouse with the data that we have today. But now, we still got a massive cleanup to do before we can really, really get on to the fancier data analytics that would sit on top of that.
19:14 MG: It sounds like your role is you help people, guide them towards the tools that are out there, but you don't suppress them if they've got some good ideas. And you let the great ideas flourish. And I think also, when we were talking before, you mentioned your legacy is not as just about legacy systems, it's legacy culture and it's legacy data and...
19:33 LG: Absolutely. Absolutely. So it's legacy people. That might sound a bit harsh, but people who are successful, and we've got a lot of successful people in our business who've done things a certain way and see absolutely no reason to change it. And it's how you can influence and encourage them to change. Legacy systems where there's absolutely no... There's no business case to change them, they're working. So to come in and say, "Move on to a new shiny system." What's the return on that investment? So in some cases what we're doing is shrinking that record system of record back office system and looking at some new shiny front-end applications that are a lot easier to use, especially where they are B2B, or even B2C.
20:17 MG: I see Howard, you've recently got involved, over a couple of years, have got involved with a new startup. You possibly could've done that internally and then set up some innovation for it, but you decided to go externally and make an investment. Could you just talk about your thinking behind that and how that's getting on?
20:30 HL: Sure. And I think you massively overestimate my abilities to run such a scheme. Yes, I have known for years that the... And I'm working at a much more mundane level than my two colleagues here. But we have known that the back office systems that we all have to work with are varying forms of legacy going back 20, 30, 40 years. Yeah, John Wolverton, who I know quite well, when he came to speak to me and said he's got an idea. Fortunately, his idea chimed with mine, and he could bring to it an ability to run a project and an ability to run a software project. But he didn't really have a clue how an insurance broker would work. It's an ideal partnership. We can bring broking knowledge, he can bring technology and the vision. We've been working on it for 18 months or so. It's never finished, it's never going to be finished, but I'm not aware of anything else that I could buy off the shelf. And there may be others being developed, but certainly the traditional software is just not based around the customer, and it's not based around data. There's not one version of the truth, as Lyn is saying. Her brokers will be doing things the way they've done them for years. They'll have data sitting in pockets all over the place and never being reconciled. And there must be a huge amount of efficiency gains but there must also be some extra insight that can be gained from all this data we've got locked away in a library somewhere.
22:05 MG: Your advice for anybody else out there who is looking at partnerships, obviously is a question. Is that something that you can do? If you find the right partner, you can be sort of hands-off. You let them do the development. You check in now and again, you give them access to your data? Or is it for most organisations that can be quite an all-consuming activity, they're gonna partner with somebody else?
22:26 HL: Oh look, it's all-consuming. I'm just fortunate to have people who actually do the donkey work, so I can say this would be a jolly good idea and thankfully somebody else is doing it. No, there's a lot of hard graft in turning what I've described earlier as chaotic systems that we have at the moment, turning those into instructions and the work of turning that into something a software developer can understand. That involves the broker, it involves the software developers and the business analysts in the middle. Now, there's a hell of a lot of work to sandwich those two together, just that I don't do it.
23:00 MG: Now Ben, one of the things you've done, and I think this has been successful more recently the last few years, but you've managed to create a much more integrated approach globally in terms of the information you're finding and feeding back and building. Can you just talk a little bit about how that's working, and how does Aon bring together people from different regions, different ideas into something that's coherent. And a bit of Lyn's point about why would they bother doing it if it doesn't immediately benefit them.
23:26 BR: Absolutely, I think that is the key point. There's gotta be a benefit perceived in collecting all of this data and arranging it very nicely. And I think we were lucky that leadership had foresight quite a long time ago that there would be a big advantage to collecting all of our data in consistent ways around the world, and bringing it together has enabled us to really support all three of the areas that I mentioned at the beginning of this call. When you've got a really good data set, across insurance, across re-insurance, you can go to clients and you can help them understand what risks clients like those clients are facing. Then you can help them understand what coverages they should be buying and what they should be expecting.
24:07 BR: You can also use that data to help benchmark insurers and help them understand which insurers have the best claim service, which insurers are the best rated. If all this data is at the touch of your fingers, then as a broker, you're transformed. But similarly, it means that your role as a broker towards insurers becomes much more valuable. At Aon Inpoint, my team, we spend a lot of time basically delivering very valuable insights from data. We take all of the trading data and then collate it with other external sources of data. We acquired a company called Finaccord recently that have amazing market data and views on that. And if you present that view of the world, and the ability to cut and segment the global insurance market into many, many pieces, then the ability to match client need with insurer appetite is extremely enhanced by that process. Again, it's something we do very successfully on the re-insurance side. I think for us now, having got our ducks in a row so-to-speak with the data, the next step is how do we start doing more and more beyond the descriptive? We think of data analytics at the moment quite often in terms of, "Can we show what's going on?" Which really for the insurance industry is a big step, but actually outside of the insurance industry was something we should've been doing for a long time.
25:17 BR: And what we are working on now, particularly in our centers for innovation and analytics, Aon Inpoint also is looking at how we can move descriptive up to predictive, prescriptive, and other forms of analytics such as trying to identify when risk events are going happen before they do, how do you interact with predictive maintenance for clients and that type of data, how do you work out whether accounts are more likely to return than others than in different regions. There's so many types of analyses that you can do that would not be possible without getting the data organised first. So, good incentives, I would say, for anyone else thinking of of investing in data.
25:53 MG: Great, and the fact you can do that as a very large organisation means that that, as a concept, they've got to actually figure out how to do practically. But this is idea of getting consistent data and encouraging people to share it, an organisation of any size can do that, and that sort of innovation with small I as to opposed to big capital I. Just as we get towards the end of the discussions, Lyn, without giving away any state secrets, I'd be interested in two related questions from you. One is, what do you see as one of the most interesting areas of development in the area of risk for your clients, is this is solving the risk problem? And then secondly, what advice would you have for other people out there who are trying to figure out how do they get the most impact out of technology and innovation?
26:40 LG: Yeah, I'll try and answer both those questions in a couple of sentences joined up, because I think it falls in one answer for us. Innovation, you need technologists, you need people in the business, how do you work together? And so many organisations have tried in so many different ways. You spin off a different team, you create an innovation team, you try and do it on the side of your desk. And we try to approach it a slightly different way, which is taking the learnings of what some of us have experienced elsewhere. And we've recently launched what we call our fourth leg of our business, which is called Hyperion X. And we've taken one of our best CEOs, Barnaby Rugge-Price, to lead it. Barnaby's a really strong leader, he's highly respected across the business. He understands insurance inside and out. He's up for innovation, he's got some brilliant ideas. And that together with a really strong technology team to help develop ideas really quickly, to work in a highly agile way, we're busy working our way through setting up DevOps. We're training or coaching business owners to become product owners. It's nothing new, it's nothing new to the industry, but for me it's that combination of real experts in insurance who are willing to try something new working very closely with a strong technology team. That's the secret sauce for me.
28:08 MG: Bringing best practices from elsewhere and bringing them into the insurance space. Howard, your advice to others and one area of risk you think we're gonna hear more about or more opportunities looking forward?
28:21 HL: I think the main thing I would say is that innovation can be quite intimidating if you look at the really brand new FinTech and all the new terms that none of us really understand if we're insurance brokers. But actually small, modest innovations which will make you more efficient, which will have a huge difference to your customers, and a huge difference to your bottomline. They can be very simple, they can be very small. Just a little bit of e-trading and a scheme can make you massively more efficient and give the clients what they want. I think it's a danger to think FinTech is all about brand new startups, one of whom I'm a partner with. But I think it's equal if not more important for day-to-day businesses just to think, "What can I improve? What can I improve by 1%, 5%?" And that, I think, is really vital. Yeah, as for my big bet is that we can actually come up with a system which does use artificial intelligence, does reduce... To enable me to give better value-added advice. Not to... I think e-trading, or what have you, is very much considered a way of getting things cheaper, getting things quicker. I'm less interested in that, I'm more interested in getting better advice, giving people a better way of being able to do what they want and for my people to be adding the value.
29:38 MG: And Ben, same question for you.
29:41 BR: For me, it all stems back to the client problem, again. Understanding your clients' needs, they're the ones leading the change here. It's really a race to keep up with their changing demands as they face things like reputation and brand risk, cyber risk. Failure to innovate I think was another thing that came up in our global risk management survey. We've really got to be there as their partner, helping them have the solutions they need. And as part of that, you've gotta have a certain baseline of technical capability, whether that's e-trading or whether that's new sources of data. That really is a full service broker today, is it's somebody who can bring you all of those things together in one and then bring the partners along with them in terms of actually providing the insurance capacity.
30:22 MG: Great. Well, I'm glad you ended up with a client 'cause ultimately that's, as I said, that's what we're all here. I think it's been very helpful to get all your views and thank you very much Lyn, Howard, and Ben for being so open and sharing some of your ideas, and making it in many ways not simple, at least some practical with some very, I think, good takeaways for people. We're gonna wrap it up here. As I mentioned, we will be sending this out as a podcast. I'm sure if you wanna reach out directly to any of the panelists, you can track them down through LinkedIn. So with that I'll say thank you very much and good evening or good morning, depending on where you are in the world. Thank you.
31:04 MG: I hope you enjoyed listening to that as much as we enjoyed the discussion. If you would like to hear more about Novidea, and in particular see a video when Lyn Grobler talks about their use of Novidea, you can find that on the Novidea website.