Image by Arafat Uddin (Creative Commons)
The financial services industry is undergoing digital disruption and change. Insurance, as part of that industry, also faces new opportunities and challenges.
To explore these issues, I spoke with the CIO for Information at Swiss reinsurance giant, Swiss Re. Rainer Baumann handles the data and tools that experts inside the company use to understand and evaluate a broad range of insurance risks.
Unlike traditional insurance, where the company sells policies to individual buyers, reinsurance offers a backstop to other insurance companies. For this reason, the reinsurance business is all about experts gathering and analyzing information on a wide variety of topics.
Baumann is creating a digital workplace to bring these experts information on topics ranging from weather to cyber risk to farming in Africa. Because these experts form the core of Swiss Re, issues such as future of work and adopting new processes and technologies are crucially important to the company.
The edited transcript below summarizes our conversation, which is part of the CXOTALK series.
What is reinsurance?
We support the large and small insurance companies. We give them an understanding of different risks: how they calculate it and how they work with it.
When you have very complex facilities, we do “risk engineering.” You go out to these facilities, [and] try to find out: what can go wrong; what the impact might be. And this needs tons of experts.
At Swiss Re, you’ll only find a few guys focusing on bringing insurance, or reinsurance, to our customers, but many experts from many, many different areas. Tons of engineers, physicists, [and] mathematicians who build the brightest models about earthquakes, weather, [and] people aging [for example].
How do you bring data to these experts?
We are not only experts in working with data but also leveraging the latest technologies.When it gets to mathematical models, for example, or how you calculate weather conditions, then we have our engineer-physicists.
Let me give you a little example. When you get a claim after something happens, then classically, you will have somebody typing this from an email into a system. From that system, someone reviews it and puts more information into another system. However, everything you get, you could extract automatically, and digitize significant part of the processes. But, you need to leverage capabilities that are slowly emerging in the field.
And it is the same as [for] understanding different risks. But, the majority of that information is unstructured ─ is unrelated, meaning it comes from very different sources. You need to put it into context; understand it. And no, we do not employ hundreds and thousands of people. You need to do this in an intelligent way. And, and that’s where our focus is.
How do you get your workforce to adopt these new technologies and ways of working?
This is a huge challenge because it’s not just about analyzing data. We have experts whom we have had with us for years.
They face an industry that is suddenly changing with more products ─ for example, new cyber defense products. Then, they get a work environment that changes.
Ten years ago, they never used iPads to go to customers, write in notes, chat and interact in high frequency with their customer [when] developing a contract. Then, you suddenly have new models of transparency, and understanding of how risks are developing and where it’s going. And then you have all these new possibilities with data.
We struggled with [on-boarding] our workforce. The solution and path we are taking now provides different options and lets them choose, to some extent. [We] tried to impose a certain way of working but failed miserably.
Our mantra is, “Own the way you work.” So, people can work at home, while traveling, and with that, have a much more attractive work environment for them.
What about business model change?
Connectedness of the world changes the whole thing. We need to understand that the risk is much broader, much more interconnected. And, this also causes us to think, “Can we offer insurance, for example, that is more tailored, more short-term? Could we partner more with our primary insurers, and the bigger customers, and also individual customers so that they can prevent risk?”
Digitization shortens the distance from a reinsurance to the ultimate customer significantly. Suddenly, we have a chance to get in touch with them, get real signals from them, and shape their behavior ─ influence them. Because risk management [and] risk reductions are a lot about influencing and assuring that things do not happen that we don’t want to happen.
What is the impact on innovation?
Innovation is one of our core paths. Innovation, for us, doesn’t come from tough, stringent, managed research projects. Innovation comes from the entire company.
We aim at creating a lot of freedom, and we invite people to think about different opportunities. So, collaboration, open problem-sharing discussions are at the core. You could even say that certain kinds of edgier working environments, which some tech companies have are not new to us since we try to foster those kinds of exchanges. And, when we then look at individual activities and how they worked, and very often during a lunch talk, or during a discussion with a primary insurer, we come to the idea of, “Oh, we could, or should; and try out something.” And, with our expertise, we are typically able to grow these things.
Please see the list of upcoming CXOTALK episodes. Thank you to my colleague, Lisbeth Shaw, for assistance with this post.
I am grateful to harmon.ie , which provides tools for the future of work, for presenting this episode.
