With the Insurance Times Innovation and Disruption conference taking place on Monday, one of the key speakers on the day, AXA UK and Ireland general insurance chief executive Amanda Blanc, spoke to Martin Kornacki about insurance innovation.
What do you make of the burgeoning insurtech start-up movement?
I do rate what’s going on, but everybody is on the same bandwagon. It’s like a race to find the next big thing. I’ve worked with and mentored on the Barclays fintech accelerator and opened that up to my team so we can quickly identify an idea as something that might work here. I think we are connected and we do have an open mind.
Many of the ideas we are building into our retail business and our direct business come out of start-up accelerators like this. The issue is that innovation is not just about brand-new ideas.
I’ve always said execution is better than strategy. If you find that somebody has a great idea or way of doing things then quite often you can copy that, and replicate that, and build on that. There are ways of doing that.
You don’t always have to have the brand-new idea yourself, innovation can actually be a better way of doing something that already exists.
Do you think insurance could be disrupted by an Amazon or a Google before it has time to transform itself?
When you look at things like Amazon it has a massively successful business model, but that is because you order something, you get it the next day and you either like it, or if you don’t you send it back. It’s very tangible.
With insurance it’s not like that. It’s a product people buy hoping they will never use it. When it is used it’s the moment of truth, and it becomes very subjective and based on many factors that create opportunities for things to go right as well as wrong.
Am I worried about an Amazon or a Google doing it? Of course – they have a lot of customer data and a lot of opportunity, but I am more worried about somebody we don’t even know about coming in and doing things better.
What slows innovation within insurance?
There are blockages within organisations and it’s a chief executive’s job to remove those, but there are also regulatory blockages. Insurance is a legal contract so there are legal blockages. It’s a paradox: make it simple, but make it compliant.
Make the customer service good, but also go through a regulatory script. People don’t want to spend hours buying insurance, but they want to be protected. Then, when the claim happens, they do want you to spend time with them.
There are a million different things you could use as excuses not to change, but at the end of the day you have to make insurance easier, more straightforward and simple. It can be done, but I think you need to be aware that there are some things that appear contradictory and deal with them.
Do insurers focus too strongly on the broker as the customer?
The first thing we have to understand is the end customer is the customer, not the broker. Too often we have spoken about the broker as the customer; the broker is the intermediary and plays a vital role with the insurer and the customer, but the broker is not the customer.
We need to understand, with the customer at the heart, what value the broker and the insurer are adding. And we need to create transparency through that whole process. That’s why all these things: trust, transparency, innovation and disruption are all linked, because there is too much vagueness and opaqueness about the different roles and who is doing what, and how they are getting paid for that. So the question is, how do we create that transparency?
We too often hear that we do certain things because that’s the way they’ve always been done and because customers understand it. Well, I don’t think customers understand it. We need to be transparent to give customers ammunition to make an informed choice.
You’ve said in the past that AXA needs to become more like its customers. How is that progressing?
That’s really important to me. I’m sure if you talk to any chief executive they would say that the issue is being dealt with, but I don’t think it is, because you only need to go to any of event in insurance to see that everyone is predominantly male, middle-aged and from the same sort of background, and our customers are not like that. It’s isn’t going to be solved overnight. You can’t just change a complete workforce like that. And here I’m not just talking about bringing people in at the younger end, it’s also about bringing people in at the older end, because a lot of our customers are mature and we need people who can understand that and what those customers want. It’s not about age actually, it’s about behaviour and culture, and we need to do a lot more.
How do you foster innovation at AXA?
To foster innovation you have to create the right environment from a leadership perspective. I’m not saying we’re perfect on this because we are not there yet, but we run a large number of innovation programmes. Last year we ran a programme that gave anybody the opportunity to submit their ideas.
We then assessed those ideas, chose the top three and let the guys develop them in a lab environment. We’ve also worked with external parties to ask how can we make this part of our everyday culture and there’s a programme going on in one of our businesses in Glasgow where we are constantly encouraging and recognising innovative ideas.
You then test and learn, try things and move on quickly if it doesn’t work. As a business we take this really seriously, and it is slowly permeating into our DNA, but it doesn’t happen overnight.
Amanda Blanc will be speaking in London at the Insurance Times Innovation & Disruption conference on April 25th 2016 click below to learn more