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EIS 2021 TRENDS SHOW 59% OF INSURERS ARE UPPING DIGITAL TRANSFORMATION SPEND

  • 2020 was a year that no one forgets, with Covid-19 forcing disruption on every business, industry and person on the planet.
  • The insurance industry has received one of the most significant blows due to the losses associated with pay-outs relating to the pandemic. The Lloyd’s of London insurance market forecasthas estimated that the coronavirus could cost the global insurance industry $203B.
  • As things start to settle in 2021, we expect the industry will continue to change and adapt to the New Normal.

“Despite the chaos, the pandemic has highlighted the sheer importance of digital transformation,” said Anthony Grosso, Global Head of Marketing at EIS. “The leading insurers of the future will be those who transform to enable digital ecosystems which place insurance at the heart of how consumers manage their financial lives. In 2021, we expect insurers will focus on this and invest in their ability to keep up with the needs of their customers.”

Based on the analysis of 1,057 consumers of insurance services in the GWI survey commissioned by EIS and 73 industry respondents in the Insuretech Insight (ITI) survey sponsored by EIS, we expect these three following initiatives will continue to dominate boardroom agendas in 2021:

 

The craving for Digital Transformation: There is a huge sense of urgency in the industry: an overwhelming proportion of insurance professionals believe there is a pressing need to accelerate transformation. Although nearly all (99%) insurance professionals in the ITI survey agree insurers must undergo digital transformation to remain competitive, 88% say legacy systems are preventing them from transforming quickly enough. When asked how investment in digital transformation will change for their companies in 2021, just 1% of respondents said it would decrease while the majority (59%) predicted investments to increase in the new year. Not only will this help insurers internally, but it will increase their appeal to customers and improve the experience they’re able to provide.

 

The road to modernising customer experience: Across all aspects of customer experience, from omnichannel to acquisition and claims, many insurance professionals consider their own industry to be average or poor. For insurers who can simplify the buyer journey and offer more products with flexible coverage options, there is a growing market opportunity. Although most insurers believe that customer experience is vital to the future success of the insurance industry, only 26% in the ITI survey believe they are doing quite well in meeting their customer expectations. In the GWI study, 28% Policyholders cite poor customer experience as the main driver for leaving their insurer. Insurers require a flexible IT infrastructure to adapt to their customers’ changing needs in real-time, especially when 48% of policyholders told GWI they would like insurance bundles where they can adapt coverage on-demand, with a simple on or off toggle.

 

Going Beyond Protection to Personalisation: Many insurers have joined forces with adjacent businesses to provide more holistic propositions and create a sticky lifestyle and lifecycle bundles suited to building richer customer relationships compared with what protection products alone have been able to achieve. In the ITI survey, 86% of insurers feel their ability to offer their customers additional services which go beyond protection as essential to their future commercial success. This sector is finding ways to go beyond what they currently offer as 66% of insurers are actively partnering with non-insurance businesses and 26% have plans to partner with non-insurance organisations. There is certainly consumer appetite for this type of product. In the GWI survey, 58% of consumers were interested in a mobility bundle including auto insurance, auto loans, buying or leasing options, remote monitoring, maintenance and driver safety guidance.

Yaron Ben-Zvi, Haven Life CEO said: “I’ve always felt there was more we could do for policyholders after they buy a policy to build more trust and provide more value. Something that thanks them for placing their faith in us and reminds them they’re more than just a number. That’s why we’ve put an emphasis on a customer-driven program that puts a rider to our term life insurance policy that provides extra benefits, like a digital will and award-winning fitness app.”

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BRICKENDON STRENGTHENS SENIOR LEADERSHIP TEAM, PROPELLING FURTHER GROWTH IN 2021

Transformational consultancy appoints new Director of Financial Services, Strategy & Business Development alongside a series of senior promotions

 

Brickendon, the transformational consultancy is announcing a new senior hire and a set of senior promotions as the business thrives and looks to generate further growth in 2021 through a focus on employee engagement and advocacy.

The business experienced strong growth in the Banking & Government sectors throughout the second half of 2020, due to an innovative focus across its three key areas of specialism: digital, data and automation with particular attention on DevOps and Agile methodologies. This success has been underpinned by its expertise in delivering complex change projects for highly regulated organisations and a continued expansion into international markets.

Among the announcements, Brickendon has appointed Will McDonald as its new Director of Financial Services, Strategy & Business Development. McDonald been tasked with aligning the expertise of Brickendon’s consulting workforce to client needs, fast tracking Brickendon’s growth in international markets and driving customer advocacy. He brings over 20 years of experience in Enterprise technology, working across Asia, Europe and North America and most recently at Telstra Global, where he led the Financial Services Industry segment for EMEA.

 

McDonald comments “I’m very excited to join Brickendon at such a pivotal time. 2020 has accelerated a lot of change, and all businesses must recalibrate to remain competitive and thrive in this challenging recovery period. The enabling forces of Digitisation, Cloud and Automation are unlocking incredible productivity, yet people and expertise are still critical to success.  At Brickendon our people have incredible talent for identifying and solving complex challenges faced by our clients.  Our customers recognize this, and we have built a loyal following amongst them. My role is to amplify the work that the team has achieved over the years and create platforms for a loud chorus of customer advocacy to be heard”

Brickendon’s continued success also marks the promotion of Bala Ethirajalu to Partner, Global Head of Delivery and Maureen McKinley to Senior Manager as both individuals played a critical part in the helping the business thrive.

Bala has been with Brickendon for over eight years and has been instrumental in building a high performing delivery team, whilst defining Brickendon’s technology strategy and setting a culture of employee empowerment.  Brickendon’s clients and team members have embraced the leadership values, innovation and accountability that Bala has championed and driven across the entire business. Bala has also successfully led the team to win the prestigious TESTA awards in 2013 and 2016 as well as securing seven consecutive finalist nominations.

 

Bala comments “If we create an environment of employee engagement and empowerment, everything else falls into place, we do better and more creative work for our clients, as well, we more easily attract, nurture and retain exceptional talent in the organization. I’m delighted to take up my new senior position at Brickendon, and look forward to all the future successes of our team as the business continues to thrive”

Similarly, Maureen McKinley has been part of the Brickendon team since 2013, and her new senior role will support the wider leadership team and grow the Poland based Brickendon practice. Maureen is a trusted advisor and contributor to her clients and has continued to raise the bar both in the work she conducts for them and as a leader within Brickendon.

 

Christopher Burke, CEO, Brickendon, comments “Brickendon was called upon by our financial services clients as they navigated the turbulent start to 2020. As a business leader and founder, I’m proud of our team and how we rallied around our clients as they faced unprecedented challenges. Our new set of senior promotions and hires signify a big step towards the growth trajectory which we’ve planned out for the year ahead and I’m in no doubt that Will, Maureen and Bala will play pivotal roles in driving this forward.”

 

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FUNDS’ RUSH TO THE CLOUD MUST NOT BE A BOX TICKING EXERCISE

By Ed Gouldstone, Global Head of R&D for Asset Management at Linedata

 

The fund management industry has held up remarkably well against the strains of Covid-19 – from a dramatic spike in market volatility to the sudden shift to remote working. However, the quantum leap in digitalisation spurred on by the pandemic has underscored the disparities between fund houses’ journeys to cloud – some are quite far along, while others are quickly having to play catch-up.

However, the need to rapidly advance digitalisation efforts must not result in cloud migration becoming a box ticking exercise. Some managers may be tempted by the convenience of a ‘lift and shift’ approach. That is, simply building their cloud infrastructure as if it was their existing data centre without optimising it for cloud. This is by far the quickest option but, if rushed, it doesn’t necessarily bring the cost-saving and flexibility benefits that managers are looking for. Cloud provides for advanced levels of security that go beyond traditional deployed models, but only when the necessary tools are put in place. Fund managers therefore need to put in the required thinking beforehand, to ensure the optimisation and any necessary re-engineering of tools whilst accelerating shift to the cloud.

 

The risks of rushing cloud adoption

Elasticity is one particular area where cost savings come from in the cloud, because cloud is designed to scale up and down as and when you need it. When migrating infrastructure to the cloud, fund managers must ensure that the all applications are optimised in a way that enables horizontal scalability, as many legacy applications are built around a fixed number of servers. This could impede the potential to quickly scale up operations in rapidly changing markets, inhibiting fund managers’ growth ambitions and ability to compete.

Ed Gouldstone

Another risk of rushing the transition to cloud, is that a lift and shift approach can actually increase costs when computing and storage practises are not rationalised. Migrating existing infrastructure as it is also means migrating all existing inefficiencies along with it, such as zombie servers, duplicated workloads, and outdated records. By not doing the due diligence to ensure excess computing capacity is left behind, companies could seriously diminish the cost savings they would have otherwise enjoyed.

Building resilience into operations is of paramount importance for fund managers who are planning to migrate to the cloud. Although infrastructure is more secure with cloud, the greater accessibility it allows means that points of entry on the client side can be weak spots if not properly protected. This must not become overlooked in a rushed cloud migration. Unlike with private data centres and VPN access where hardware offers protection, extra layers of authentication need to be added to endpoints to ensure the security of the system, while enabling access from any device. This is even more necessary in our highly regulated industry, where fund managers are dealing with large client funds and processing vast quantities of real-time financial data.

 

Realising the opportunities provided by cloud

When handled correctly, a successful migration to cloud offers fund managers a great opportunity to drive digital transformation, scale their businesses and upgrade the technology they rely on. Perhaps the biggest driver for cloud adoption, the pay as you go, on-demand scalability offered by cloud providers, enables rapid growth and reduces costs. Previously, in order to scale up, businesses would have to install new hardware and pay for its maintenance, as well as acquire the physical space that new servers take up. This process is much slower and more expensive than the quickly scalable, pay-as-you-go cloud, but expert guidance is crucial to avoid the aforementioned risk of transferring excess computing power, and ensuring applications are scalable so that potential cost savings are realised.

Another major driver to migrate infrastructure to the cloud is the data analytics capabilities available. The cloud’s ability to support data lakes that can store structured and unstructured data at any scale and operate real-time analytics, provides unique opportunities to create new insights and therefore greater value. The data lakes enable better use of the artificial intelligence and machine learning technologies that are reaching maturity and are increasingly mission critical. This is crucial in a market where margins are getting smaller and traditional investment models are being challenged. Analytics can create value throughout all operations, from the front office through to the back office, whether it is sentiment analysis of client engagement, or reducing operating costs through process automation.

In terms of security, while moving to public cloud does imply some inherent loss of in-house control compared to historic ‘installed’ technology models, the bottom line is that cloud providers offer robust levels of security unmatched by in-house technology installations. But it is still critical that firms have the requisite knowledge about cloud deployment and cybersecurity, or partner with a technology service provider that does, who can protect endpoints with new identity and access measures such as two-factor authentication.

The need to migrate to cloud infrastructure has become more pressing at a time when fund managers are increasingly introducing flexible working for the long-term. While implementing a cloud first business strategy is now considered crucial for longevity, it must not be rushed at the risk of costly mistakes and the perpetuation of outdated operating models that limit adaptability. A rapid, productive cloud migration is still possible, but firms need to ensure they have well-considered plans and strong partnerships with experts in place to ensure success.

 

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