CEOs: Embrace tech, for your legacy

Technology has become a core competence of all insurance businesses. It is critical to every function, and very often a source of competitive advantage. Insurance carriers and brokers have evolved in response: the Head of IT, once hidden away, has ascended to the C-Suite as Chief Information Officer. Colleagues there no longer declare: “I am not technical” when confronted with IT issues. They now want to use blockchain, machine learning, and AI – but perhaps only because they think they ought to.

That’s still a great advance, but more must be done. IT’s new place at the core of insurance creates the need to understand and accept that tech tools must permeate every business. The technology knowledge gap is narrowing, but it remains, and sometimes dominates.

Sending the same people to multiple insurTech events just won’t do, since everyone needs a vision of the sector’s direction. Some businesses leave technology to one or two individuals in each team or department, but all staff need access to IT knowledge and training. It doesn’t take a huge investment.

Change at the top is most important of all. Unless CEOs and COOs understand what tech tools do (if not how they do it), their firms are unlikely to adopt them successfully, or to best advantage. With his or her knowledge gap yawning, an insurance-company CEO cannot make informed strategic decisions, since they can’t see all the options, and must rely on the advice of others.

A shallow knowledge can be even more dangerous than ignorance. They need to do much more than issue directives declaring the need for AI, blockchain, insurTech, or some other trendy tech. The landscape is littered with failed initiatives and wasted millions.

Chief executives are best-placed to initiate change based on understanding. They must create and foster corporate eco-systems where tech-fuelled change is possible, encouraged, and embraced – and they need to lead by example. Marrying their extensive industry expertise to the newest technologies will create, as their legacy, a firm fit and ready for the future.

Similarly, businesses need to bring all the people in the middle, the over-45s with ten or 20 years to go, into the technology-knowledge frame. Every business has a vision. IT delivers tools that help companies achieve their visions, but success is rare when the most experienced in the firm are followers, rather than the leaders of technological change. The millennials can’t do it all!

This month’s presentation of new strategies in The Future of Lloyd’s is a promising step which hopefully marks the beginning of the successful end of this journey. It is probably no coincidence that the successful development of practical IT solutions for Lloyd’s began to approach its event horizon only with the arrival of new C-Suite denizens who understand technology, have implemented it successfully in multiple businesses, and thoroughly apprehend the processes and challenges of insuring in wholesale markets. Their arrival has created real, positive impetus.

No firm, nor the industry as a whole, can afford to wait. Everyone should get involved in the insurance technology revolution, whether they’re a market business or an IT vendor. Incumbent, capable executives are best-suited to lead the change, since they have seen both sides of the tech divide. As their legacy, CEOs across the market should gain a comprehensive understanding of IT and what it can do, then use that knowledge to implement an IT-enabled future for their company that will allow them to retire from a firm they have left strong and ready for the technology-fuelled future.

By Parminder Kaur