Democratising Digital Transformation

‘Disruption’ is a buzzword that I do not think is applicable within insurance. ‘Legacy’ should no longer be the reason to limit change. Less talk of disruption and more focus on “improvement” is the way forward. The narrative has changed and now it’s time to get down to business.

5th May 2020

By Peter Goodman
Co-founder & CEO at Aventus

‘Disruption’ is a buzzword that I do not think is applicable within insurance. ‘Legacy’ should no longer be the reason to limit change. Less talk of disruption and more focus on “improvement” is the way forward. The narrative has changed and now it’s time to get down to business.

The buzz term ‘disruption’ first slid into our collective consciousness back in the 1990s when Harvard Professor Clayton Christensen defined the concept of ‘disruptive innovation’, describing it as ‘the unseating of a dominant product or service provider by a smaller rival, able to achieve the same results at less cost.’ But perhaps controversially I feel it’s time to retire this overused buzzword in the insurance industry.

Why? Because the biggest driving force behind change today is the democratisation of innovation. New technologies are giving smaller companies – MGAs, brokers and niche insurers – greater access to new opportunities. These new ways of working, and most importantly advanced abilities give them the ability to compete on a level playing field with bigger players.

It’s time to change the narrative.

Democratising Digital Transformation

Digital transformation means different things to different insurance businesses. It’s not purely about saving money, driving efficiencies by replacing outdated back-office technology, or improving the customer journey with a sleek front-end. It’s about incorporating the use of data and delivering a single version of the truth, accessible to MGAs and brokers of all shapes and sizes, that flows fluidly and allows them to jump on emerging trends and seize opportunities to enhance customer value.

In my experience, the biggest problem in the SME insurance market is that businesses know what they want to achieve, but that the technology market is often geared towards the big players with big budgets for innovation. I experienced this myself with the launch of Homelyfe.

Frustrated with the analogue nature of insurance purchasing, I set about developing a new proposition which would deliver the right insurance at the right price with minimal questioning, no fuss and no paperwork. But when it came to finding the right platform there was literally nothing available in the market, at a price we could afford, offering the flexibility we needed to do what we wanted to do. Our only option was to build it ourselves, and so we did.

We launched the Aventus Insurance Operating System to democratise digital, allowing smaller players to access the tools, innovative tactics and agile development required to drive impactful transformation at a relatively low cost and in a short time frame.

It no longer needs to be the case that when a major ‘disruption’ occurs in a given industry, the only survivors are those with deep enough pockets to invest in massive transformative organisational overhauls.

Strip back the grandeur of digital transformation

For small MGAs and brokers with limited time and resources, it’s about stripping back the grandeur, building an over-arching digital strategy that makes sense, and then prioritising investment in the right parts of the business at the right time. There is no point investing in a slick front-end if the back-end can’t support it; likewise, there is no point boosting back-office systems and processes to provide the capacity for growth if you don’t have the front-end digital capabilities to drive new business.

Build from the ground up start by working out the best systems and solutions to suit your business as well as those that will allow it to grow and expand. Then look for a transformation partner that understands your needs – a partner that is not just a vendor, but a consultant that will take you on the right digital journey, working to your priorities and needs rather than shoehorning you into an out-of-the-box package.

‘Disruption’ is a buzzword that has had its day in the sun in insurance. ‘Legacy’ should no longer be the reason to limit change. The narrative has changed and now it’s time to get down to business.