Keynote & interview Eurapco Insurance

<on 26-09-2013 I gave the keynote at the Eurapco congres where top EU insurance firms share expertise>

We live in a world of rapid technological change. Keynote speaker and IT expert Arjen Kamphuis discusses the implications for the insurance industry and its customers, and what measures can be taken to ensure the best possible customer experience. The objective was to raise awareness of the rapid pace of socio-technical development today and what fundamental effects this will have on the insurance industry. Changes in customer behaviour and expectations will have an impact on customer satisfaction with our companies’ claims handling.

Future shock – are we prepared for change? Some of the topics discussed in the keynote

  • What if tomorrow’s world looks really different? The basic rules of our business can change at incredible speed because of changes in technology, national/EU/ international policies, environmental threats and other external factors. New technology can overtake existing business models, and even make them irrelevant. The insurance industry faces the challenge of combining the need to be stable, secure and reliable with being dynamic, fast and responsive.
  • Cyber security needs to be taken care of, both within companies and between companies and their customers. Privacy issues are of great importance for insurance companies. For instance, it would be damaging for the image of a stable, secure and reliable insurance company if it were to be revealed that all customer data had been fully exposed by hackers or the NSA.
  • Today, all large service companies need to balance industrialised processes with the human touch. As a customer, you do not want to be exposed to the internal processes of your service provider. The customer just wants to receive service in an uncomplicated way. Changes in customer behaviour and expectations will have an impact on customer satisfaction with our companies’ claims handling.
  • Our companies’ brands face increasing danger in a fast-paced world of social media. Our customers rely more on the experience of others than on the promises of the companies. Through social media, good and especially bad experiences can be shared easily and quickly. We can join the conversation about our brand, but not control it.
  • A fast-changing world offers opportunities and threats for your business and your position in the market. Are you ready to adapt to changes in customer expectations? Is your organisation positioned to deal proactively with change, or could you be caught off guard? Do you have a plan for what to do if an improbable case scenario does occur? By carrying out regular scenario planning, you can at least have contingency plans for different case scenarios.
In your keynote speech, you mentioned that it’s very hard for anyone inside the insurance industry to see the world the way a customer, or other outsider, sees it. Can you, as an outsider, give us some tips about what is needed to achieve excellence from a customer’s perspective?

Insurance companies that are excellent from a customer’s perspective will still need to have operational excellence. This is necessary because efficient processes enable affordable premiums. The challenge is to make the operational excellence “invisible” for the customer, to treat the customer in such a way that he or she doesn’t notice the processes needed to deliver the service. Ideally, there’s a lean machine on the inside, while customers get the feeling they are receiving personally tailored service. This requires thought about where the “machine” part of the processes ends and the “human”, emphatic part begins. Not everything that can be done by software should be done by software. The telltale sign that the proportions are right is the customer enjoying a pleasant experience.

How can such a combination of operational excellence and customer intimacy be achieved?

Big data is an important tool to achieve this. Now, it really is possible to have an intimate relationship with the customer. However, this can only come about if several preconditions are fulfilled. Firstly, you must be highly compliant. Secondly, and most crucially, you should proactively contact pressure groups such as Bits of Freedom, EURM or the Chaos Computer Club. You can ask them to ask you difficult questions about how you handle privacy and protect the secrecy and integrity of the customer data that you use. You can also discuss the legitimacy of the goals you use the data for. The same must be done with customer focus groups. In the end, much of what can or cannot be done is dependent on individual preferences. You should enable and encourage an informed customer choice about when to supply what data. Don’t make assumptions about what customers prefer, but ask and validate. Fourthly, data should always be protected and encrypted to minimise the chance of anyone gaining illegal access. Finally, the hard- and software that you use should come from suppliers that are demonstrably not associated with any illicit eavesdropping, be it by corporate or government organisations. Insurance companies may struggle to put all of this into practice, not least because they have to deal with a lot of legacy hard- and software. This complexity is unavoidable, and you should be super-transparent about it.

The important thing here is that you “live” your data philosophy, not only in communication but also in visible behaviour. Be explicit about what level of assurance regarding data is possible today, and how that’s going to improve over the next few years. Have a credible road map for getting to the technical solutions that are needed. And again, get into contact with opinion leaders. Invite them to a dialogue to design a code of conduct, organise an employee training day on internal compliance together. It’s bound to be educational for all involved. If you act on your good intentions in this way, there are still going to be blow-ups because of data problems. But even then, a good relationship with opinion leaders will help enormously in containing the damage.

You also said American companies are at a disadvantage in terms of reassuring customers worried about privacy because of the nature of US privacy laws and the scandals surrounding the NSA. Does this also mean you see new business oppor­tunities for European insurance companies?

Sure. European insurance companies could provide “privacy-strong” ISP services, data centres or cloud space guaranteed to be compliant with Article 12 of the UN Charter. And what about a “safe Facebook”? What about a service that says to the customer: we will help you leave Facebook behind you? Moreover, providing high-privacy/ security online services to (European) customers is not only a business opportunity for the insurance sector, but also a great way to show leadership in socially responsible entrepreneurship. The privacy issue will only grow as more of the 78,000 plus documents from Snowden are released (so far we’ve seen only about 200, and the best is being saved for last). Insurance companies can work towards being the trusted parties by way of clear moral leadership on customer interaction and care of data. Such companies would surely also attract some of the most talented and motivated employees: everyone wants to work for companies that are seen to be leaders.

  • “He is a really inspiring person with a truly interesting vision for IT and the insurance business.”
  • “Thank you, Arjen! Your presentation was refreshingly blunt and, in my opinion, realistic. I think Eurapco showed courage inviting you to speak about things most of us want to ignore.”

'Refreshingly blunt', best compliment I've had in a long time ;-)