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Harnessing Technology for Improving the Assessment on Assets

By Mark Lennon, CIO, North America, JLT Specialty USA

Mark Lennon, CIO, North America, JLT Specialty USA

1. How can the evolving Insurance Industry help overcome the challenges?

A large issue faced by all data driven industries is that of poor quality and slow data. This often leads to poor business decisions being made due to the low-value insights gleaned from the available “trusted” data. Consequently, the use of older data, when it comes to building their risk models, means correlated values like weather or high-travel seasons aren’t accurately associated and, therefore, are made null. These models predominantly can come from disparate systems, which often don’t go through a rigorous quality assurance processes. This means the data that should be correlated for statistical consideration often can’t be, so isn’t included. It’s difficult for most companies to find internal data, much-less any external to the organization. This means that it’s easier for the operator to report financials quicker and more accurately than it would be for them to measure their true risk exposure. While both are key to their license to operate, the criticality to risk is by far a priority to all stakeholders. The Insurance Industry will be moving more into Risk Modeling as a service space. With greater access to external data and the ability to ingest company specific metrics, the new face of our industry will be near-real-time cloud analytics and modeling, giving our clients trusted data and insights for quality data-driven decisions making in relevant timeframes.

2. How can technology be used to mitigate rising Insurance costs?

Advances in technology enable JLT as a provider to do a few things to drive down costs. We’re moving our non-core IT activity to third parties so that we can focus on what’s core to our business. Cloud infrastructure and Cloud SaaS providers have the economies of scale (in costs, services and capabilities) with which individual corporations can’t compete. So we’re not going to. We’re moving these non-core, yet business critical, functions so that we can focus on what is available to us in this new era.

“The Insurance Industry will be moving more into Risk Modeling as a service space”

Big Data and Machine Learning, for example, can unlock our ability to run more robust modeling while using real-time data from multiple data-sets. The richer the data, the more accurate our probability and impact analysis will be. Increased accuracy means safer bets, leading to decreased costs for the insured and increased revenue for the insurer, a “win-win”. 

Clients can use the same technologies to continuously improve the assessment on assets they are insuring to equally unlock predictive and prescriptive analytics. This means less failure rates, smarter maintenance and inspection schedules and longer run-times.

It’s likely that data-sharing will be in most partnerships and agreements moving forward for this reason.

3. How can the C-Level Executives make their business counterparts think differently about the importance of IT?

We need to show them. The CIO must stay ahead of the trends and demonstrate results through data-driven analytics and decisions. Giving the C-suite the data they need in order to make informed decisions and add value to the organization is critical. We have actually seen prioritization of IT professionals and systems because of the C-suite in recent years. The JLT businesses in North America have IT at the table with the other C-levels to discuss investment; Cyber-security, data-sharing agreements, technological capabilities and availability, are all part of the discussion. Elevating the importance of IT to the board level and changing reporting structures of CISO’s and other IT professionals has also helped to emphasize the importance of skilled IT professionals within the organization.

4. How would you describe the role of a C-Level Executive today?

The lines in the C-suite are blurred more today than ever. Many COOs and CFOs spend more time on analytics dashboards, data quality initiatives and BI projects than their traditional roles. Each C-Level must be flexible and comfortable wearing multiple hats. The C-Level all must wear a piece of the CIO hat while the CIO must wear theirs at times. They each have their respective areas but better know what’s going on elsewhere and how to get-up on the current activity quick. The use of ad-hoc, on-demand reporting and the ability to know where to go in order to get trusted data is a requirement in the current market, not a nicety.

5. What changes have you seen in the IT operating model of your organization during the last five years?

Five years ago the expectation for everything to be mobile-enabled and accessible from any and all environments was unheard of and is now an expectation. Often CEOs and COOs will hand over their iPhone to show how well something like their home security app works and ask why we can’t do this for the organization. While the two environments and security protocols aren’t the same, there is a general expectation that enterprise applications mirror the experience we have on our personal devices.

As a result, we’ve seen a huge shift from traditional IT management, e.g. infrastructure, network, capacity, etc. to more Cloud SaaS integrations and agile application development requests. A change from OPEX to CAPEX. While the insurance industry is a laggard in this space we’re seeing more operational expenses move to third parties. In JLT we’re looking to build our skills, expertise, and delivery capabilities in the Cloud SaaS as well as the application development space.

6. Moving from traditional IT to a service offering model requires a major mindset shift in IT. How did you make that happen?

The technologies will change so our job is to employ people who can grow and understand the space to help us navigate the changing tides while meeting business objectives. Getting the right team in place to manage the non-core so that you can focus on the core is critical. Vendor relationship and management is more critical than ever while, in tandem, managing the business requirements, relationships and expectations. Setting the supplier up for success is critical to our success. Never before has other’s performance been indicative of the current IT teams as much as it is today.

7. What is your advice for the upcoming or budding C-Level Executives?

Keep up on tech trends and, if you think it’s important, ask your CIO if it’s on his roadmap. If you have ideas bring them to the table and help the CIO get the support and buy-in to build a realistic roadmap that grows with your company’s culture and the market demands.

Additionally, having regular brainstorming sessions with your IT team to exploit capabilities that currently exist and aren’t utilized is essential to innovation. We have a current project that is a game-changer for one of our businesses and it wouldn’t have happened without the vision and leadership of the COO reaching out to IT and asking for a partnership. If you want to move into a strategic position in your market, bring the CIO along for the ride.

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