It’s tough being the CEO of an insurance company today.
The digital journeys of IAG, Allianz, QBE and Suncorp all require a high level of technical know-how. Industry stakeholders suggest that some insurance company CEOs need a radical technical upgrade if they are to complete digital journeys successfully and help their firms compete against disruptors.
“There was a tweet from Elon Musk about this on a very similar topic a couple of days ago. He was talking about how program product managers and above should all be technical people as well,” said Melbourne based technology expert Ashish Rajan (pictured), head of security and compliance with the talent management platform PageUp.
“Traditionally, you never expected a product manager, or a CEO for that matter, to be technical. They just needed to have an understanding of the business,” said Rajan who also teaches a course in cloud security for the US-based SANS Institute and hosts his own podcast on cloud security issues.
“For a CEO, that might mean achieving higher sales so the company can grow its shares and so stock price can increase, especially with all the publicly listed insurance companies,” he said.
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Rajan said there is “definitely” more of a requirement for top executives, including CEOs of insurance companies, to be more technical.
He said this is because behaving like a technology company has major advantages.
“The reason why Tesla is popular is not because it’s a car company,” said Rajan. “It’s popular because it's a technology company, and it’s the same for an insurance company. If they want to be successful, they have to think like a technology company, creating products and releasing them quickly before their competitors do, and they need the ability to pivot more quickly than they traditionally would have,” he added.
Rajan said the technology infrastructure is all there and available to insurance companies.
“The onus is on the CEO or the CTO as to how much of this can they take advantage of, versus just waiting and seeing how they go as the rest of the industry evolves around them,” he said.
Rajan said this technology-focused approach to business has been proven “time and time again.” He mentioned Uber and Tesla as companies that came into traditional industries that were well-regulated, and totally disrupted them.
“The way to be disruptive in the space, to stand out and take away all the customers of a competitor, is to be more of a technology company first,” he said.
“That would be one key to success I think for anyone in the insurance space to take their company to that next level,” added Rajan.
In another recent interview with Insurance Business, Rajan said that insurance companies don’t have to partner with insurtechs to undergo successful digital transformations.
The tech expert said the big insurance companies could follow the banking industry’s lead. The banks have formed neobanks. Rajan suggested the insurers form neoinsurers.
“You have the agility of a start-up, and you get to create products which are faster and more agile and offer more for the customer, while still being part of the same organization,” he said.
Rather than a partnership with a separate entity like an insurtech, Rajan said this alternative neoinsurer model would see insurance companies establish pockets of mini start-ups inside their own organizations.
However, for some delegates at the recent InsurTech Summit in Sydney, partnerships between big insurance companies and insurtechs were a focus.
Kanopi Cover, the VIP Lunch Sponsor, used the event to highlight partnerships as one of the growing trends across Australia’s insurance industry landscape.
“The theme is going to be Creating Value: Driving Growth Through Partnerships,” said Kanopi CEO Nigel Fellowes-Freeman.
The Melbourne based insurtech expert said the insurance industry is entering a new collaborative phase. Fellowes-Freeman compared this to the fintech industry that in years past tried to out compete the banks. Today, banks and fintechs are in partnerships.
“We’re really big on collaboration and big on enablement and so the discussion is going to be about how do we foster great relationships between incumbents and new technology companies and how can we rely on both skillsets to power the new age of the insurance world,” he said.
