A lack of automation and old-fashioned business practices have not only cost the Lloyd’s market money but have also impacted the reputation and perception of the industry, according to Srinivas Rao (pictured), senior vice president and global head of technology services at Sutherland.
Having worked in digital transformation and IT services for over two decades, across a number of industries, a lot of Rao’s recent work within the insurance sector has centred on the application of Robotic Process Automation to improve operational efficiencies and drive profit, as well as implementing emerging technologies to improve customer experience.
“Working across different verticals, I see digital transformation in action from the sectors that are leading the way in best practice,” he said, “and I hope to be able to apply some of that insight to insurance.”
Rao believes that the plans Lloyd’s outlined in its Future at Lloyd’s and Blueprint One report, to modernise its processes, will be significantly aided by the deployment of robotics and automation within the sector.
Historically, Rao said, he thinks the insurance industry has been slower to respond to emerging technologies than other industries, and that this has given it a reputation as a follower of trends, rather than a leader. However, he said, the sector’s digital transformation is well underway, with many insurance organisations capitalising on the opportunities granted by data analytics, machine learning and automation.
“There are some notable areas where the sector is lagging behind; for example, in using technology to transform the customer experience,” he said. “Where we have seen digital transformation in insurance, it has largely been driven by the rising number of insurtech start-ups, offering capabilities such as an almost-instant quote experience, incorporation with smart home technologies, or pay-per-use platforms.”
It is the more traditional, established players in the insurance market that are slower to catch up to the adoption of advanced technologies, Rao said, and he believes that legacy systems are often a huge factor in this.
The current lack of automation in the Lloyd’s market means that too much time and too many resources are spent on repetitive, time-consuming and administration heavy tasks, Rao said. He detailed how these inefficiencies mean that the cost of doing business is more expensive than it needs to be.
“Lloyd’s has identified areas of the market where costs need to be reduced, such as acquisition and administration, and processing and settling claims,” he said. “These are straightforward, rules-based functions that automation could deliver, immediately helping to make key business processes less costly.”
Robotics and automation can be applied anywhere where a process is repetitive and standardised, he said, and thus could have multiple applications in the Lloyd’s market; including placing new risks and policy renewals, underwriting support for generating bordereau reports, and claims solutions.
The majority of simple data entry can be transferred to bots which are able to operate 24/7, Rao said, and this will help Lloyd’s do more business, while reducing the chance of human error. This ties into a key focus of Blueprint One which emphasises talent attraction and retention, he said, as introducing automation will allow employees to focus on more interesting and fulfilling work.
“There is a perception of insurance as the least attractive sector within financial services,” he said, “and as such, the Lloyd’s market, in particular, is struggling to attract and retain the best talent.”
Rao highlighted recent research which shows that younger generations are rating job satisfaction higher than job security or even salary, as evidence that the insurance market needs to make sure it is creating roles which are fulfilling and stimulating.
The current issues surrounding talent acquisition, he said, are largely due to graduates being faced with repetitive and laborious tasks which do not utilise their skillsets and are far removed from the hustle and bustle of the trading floor, which they probably envisioned when they set their sights on a career in the Lloyd’s market.
