An MD at Direct Line has hit back at the notion that insurtechs and start-ups are the only insurance players that want to – and can – innovate.
While many entrants to the market boast that they are unhindered by the legacy systems that can plague established firms, large insurers actually have a big advantage in that they have scale, according to Gus Park, managing director of motor insurance at
Direct Line Group, where he also heads up business development.
“We have not just a mailing list for us to contact, but a bunch of customers who are coming into our channels in very different forms, which gives us an opportunity to interact with them and to provide them a service,” Park said at an Altus Consulting event in London yesterday. “The other benefit we get is a balance sheet. People think of large insurers as being intrinsically conservative, but having a billion and a half of premium does mean that I can take some risks.”
While he admitted that innovating from a legacy business has it challenges, Park said that Direct Line had gone from “being a mature, shrinking, undifferentiated business, to one that is growing increasingly differentiated, quite innovative, and remains profitable at the same time.”
Data security is increasingly a major concern for firms, and a lot of the new innovation ideas are “very data-heavy, very data rich and involve many third-parties and the passing of data from place to place.” Park explained.
“There’s a lot of risk involved and it’s not surprising that IT functions get nervous about it… My job isn’t to wish away those challenges – we are a regulated business, we care about risk, we care about control, we have no appetite for big data breaches,” he said.
The MD also had some choice words when it comes to the trendy tech hubs that are becoming increasingly common in the industry.
“I’m not actually a big fan of innovation units, or hubs, or garages, or whatever you want to call them,” he explained. “I wouldn’t put our innovation unit in Shoreditch and show off about the fact that we’ve got all these digital natives and it’s all wonderful.”
Instead, Park said he prefers to keep innovation close to the business: “I want everybody that’s working on our business to see this and to feel part of it, and to feel that they are there to make it happen – get the whole organisation behind it.”
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