“People have a willingness to transform, build new systems and simplify the landscape, but often we then just rebuild the same products and process on better kit. The biggest success factor in Tower’s simplification was an unrelenting commitment to product rationalisation from the executive team.”
Having adopted a brand-new digital backbone and streamlined its internal systems, NZ-based general insurer Tower is throwing its full weight behind growing its data and digital capabilities, with lofty ambitions to make insurance ever-more ‘rewarding’ for customers.
FST speaks with Peter Muggleston, Chief Digital and Data Officer at Tower Insurance, exploring the insurer’s radical simplification strategy, the art of change management, and why a lack of imagination is stopping Kiwi insurers from getting the most of their data assets.
FST Media: With a new chief executive at the helm, give us a taste of Tower’s digital agenda over the 12 months. How is your transformation journey helping to keep pace, not only with a progressively digitised society but also with the challenges of a post-Covid operating environment?
Muggleston: Customers tell us insurance is complex and hard, and that they don’t really trust insurers.
Tower has been at the forefront of changing the industry. We started internally by creating a new, modern platform to simplify the business, and now we’re using digital and data to accelerate our digital agenda in support of our customers and growth opportunities.
Proof points include:
- The introduction of a comprehensive digital channel, which grew our online sales from zero to 65 per cent over two years
- 70,000 MyTower registrations in under a year
- Risk-based pricing for earthquakes as a fairer way of pricing a customer’s premium
- Using plain English wording to give total transparency around our policies and removing the ‘gotcha’ or ‘catch-all’ disclosure question, which some insurers use as their escape clause
- 115 releases in the last year – and still accelerating
- Enriching and extending our offering to customers to make insurance simple and rewarding – for example, our acquisition of Club Marine to provide comprehensive boat insurance
FST Media: In an age where bigtechs are mastering the art of self-service and hyper-personalisation, what to you defines a winning customer interaction today? Moreover, how can insurers best bridge the growing service gulf between the tech giants and the rest?
Muggleston: We don’t compete – we partner! Using tech is infinitely scalable and increasingly accessible to everyone. It has simplified our business and reduced costs whilst giving us richer sources of data. Contrary to growing the gulf, tech enables us to compete and thrive despite the challenges of geography and scale.
A winning interaction is one that is easy and transparent for the customer. We use digital and data to ensure we always have relevant information available to the customer and only ask them things that they wouldn’t expect us to already know.
FST Media: Digital transformation is no easy feat, requiring broadscale cultural acceptance alongside the more tangible overhaul of backend processes and technologies. How should organisations act to overcome legacy thinking to deliver a truly end-to-end digital experience?
Muggleston: People have a willingness to transform, build new systems and simplify the landscape, but often we then just rebuild the same products and process on better kit.
The biggest success factor in Tower’s simplification was an unrelenting commitment to product rationalisation from the executive team. We have moved from 430 legacy products to a core suite of just 12 [over two years].
This allows you to remove exceptions, simplify processes, and retire the old systems – rather than just adding another one. This simplification leads to faster training and onboarding of staff, easier monitoring of process, and far more opportunities to automate in a consistent and standard way.
Our approach is based on a relentless simplification of the business, partnering and creating a culture that embraces digital, data, creativity and all things agile. It also involves creating a positive physical environment and, for this reason, we recently announced a move to 136 Fanshawe St which is a 6 Star environmentally friendly building where we can adopt a leading technology set-up.
FST Media: Prior to leading Tower’s mammoth transformation program, you held various IT leadership roles at organisations, including Foodstuffs, Sovereign, and ASB Bank. How did these experiences prepare you for your current role at Tower?
Transformation is a particularly overused word today, as everybody seems to be doing it all the time. And unlike (most) traditional projects, it never actually finishes…
It really comes down to leadership: storytelling, opening hearts and minds, and empowering people to contribute to the common purpose. No two projects are the same. So, whereas post-implementation reviews and lessons learnt have some value, each project is new and unique, so the only repeatable skill is to listen, learn, and quickly adapt. That can’t happen through traditional steering structures, so we need to trust our people and give them the context to make the right calls.
FST Media: Insurers today are awash with data, the vast bulk of which remains unstructured and untapped. How can insurance organisations best steward these data assets, leveraging the insights they offer to make real-world business improvements?
Muggleston: As we rapidly move more and more transactions online, we can measure things in different ways and increase the amount of data that is structured and readily usable. However, that will never fully replace the insights gained from talking to our customers directly. We use tools like QUID to interpret and make sense of unstructured data, and conversation AI tools like Ushur which allow us to understand free format chats and emails and accurately determine both sentiment and the action required – which we are increasingly able to then automate.
FST Media: In your view, what has stood in the way of Kiwi insurers reaping the full potential of their vast data repositories?
Muggleston: The obvious answer to this is the constraints of legacy systems and processes, which just makes it really hard. Many companies are able to analyse large datasets and gain useful insights at a point in time, but it is much harder to embed this into real-time customer journeys and business decision-making processes.
However, I think the bigger barrier is our imagination.
I often hear that we can’t do things because we don’t have the data and, yet, often we have more than enough and we just have to think differently about how we frame the question or whether we can use existing data as a proxy for the missing information.
Lastly, without truly understanding the data that we have, we all know, at some level, that it is important and that we should safeguard it. But this drives a behaviour where we hold onto it and miss the opportunities that come from sharing and partnering to create new value and insights.
FST Media: The Covid crisis saw a period of rapid change and transformation for the insurance sector. How effectively do you feel the sector has evolved to meet customer needs through this period?
Muggleston: I think most companies handled this incredibly well. We all had a desire to operate more digitally and remotely so the lockdowns simply accelerated the work that was already underway.
Tower had 96 per cent of our staff working effectively from home in 48 hours, and we were able to seamlessly execute all our key customer service processes.
However, what it did expose was the broader ecosystem and supply chain in which we play. As I mentioned earlier, our ability to share data and operate seamless digital processes across our partners’ ecosystems is nowhere near as mature as our internal processes. This is our next big area of focus.
FST Media: What do you feel is characteristic of your leadership style? How has this served to inspire and motivate your workforce to problem solve outside the box?
I would simplify this down to authenticity and empowerment. Bringing your true self to work rather than a fancy persona creates an environment where your team is able to be at their best, to think creatively without judgment, and to share what they are actually thinking.
Peter Muggleston is a featured keynote speaker at FST’s Future of Financial Services, Auckland conference, exploring new value-creation opportunities from data, cloud, and API integrations.