Sébastien Meunier, Senior Manager, Chappuis Halder & Co., is an expert in innovation in finance, among the top 10 fintech influencers on social media. He has successfully defined business strategies and led global transformations in financial institutions, from Business Lines to IT / Operations and Transverse functions.

Ahead of the 4th Annual OPEX Insurance: Disruptive Transformation Summit, key speaker Meunier discusses the threat digital disruption poses for incumbents, and how the industry is moving towards increasing personalization, decentralization and better risk management. Meunier also shares his insights 4 ways blockchain is transforming business.

How would you describe the current state of operational excellence in the insurance industry?

I would say that it is very diverse. Most Insurers are conscious that the industry is on the brink of major change and have started to launch programs in different direction: cost reduction through outsourcing & automation, improvement of the customer experience through mobile services & personalization, and new offerings leveraging new technologies such as sensors & telematics.

However, only a small number of them are able to combine the different dimensions of operational excellence consistently from strategy to implementation, improving the quality of the services delivered to the customers while reducing their cost structure at the same time

What are some of the opportunities and threats the industry is facing with respect to digital disruption?

Obviously new technologies offer incredible opportunities. Data analytics combined with sensors can be leveraged to get insights from customer data, develop dynamic risk models and build on-demand insurance services. New trusted infrastructures (such as but not limited to distributed ledger technology) could allow to perform direct transactions without intermediaries (peer-to-peer insurance, parametric insurance). Open platforms could allow to create new ecosystems and new partnership models.

The risk for incumbents is that new entrants or adjacent entrants (car manufacturers for instance) take advantage of these new opportunities before them! One big risk is also to lose focus. Insurers must always keep a business perspective, and see beyond the hype of the buzzwords (the next “big data AI IoT on blockchain” project) to identify use cases that do make sense in the real world. Another difficulty for the industry is that Insurers don’t have that many touch points with their customers. Ideally you would never use your Insurance app! But the day you have an issue, you need to be able to file a claim or seek assistance at this exact moment. This is a problem both in terms of experience design and customer acquisition & retention. On the other hand, you have daily interactions with the social media giants or even payments service providers, what if they provided Insurance services? (example of Rakuten!)

How is InsurTech reshaping the insurance industry?

InsurTech startups are challenging incumbents and forcing them to transform and get better. Insurers are growing internal capabilities and are also partnering with startups to develop innovation. This is excellent for the consumers. The industry is moving towards increasing personalization and decentralization (empowerment of the consumers) and better risk management (sensors, telematics).

How can we better leverage digital transformation to bring together operational excellence and innovation?

Innovation is worth nothing if it is focuses only on idea generation and strategy. The key to deliver actual innovation is operational excellence! You need the right processes & systems to transform ideas into proof of concepts and scale them. Digital transformation can facilitate this process by providing relevant tools (knowledge management, networking, design thinking, etc.), but one of the key success factor is culture. Peter Drucker said that “Culture eats Strategy for breakfast”, it also eats Innovation for lunch.

What would be your top tips for to overcome incumbent legacy systems to install new technology?

Installing new technology is easy. Revamping the IT legacy and building a modular architecture is difficult, usually because this is the first budget to be cut during the yearly budget process. My advice: convince the board, make the building and maintenance of a modular “digital factory” a top priority.

How is blockchain transforming business?

I would distinguish 4 uses:

• “Blockchain” is decentralized by essence, it looks like the perfect fit for peer-to-peer Insurance services (teambrella, safeshare, inchain, …)
• Smart contracts could be leveraged for parametric insurance (Dynamis, InsurEth, …)
• Micro-Insurance services on top of micro-payments services (Consuelo, …)
• “Distributed Ledger Technology” (i.e. mere crypto-enabled shared databases) could be used to design more efficient business processes (not specific to Insurance – and don’t bring claim management here because I can think of maybe 10 ways to optimize the management of claims without using DLT)

In this regard, I am curious to see what will come out of the B3I initiative.

As a member of the advisory board what do you hope to bring to event?

A unique vision on how to deliver actual innovation in the finance industry, at the intersection of business and technology. A balanced view about what new technologies can do and what it can’t do.

Interview conducted by Andrea Charles, Senior Editor, PEX Network

How prepared are you and your organization for the changes on the horizon?

Find out more from Sébastien and 60+ insurance industry speakers and conquer the chaos and technology of today to become the insurer of tomorrow.

Only at the 4th Annual OPEX Insurance: Disruptive Transformation Summit, taking place September 18-20, 2017, in Atlanta. For more information, go to: www.operationalexcellenceinsurance.com

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