Richard Warner at LV= lives and breathes technology-led disruption. A 'go digital' strategy identifies disruption threats and opportunities and then launches them as key strategy initiatives or pilots. The most recent range from using social media to identify people approaching retirement and big data initiatives to assess fraud and pricing opportunities.
When did you start your current role at LV=?
What is your reporting line?
Group chief executive, Mike Rogers.
Do you meet with and discuss business strategy with the CEO every week?
Are you a member of the board of directors?
What other executive boards do you sit on?
Group executive committee, responsible for day-to-day leadership and management of the business.
Does your organisation have a CDO?
What non-technology responsibilities do you have in the organisation?
Sourcing and supply chain (responsible for all sourcing, procurement and supply chain management across the business), property and facilities (responsible for the provision and operation of all our sites), and group change (responsible for supporting group strategy and change projects such as organisational change, regulatory or M&A).
How many employees does your organisation have?
How many users does your department supply services to?
How do you ensure that you have a good understanding of your business and how your customers use your business's products?
My team is aligned with the operational areas of the business and we have close links and regular interaction with the customer-facing management teams. I attend a weekly executive committee meeting with the MDs of the business where we discuss how the business areas are performing and any issues. I have regular meetings with key stakeholders in the business and either myself or my management team attend operational meetings on a monthly basis. I also spend time talking to customer service staff and key line managers to get their perspective on our services and how customers feel about them. We also use regular empirical surveys of customers and intermediaries to get their opinions on our services.
LV= technology strategy and IT agenda
Is your organisation being disrupted by the internet, mobility or technology-oriented start-ups?
Are you empowered by your organisation to disrupt from the inside?
Describe a disruptive measure you’ve led or played a major part in
We have a clear strategy to respond to technology-led disruption, which has a couple of key elements. The first is our 'go digital' strategy, which aims to identify disruption threats and opportunities on a number of fronts and assess their applicability to our business. Depending on their potential value, we then launch these as key strategy initiatives or pilots to assess them. We have concluded a number of these in 2014, ranging from using social media to identify people approaching retirement, big data initiatives to assess fraud and pricing opportunities, and current projects to offer new services to customers following major changes to the annuity market in the 2014 Budget. Our key approach is to look at customer need, value chain opportunities and emerging technology, and identify where the three intersect to create new proposition potential.
We also take a more technology-led approach, looking at director-level business problems which we can address with emerging technology. The approach is deliberately focused on 'fail-fast', with an objective of building a demonstrable solution to a business problem within six to eight weeks. At the conclusion of this, we either progress or stop the initiative. Through this approach, we have been able to launch new products to customers within weeks instead of months, trialled emerging technology such as data analytics and voice recognition, and have built new platforms to support business productivity very rapidly.
A good example of a recent initiative is Resolv=, which was launched from start to finish in a matter of months. The technology is a bespoke internal platform which has completely transformed the way knowledge is shared amongst staff. Resolv= uses a Q&A interface similar to Google and Yahoo, where our customer service representatives can ask questions and see, in real time, a list of suggested answers from their peers and subject matter experts. Members of our technical assistance team monitor Resolv= daily to mark accurate responses ‘correct’, so staff can see which answers are right.
The purpose of Resolv= is for expert knowledge to be shared from one to many (over 2,300 employees) through a transparent social learning platform. The aim is to help ensure the accuracy of answers and continuous improvement of information given to customers.
Resolv= uses gamification to offer a fun and interactive approach to learning. If an answer is ‘liked’ by fellow peers, it wins points. Resolv= supports the objectives of our company vision by growing and proactively sharing knowledge across the business. For an initial £20,000 investment, we are seeing an ROI of around £1.5m.
The success of these initiatives is leading us to take a different approach to technology investments - broad business engagement early on, willingness to try new technology, shorter procurement processes and a clear focus on shorter delivery cycles.
What major transformation project has been recently completed or is under way at your organisation?
Our biggest transformational project so far is the ClaimsCenter system, which we have implemented for our front-line people dealing with general insurance claims. It has transformed our claims processes, achieved significant savings and paid back ahead of schedule. We are now mobilising the next phase, which is to replace the underlying customer and policy management capabilities and pricing systems.
What impact will the above transformation have on your organisation?
ClaimsCenter has had a huge beneficial impact on the business. Claims in LV= had historically been handled on a number of legacy green-screen systems supported by a large number of standalone databases and spreadsheets. Maintaining and making changes to the main legacy system was complex and expensive, and was restricting the future growth plans for the company.
ClaimsCenter provides a single claims management system across LV=’s motor and home claims. Before the roll-out, our claims information was fragmented and inconsistent, across multiple systems and databases. It was impossible to compare claims history across products and information had to be manually cross-checked and tracked when needed. The new system allows claims handlers to see all of the customer information, claims history and correspondence with the claimant and suppliers. The whole system is paperless and provides automated interfaces to our major third-party suppliers and is integrated with our core policy systems. This has improved our relationship with suppliers, by providing us with a direct link to them at any given time.
Communication templates have been developed for customers and suppliers with different built-in templates for various scenarios. We now use much more email contact with customers and customer documentation has greatly improved as a result. The system also has an in-built diary that allows us to programme reminders for payment deadlines, helping to improve the customer experience and settle the claim more quickly.
The amount and quality of data stored and tracked in the system has significantly improved. Fraud risk indicators are automatically recognised and can be picked up at any stage of the claim; the claim is then automatically referred to the claims validation team for investigation. The success of this project has been externally recognised by a number of organisations.
Looking ahead, the next phase of implementing new customer and policy capability will enable us to design and launch new products and services to market more quickly, be more responsive to changes in the pricing environment, and improve customer engagement by providing a more cohesive view of the customer.
How has your leadership style contributed to the outcomes of the transformation project?
I try to focus on three key areas when it comes to major transformation projects:
Alignment. Are we clear on the business outcome we are trying to achieve across all the interested parties involved? I see it as a key part of my role to enable this discussion and to help create clarity regarding the objectives. This enables the right debate to be held beyond just technology - ie the operating model implications, the capabilities we will need, etc.
Empowerment. A second key focus for me is creating the environment in which the team can succeed, giving them both the room and the challenge to drive the transformation and take accountability for decision-making to maintain direction and pace.
Pragmatism. Transformations can often sink under their own weight as we try to achieve too much or get lost in process. I try to cut through the decision-making process where appropriate, and help maintain momentum and focus on small successful steps.
What key technologies do you consider enable transformation?
I think it is very hard to specify individual technologies - it very much depends on the nature of the business transformation being pursued. We have examples today where we are considering or using industrial-strength solutions as this would be appropriate for a mature part of our business with low risk appetite; in other areas we are looking at emerging technology which would put us at the front of the market, but this is for transformations in markets/sectors where the characteristics are more start-up like.
Are you increasing the number of cloud applications or infrastructure in use at your organisation?
What is your information and data analytics vision for the organisation?
Insurance is an information-intensive business. Our products are virtual and our decisions on pricing and paying claims are heavily dependent on good data insight and analysis. We want confidence that our data is accurate, of good quality and accessible at point of need - all basic stuff. Looking ahead, it is clear that more data sources will become available to us and that we need to blend traditional empirical sources with more social and unstructured data. Therefore, we are focusing on a few things:
• Ensuring existing internal data is well understood and managed.
• Creating the right MI infrastructure for the day-to-day management of the business.
• Building the future analytics capabilities to allow richer insight.
• Researching alternative sources of data and the means of ingesting and analysing them in future.
How is mobile and social networking impacting operations and customer experience?
Mobile is having an increasing impact on our business. Our employees, intermediaries and direct customers expect access to a growing number of services on a mobile basis, something we see in our own data. To that end, we have put signficant investment into ensuring we can provide some of these key services, ranging from new customer-facing websites (Google has used one of our sites as an example of how to do mobile design) to equipping our sales people with new tools and physical devices to give them a better mobile experience.
Social networking is also important to us. Inevitably there is the need to monitor activity on social sites with regard to brand and customer service, but we have also been looking at how we use social sites to determine customer needs and intentions. Social working within the enterprise is also growing and we have created a number of social capabilities to support the business - from Resolv= to an internal ideas platform called Innovate, which is proving hugely successful in gathering ideas from employees and promoting internal discussion and action on them.
Describe your strategic vision towards shadow IT and BYOD. How do you influence and engage executives and employees around choice?
We actively promote both in that we see the growing IT capability of our employees and we want them, where appropriate, to bring new technology to bear to improve customer experience and productivity. To that end we have launched an inititative called Digitise the Enterprise, which is focused on supporting business users in implementing technology solutions themselves where it makes sense (for example, workflow for our broker business). We are doing this by creating a virtual app store of technologies which we can see have value in the business and we will support but believe the business users can largely implement without our support.
On BYOD, we are open to it but it is largely restricted to mobile devices at present where we use an MDM to support it. However, we do have examples of individuals using their own laptops as well.
Who are your main suppliers?
Atos, Vodafone, Azzurri, Oracle, Microsoft, Guidewire.
LV= IT security and budget
Has your organisation detected a cyber intrusion in the last 12 months?
Has cyber-security risen up your management agenda?
Does your organisation understand the potential cyber-security threats it faces?
Has this led to an increase in your security budget?
How much is the IT operational spend compared with the revenue as a percentage?
What is the strategic aim of the CIO and IT operations for the next financial year?
• To support major transformation projects in our general insurance and life businesses.
• To enable further productivity savings across the business through the effective use of technology.
• To identify further opportunities to disrupt our business or the industry through technology.
• To ensure the reliable and secure delivery of services to our customers.
Are you finding it difficult to recruit the talent you need to drive transformation?
Has recruitment and retention risen up your agenda as a CIO?
LV= technology department
How would you describe your leadership style?
I try to provide an exciting vision of the future, combined with creating the platform for everyone in our team to flourish. I do this by being intellectually challenging and curious, by being open and inclusive with everyone in the team, and by giving people the room to do their job.
Explain how you’ve supported and developed your senior leadership team to support your overall objectives and vision
I try to set my leadership team stretching goals each year in terms of how as much as what. In other words, while it is important to focus on the specific outcomes (money, projects, service), I also want them to think about how we want the service to feel to our customers, how we want our people to feel about working at LV=, and how we want to differentiate from our competition in terms of the capabilities and approaches we take. To that end, we have worked together to better understand each other's style and approach, what motivates each of us, what a good and bad day feel like to us an individuals so that we can succeed better as a team. We also look for specific coaching and development opportunities for each member of the leadership team, which varies depending on them as an individual. I'm a big believer in ensuring I understand the individuals really well and them having good self-awareness so that we can be more effective together.
How many employees are in your IT team?
What is the split between in-house/outsourced staff?
Largely insourced - about 90%.