Exploring insurance catalysts for change: a conversation with Kurt Mitzner

Digitization has become a buzzword recently, and especially with the changes driven by the COVID pandemic. I caught up with Kurt Mitzner from Deloitte, to talk about COVID as a catalyst for change, and what digitization really means now.

Kurt, my perception is that the pandemic will be a catalyst for real change. How do you see this impacting your clients?

That is my perception too. Even so, I have been surprised how quickly things have changed. However, we have to remember that digitization does not just mean remote working. You can talk about the digitization of processes, or products, but it’s really about customer interfaces and the customer journey. The pandemic has just made things happen very quickly. I know clients who have been discussing for years how to get software changed so that it supports remote working, and suddenly it all happened in a few weeks. That has been a huge learning curve for the industry.

How would you rate the position of insurance companies to drive real digital transformation?

It is difficult to say, because some are more advanced than others. Some are also much younger, so they don’t have the legacy issues, or even traditional organizational silos. It is much harder if you are faced with outdated IT systems that all do not communicate with each other. Legacy IT is a big stumbling block for use of analytics. The biggest change challenge is modernizing IT so that you increase your options. I think approaches to bring in agility are great, but there are still many issues to solve.

My perception is that many insurers still see AI not as a means to an end, but as an independent topic. What is your view?

I don’t think that’s the majority. I cannot mention any names here, but some insurance companies have approached this very agnostically. They wanted to check all areas across the entire value chain. This is a relatively broad and fairly expensive approach, but it is definitely effective. And, of course, there are more opportunistically driven players where very strong internal departments sometimes just buy technology that they want.

How would you rate the digital maturity in the insurance sector at the moment?

I think the telecoms industry is ahead, as is retail, especially on how to do individual pricing. On customer analytics and the customer journey, the insurance industry is probably on a par with banks, especially traditional players. I put that down to both being regulated industries, which often limits adaption- and innovation-speed. There is a lot of AI in use, but there is also plenty of room for improvement across all areas of insurance. I think we will see this improvement over the next couple of years. There are already pockets of good practice, but it comes back to the IT capability.  

What developments are you seeing to solve some of these issues and improve innovation?

We are doing several very large projects in the area of agile coaching to help build interdisciplinary teams. We are also seeing activities in the business building area, where insurers try to build up new capacities either together with start-ups or FinTechs or with their own resources. I think that is certain to increase, because it is simply not possible to work at the required speed otherwise.

What concerns are you seeing around data, ethics and transparency?

The biggest concern for me is always data protection. I think that’s the case for customers, too. Data protection is a mega-issue, especially in Germany. In China, though, it’s not an issue at all. And in the USA and UK less so than in Germany. You need sensible governance. It also needs to be compliant with regulations. I think from my point of view, at least you need to make sure your actions are not unethical. There are also issues about disclosing the logic behind decisions, because that could affect intellectual property. One can understand why companies don’t want to make everything public and transparent.

Do you think this need for transparency is affecting innovation?

The speed has increased and the approach has changed, too. Insurers are now approaching things more specifically and openly. I think there is also more innovation because the people in insurance companies are becoming more diverse, especially in data science, and in management positions. These people are bringing in new ideas. Sometimes hiring is done in a very targeted way to bring people in from other industries. I think we are also seeing more value chains and ecosystems coming into play, with more partners involved.

Innovation at Scale - The longer view

I want to thank Kurt for sharing his insights on a topic that is dominating discussions and decisions. The SAS global study team is exploring accelerated transformation over the summer of 2021. Tune in to study updates here. We’d love to hear about your experience - please leave a comment below and let’s keep asking the right questions.