IDC Interview with Martin Frick, COO Generali Switzerland
IDC EUROPEAN FUTURE OF OPERATIONS DIGITAL SUMMIT 2021
We had the great pleasure to exchange views on the topic with Advisory Board Members of the IDC European Future of Operations Digital Summit 2021.
The following interview was conducted between IDC and Martin Frick, COO at Generali Switzerland.
IDC: Could you describe what is your role as COO of Generali, and what it means as the operations lead?
Martin Frick: At Generali Switzerland, the role of the Chief Operating Officer has a strong transformatory character, the delivery of change based upon IT capabilities. It is important to understand that in Financial Services in general, the operational capabilities of a company are strongly tied to and determined by the IT capabilities of the company.
An important starting point is the Enterprise Architecture function overseeing the suitability of the mid- to long-term development of the interplay of business processes, business applications and business data. There is a tight interaction with the Strategy and Business Architecture team reporting to the CEO to assure alignment of the transformatory journey of the Business Model of the company and the capabilities of the Operating Model. Using the context of enterprise architecture, we then have two teams focusing on shaping change. On the one side, Project Portfolio Management coordinates the portfolio of change initiatives, matching the CHANGE demand and supply sides, reflecting the business needs and the available resources, respectively. On the other side, the Business Engineering team translates, based upon the architectural guidelines, the needs of the business into to-be-developed capabilities of processes, applications and data. The maintenance, development and automation of business processes is managed by the Business Process Management team. Here, we leverage lean six sigma and similar process optimization techniques, as well as deploy smart process automation and robot techniques to incrementally deliver process efficiency improvements.
Next to these business development focused responsibilities, the COO department has the full responsibility for IT, both CHANGE and RUN. We follow a comprehensive IT outsourcing strategy, connecting our mid-size company to the resource and hence innovation pool of strong large-scale IT outsourcing partners. Such a set-up allows us to draw in the necessary technical and functional expertise from our partners on an as-needed basis, for example from Tata Consulting Services.
In order to leverage state-of-the-art technologies for the benefit of our business, we have created the House of InsureTech Switzerland as a subsidiary of General Switzerland. Here we co-locate relevant startups in the insurance space on premise to connect their innovative power to the “mothership” of our existing insurance business. Techniques like artificial intelligence, advanced analytics, blockchain, cyber-security, chatbots etc. thus become available to us within our direct reach, ready to optimize our Operating Model employing the latest technology trends. Also, the proximity to this insuretech incubator helps significantly to drive a cultural transformation in our organization.
IDC: How would you describe ‘operations’ in your company?
Martin Frick: Besides the above-mentioned transformatory business development and IT capabilities, we have our main operational capabilities attached to the business line, P&C and Life & Pension. This amount to underwriting, customer onboarding, customer servicing, claims management. These processes depend very much on the specifics of the underlying insurance products. Therefore, and given the mid-range size of our company, we have attached these teams to the business units. For larger insurance companies, different set-ups can be envisioned. It is thinkable to carve-out the standard part of the business operations functions into a utility service company, very much the way insurance companies operate in the Anglo-Saxon markets. This would lead to a widely differing Operating Model of the company with a large-scale business process outsourcing, which we can see for example in the banking industry. What we did put in place recently, is the consolidation of all first-line customer contact functions in order to be able to provide the customers a “once-and-done” request response capability. “ONE Customer Service”, as the initiative is named.
IDC: How do Operations help your company deliver product and service innovations?
Martin Frick: The operational units in the P&C and Life & Pension business units are indeed closely linked to the product management teams to assure that the operating processes are suitable to support new products and services. The transformatory business development unit, also managing IT, interacts very closely with the business units to a) map innovations in products and processes into the core systems and b) adapt the architecture of the IT landscape to IT innovations to make sure such IT developments can translate into product and service innovations. In the Insurance business, like in Financial Services in general, the capabilities of the company in terms of supporting specific products and services, are fully linked to the capabilities of the underlying IT landscape, given the virtuality of the business itself. Therefore, new IT technologies usually have a significant impact on our offering. Recently, we have seen technologies such as AI, IoT, Mobile Computing, Big Data, Advanced Analytics and Bot technologies fundamentally change the way we envision to operate our business. IT does play a core role in determining our operational capabilities.
IDC: What are your top priorities in 2021 (and beyond) to significantly improve the performance of operations?
Martin Frick: The efficiency of our operational model is tightly linked to the straight-through processing capabilities of our core systems. Manual processing steps, triggered by deficiencies in the core systems, are the main reasons for efficiency shortcomings. There are different ways to address this situation, reflecting our priorities in 2021.
Firstly, as an incremental improvement strategy, Smart Process Automation approaches use bot technologies to automate individual steps of the processing chain in RPA approaches, and can range all the way up to SPA approaches deploying AI technologies. We have an SPA centre of excellence in Generali Group, which we will leverage more. One specific example for such technologies is chat bots for incoming e-mail, document and even voice communication from our customers. The intelligent analysis of these incoming requests is a significant first step to automate downstream processes.
Secondly, one can address the process automation deficiency in a more radical and fundamental way. We are seriously considering to exchange our core systems to bring in state-of-the-art automation and subsequent operational efficiency. Such an undertaking is immense, and we are talking to partners, internal and external, supporting us in joint approaches to deliver such a fundamental overhaul. The Operating Model of the company thus adapts to the blueprint ingrained in a novel technical solution, and thus the company can reap the benefits from the new processing and product flexibility approaches of a modern platform.
Last, but not the least, we strive to combine operational efficiency with new ways of interacting with our customers. New simple and comprehensive customer journeys not only meet the customers’ demands, but they also help to drive operational efficiency. Customers are used to the effectiveness of modern digital giants, be it smartphone systems, online searches of all sorts, online retailer, etc. They simply expect the same degree of automation and speed of processing in our web presence.
Such customer interaction simplification also allows for more efficient processing, if only via the increased level of automation. Meeting customers’ expectations and optimizing the processing within the company are fully aligned in this respect. This is the core of what we call digitalization, and which is fully driven by the customers' expectations.
IDC: How is Generali Switzerland leveraging - or planning to leverage - emerging technologies to improve the environmental sustainability of your operations?
Martin Frick: An insurance company is operationally based upon its IT systems. In order to reduce our carbon footprint in this area and increase our sustainability, we are following the strategic direction to move our IT infrastructure into the cloud. The cloud provides scalability, and the environmental footprint in IT technology improves with scale. A few large servers operate much more ecology-friendly than a plethora of small ones. Outsourcing has long been established in IT and moving into the cloud moves this trend onto new levels.
A second important trend the “no-paper” paradigm. We are moving away from paper as a means of communication with our customers, at times more difficult for an incumbent than for new entrants into the market. This mega-trend is driven by the digitalization of the customer interaction, which is anyway expected by our customers and helps our operational effectiveness in the first place. As far as the internal paper consumption is concerned, the latest home office experiences in the current pandemic situation has demonstrated that an operational set-up of the company is in fact possible with a significantly reduced internal paper consumption. For the remaining printing, we have recently migrated to new, more environment-friendly printer equipment, and could reduce the number of printers at the same time.
Thirdly, we have seen that a proper functioning of the operations of the company is possible with prevailing home office, given our nature as a Financial Services business. We are moving into a “new normal” of operations with significant home office and therefore reduced carbon footprint of the commute to our offices. Along the same lines, we can foresee the reduction of the necessary office space in the future, which also helps to reduce our sustainability.
IDC: Thank you very much for the interview, Martin.
If you would like to learn more about the IDC European Future of Operations Digital Summit 2021, taking place March 23rd please click here.