Note: this text has originally been published in the InsuranceInsider on April 2, 2020.
“The most important message is about culture and having the right people and the right partners in the journey,” says Adrian Blidarus in the interview given to Insider Quarterly by Insurance Insider.
“What matters most for successful digital transformation is often not the technology itself, but rather how people react to it.”
Successful businesses aim to please the customer, and any technology initiative should have the same objective in mind, with the appropriate culture within to achieve the aim.
“The most important message is about culture and having the right people and the right partners in the journey,” says Adrian Blidarus, co-founder and CEO of InsurTech and technology services provider Softelligence.
“Most of the time, innovation is not about investing in some cool new technology but using technology to contribute value. Digital transformation means knowing your customer deeply, personalising interactions, understanding what a client wants, knowing what they expect, and when they expect it.”
Not all companies feel comfortable when they hear the word disruption, he admits. However, when innovation happens elsewhere, if you can’t innovate in reply, the best strategy is often to follow where it leads. “It’s important to take steps – maybe baby steps, maybe larger steps. If you can’t innovate at that level, then adopt a strategy to follow it. Go as fast as you can, but don’t sit and wait,” he emphasises.
The exponential strides being made by technology form part of the argument for digital change. The risks of being left behind are greater today than previously, as the tech grows more powerful, more quickly. Blidarus warns that innovation is not a probability or a possibility anymore, but something expected to happen on a very frequent basis.
“It’s important for companies to experiment and to start doing things now rather than to over-plan or over-strategise.”
“The more you postpone a decision, the wider the chasm between the status quo and the desired target state becomes.”
“The risk of getting left behind is more important than ever. You can get so far behind, so quickly, that you can’t make it back to the front of the line. Things are moving so fast that if your competition gets ahead and innovates, and innovates again, it’s much harder to get back to the front.”
Blidarus began coding at 16 to become a developer and programmer. After studying computer science in his native Romania, he co-founded Softelligence with his brother in 2006. The company initially set about digitalising customer interactions for lenders and banks that were expanding fast but unable to serve customers via non-digital means or with web portals that were struggling to cope.
The first insurance clients – brokers and carriers – followed from 2010. London market business is now a real priority for Softelligence and it’s also at the forefront of innovation, says Blidarus. The niche, bespoke and specialty lines that form the core of the London market are better sources of innovation than commoditised lines of insurance elsewhere around the globe.
“London is the capital of the world in specialty insurance and it’s the place to be if you want to do innovative insurance business,” Blidarus says. “I don’t think you can find the same level of understanding and sophistication concentrated on this scale anywhere else in the world.”
Although individual client priorities can differ, with some firms identifying claims or underwriting as their first focus, the high-level approach is simple, he says. This is focused on optimising customer interaction and experience, whether that’s for an insurer or any other type of financial services business.
“We help them create customer journeys, and most of all data-driven journeys. The idea is the same at a high level: digitalising the business, understanding and predicting customer behaviour.”
Comparisons with banking are positive for insurers, he suggests. “Insurance is now moving at a faster pace. The culture has proved to be more open than banking, the working environment is more flexible and insurance is less tightly regulated so it’s easier to innovate. It is a good thing if you are willing to drive changes, to think differently, and to accept different ideas,” he says.
Insurers must also be more proactive, he emphasises. Banks are more reactive because customers come to them. Billions have been spent on financial technology, and the fintech space has become crowded – yet the sector still shows inertia, he suggests.
“Compared to banking, insurance has a harder time trying to sell its products. For example, think of when the typical consumer is legally compelled to buy an unsophisticated product such as motor insurance. But once you understand the concept of risk, you understand why insurance is so useful, and essential to sustainable growth,” Blidarus says.
No matter how open an organisation is culturally, there is always resistance to change, so despite the optimism, digital transformation can still be a trying experience.
“Society is changing, and players need to adapt to reflect those changes.”
“Nobody is doing change for the sake of change: the only person that welcomes change is a baby waiting for a new diaper; for the rest of us it requires work and discomfort.”
Blidarus compares digital journeys, for commercial lines customers as well as SMEs and personal lines, to the experience of a customer entering a four-star or five-star hotel. “At first glance things don’t seem much different, but once you start interacting with people it is the quality of the service that’s the differentiator, and that’s vital for any insurance business,” he says.
The costs of keeping up and regaining what was lost due to reluctance to transform a business can greatly outweigh those of piloting and incubating innovation and not getting it right every time – of iterating towards digital transformation today, not tomorrow, he stresses.
“In our experience, most organisations have pockets of innovation, but as long as the process of digital transformation is seen as ‘too technical’, the business misses out on the larger point, that technology is just a tool to help them achieve their goals more efficiently,” Blidarus adds.
For a technologist, he is surprisingly interested in company culture. It is impossible to drive change without people’s buy-in, he stresses. Seeing as it is impractical to imagine changing people, the challenge is to still be successful in driving change to achieve meaningful results.
“We should never talk about technology in isolation, but about people’s willingness to embrace it.”
The answer, he explains, involves changing the way people perceive themselves and interact to create a data-driven culture. “Culture manifests itself through symbols, heroes, stories and rituals. All in all, cultural change and digital transformation need to form a cohesive programme where people’s willingness to change things ends up delivering on digitalisation,” he says.
He is keen to underline the serving role of artificial intelligence (AI) – a buzzword but also a source of misunderstanding – with many people fearing machines are out to take their jobs. What AI does spell the end of is decisions about complex matters made on intuition alone, he points out.
“We’re hard-wired to use intuition to solve problems rather than data,” Blidarus warns. “The problem is that the environment is changing so quickly, it makes intuition and experience irrelevant. Increasingly, the only things that you can actually count on are the data.”
“It’s important for everybody to understand that nobody is trying to replace people,” he continues. “While achieving digitalisation, some degree of automation or a machine learning algorithm will be introduced that will replace or improve previous work, meaning those human resources are freed up to focus on the tasks that only humans can do best – to be more creative and to be more innovative.
“Ultimately all these automated processes for digital transformation should help us regain the time to focus on interacting with our fellow humans while everything else is automated.”
