Sponsored: Delphi Technology Inc.

Digitization and Automation: Bringing Speed Where it’s Needed

The Delphi Accelerator product workbench provides an automated approach that can give carriers a significant competitive advantage.
By: | October 25, 2016 • 6 min read

thinkstockphotos-125558951_700x525Technology offers advantages of speed, efficiency and accessibility, but it can also be a disruptive force. Insurance has struggled to keep up with the pace of advancing technology. As an industry, it manages vast amounts of data but also contends with bulky legacy systems that make it difficult to implement new solutions.

On the other side of the coin, technology acts as an equalizer for newer, smaller carriers that are better positioned to implement the latest tools, allowing them to compete on the same playing field as larger players.

When speed to market offers a critical competitive advantage, large carriers have to find ways to update old processes and harness technology’s benefits.

Product managers in particular shoulder the largely manual process of importing industry-standard updates, analyzing them, and implementing any changes needed to existing coverages. The multi-step process is both time-consuming and expensive.

“According to Novarica research commissioned by the ISO, any carrier performing this in a manual way without any electronic means to do the analysis and evaluation are about half as current and are spending twice as much money as carriers using some automation,” said John Flavin, Senior Vice President and Chief Business Development Officer, Delphi Technology, a provider of business software solutions to the insurance industry.

Large carriers with many product lines in multiple territories could be receiving circulars from The Insurance Services Office (ISO) on a weekly basis. Each one contains product definition updates that the carrier may have to implement either to stay compliant or simply to stay competitive.

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John Flavin, Senior Vice President and Chief Business Development Officer

Product managers have to compare the updates to their current product and examine what underwriting rules, rating algorithms and forms may need to change if the update is implemented — and how those changes will impact their book of business. They need input from internal stakeholders, including underwriting, legal, marketing, IT and actuarial representatives. And don’t forget external approval from regulators. All this before policy administration systems can be updated with the correct product information.

Completing each step of this process manually can take months, and a lot of dollars.

“On average, based on industry research performed for ISO, implementing an ISO circular completely manually costs about $45,000,” Flavin said.

In the meantime, companies with digitized methods are getting to the market sooner and nibbling away at market share.

Accelerating Product Management

Delphi Accelerator helps to digitize and automate this process.

Delphi Accelerator product workbench allows imports of ISO ERC and AAIS product data and rate tables into a central dashboard — a self-contained area where product managers have easy access to the information and tools they need to configure and maintain insurance products. Importing industry standard or proprietary content digitizes the content, making it easy to analyze and manipulate.

Key product processes can then be carried out in the dashboard: comparison and analysis of product definition changes for rate maintenance, configuration of product definitions to carrier-specific conditions, sharing with stakeholders and obtaining approvals.

Finally, updated definitions can be deployed from one central dashboard to many policy admin or point-of-sale systems. When done manually, there is no way to mass export new information to many systems from one source. Using Delphi Accelerator cuts down on the time it takes to make new product definitions available for the market.

This digitized process not only cuts months of work down into just weeks or days, but also yields significant cost savings.

“Using electronic means, ISO circular implementation costs 60 to 85 percent less than the manual method, according to research done for ISO by Novarica,” Flavin said.

Any new or updated products of course need both internal and external approval before they can be deployed. The sheer number of stakeholders involved in decisions to implement ISO changes, or launch or consolidate products, is perhaps the biggest speedbump for the insurance industry.

Delphi Accelerator’s dashboard packages new ISO, AAIS or proprietary content, product comparisons and impact analyses into a centralized and easy-to-navigate space where internal stakeholders can review proposed changes easily and deploy and maintain products. Without Delphi Accelerator, product managers have to configure carrier-specific product definitions separately on each policy admin system for different parties to see.

Quick Comparison

While there are many benefits of this technology, one of its most impactful features is its comparison tool.

“If ISO publishes a circular with rate changes, product managers can quickly compare the proposed changes to the policy definition that’s in place already,” Flavin said. “They’re able to see key pieces of information that make up the product definition, including coverages, rates, algorithms and domains.”

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Figure 1 – Rate Table Comparison Details – shows Deductible Factor differences between the Product Manager’s override in the “Factor” column and the industry standard table in column “A”.

The comparison tool helps product managers determine quickly whether or not a change needs to be implemented, but it also expedites the process of launching new products or consolidating existing ones.

“If a product manager is debating launching into a new territory, they could easily pull down that state’s industry standard product definition, layer on their own carrier-specific configurations, and start to run test quotes within Delphi Accelerator,” Flavin said.

Without automation, gathering ISO data and assembling test quotes to share with stakeholders would require a large chunk of IT resources, and a lot of time. Delphi Accelerator allows decision-makers to see proposed quotes in a test environment before publishing those quotes to a network of policy admin systems.

Improving the Bottom Line

Delphi Accelerator’s analysis features also help carriers capitalize on business opportunities by facilitating product consolidation.

More carriers are looking for ways to deliver the same coverages in a more efficient way in order to reduce expenses. In the current low interest rate environment, insurers can’t rely on investment income to bolster their expense ratios. Merging product lines offers a way to trim overhead expenses without compromising coverage or sacrificing premium dollars.

Take for example a business owner’s policy. Traditionally, this policy covers all the exposures that a small- to medium-sized Main Street storefront businesses might face — general liability, property, crime, business interruption, etc. Over time, though, the product has expanded in the market to cover independent contractors and various business services. Many BOPs now resemble a commercial package policy that is geared more towards more complex and specialized risks.

“Rather than maintain both a business owner’s and a commercial package policy, product managers may look into joining the two into a single product. This would cut down overall expenses while meeting the needs of both target markets,” Flavin said.

Delphi Accelerator’ s rating impact analysis tool allows product manager to create benchmark pricing for the new product and compare it to the books of business for the two original products.

“The rating impact analysis will help users to understand what the true premium change will be and how that impacts the overall book of business,” Flavin said.

“The gains in efficiency offered by automation are clear. The old paper processes simply won’t cut it anymore,” Flavin said. “Any carrier that can maintain, manipulate and share their content efficiently in a cost-effective manner will win the day.”

To learn more about Delphi Technology, visit http://delphi-tech.com/.

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Delphi Technology Inc. The editorial staff of Risk & Insurance had no role in its preparation.




Delphi Technology is the recognized leader in technology solutions for medical professional liability insurance and an emerging provider of technology solutions for property and casualty insurance.

Insurance Executive

A Leader for Turbulent Times

Lloyd’s CEO Inga Beale is tasked with guiding the venerable insurance market through Brexit and the demands of the fiercely competitive global specialty business.
By: | July 6, 2017 • 12 min read

Underwriters at Lloyd’s are accustomed to taking on complex, even daunting, risks. The company’s leader looks at the world today and sees plenty of opportunity, but also much to be concerned about.

“Political instability is something that troubles me more than anything else because I think there is now more uncertainty across the world than there has ever been,” said Inga Beale, CEO of Lloyd’s of London.

“It feels that all of the norms that I grew up with are being challenged — openness, globalization, acceptance, inclusion — on a global scale.”

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Appropriately, we’re sitting around a table in Beale’s modern glass-fronted office at the top of the Lloyd’s Building — itself a vision from the future — to talk about Brexit and Lloyd’s newly announced Brussels subsidiary.

Add to the mix Donald Trump and the threat of nuclear attack from North Korea, the bombing of Syria and a spate of terrorist attacks across Europe, and it’s clear we are living in the most dangerous period certainly since the Cold War, or possibly ever, believes Beale.

That belief received even more chilling reinforcement when terrorists detonated a bomb at an Ariana Grande performance in Manchester, England on May 22.  Twenty two people, some of them children, were killed and more than 50 wounded in that attack.

Three years ago, it was Beale herself making world headlines with her appointment as the first female CEO in Lloyd’s 329-year history. But now Brexit and other seismic disruptions to world order have taken center stage.

Lloyd’s announced at the end of March that it would establish a new European subsidiary in Brussels in time for January 1, 2019 renewals so it can continue writing risks for all 27 European Union (EU) and three European Economic Area states after the UK exits the EU.

Currently, it uses its passporting rights to serve EU customers from London, but the expected loss of those rights after Brexit necessitated the establishment of a new subsidiary.

For now though, it’s business as usual, said Beale, with the UK remaining a full EU member for at least two more years. She added, with a reassuring smile, that there will be no immediate impact on existing policies, renewals or new policies written during that time.

“We were campaigning very much to remain in the EU before the referendum because we knew what the likely impact [of leaving the EU] would be on Lloyd’s,” said Beale, whose impressive resume includes stints with GE Insurance Solutions, Zurich and Canopius.

“We rely very much on our licensing network, and being part of the EU means that from London we can write insurance and reinsurance for all of the EU countries with our passporting authority.

“But with the UK exiting the EU, it now means that we lose those licensing powers to offer insurance with immediate effect. To counteract this, we have determined to set up a subsidiary within the EU, meaning that about five percent of our global revenues will have to go through this subsidiary because it is insurance business offered to our EU-based clients.”

Beale and her team also negotiated that most of Lloyd’s underwriting business will remain in London, as will the majority of the transactions and decision-making powers. Meanwhile, the manpower needed to run the new Brussels operation will be in the “tens rather than hundreds,” she is quick to point out.

“It’s not a huge raft of people having to move over,” she said.

“Lloyd’s will continue to do 95 percent of its business as it has always done — it’s only the other five percent that will have to go through a separate legal entity, and we’re not anticipating any further changes to our business model as a result.”

Beale, whose dual role is both supervisor and advocate for the market’s 100-something member underwriting syndicates, says that the franchise board chose Brussels over other locations including Luxembourg, Dublin and Malta because of its “robust and quality” regulatory regime.

“At the time, I didn’t even know that reinsurance existed, but once I discovered it I absolutely loved it.” — Inga Beale, CEO, Lloyd’s of London

It also provides access to a multilingual talent pool, is near to London, and, most importantly she stresses, is located in a member state with a “very high certainty of staying in the EU.”

“We want people who reflect our customers,” she said.

“The London insurance market is littered with people from all over the world because London is such a global insurance hub, so we need experts here who speak the language and understand the different cultures.”

North American Footprint

Despite its large European market, it’s the other side of the pond where Lloyd’s really thrives. Approximately 46 percent of its business comes from the U.S., mainly California earthquake and East Coast hurricane risks, she said.

Lloyd’s also remains the No.1 excess and surplus lines insurer in the U.S. and the largest non-U.S. domiciled insurer, she added.

“We have done really well in terms of growing our E&S market share over there,” she said.

“That’s our sweet spot; those non-standard risks that are hard to place.”

By contrast, Beale said that reinsurance has become a much more competitive market with new entrants offering alternative types of reinsurance putting a squeeze on prices. As a consequence, Lloyd’s has focused more on insurance, she said.

“We have also done well in Canada and with our delegated authority through our Managing General Underwriters and Managing General Agents,” she said.

“It’s this very local and specialist distribution channel that has been our success story across North America.”

In January, Beale was made a Dame Commander of the Order of the British Empire — the female equivalent of being knighted — and is also the Association of Professional Insurance Women’s Insurance Woman of the Year for 2017.

“What concerns us most is not individual risks such as earthquakes and hurricanes, but rather assessing the aggregation of our exposures to financial and liability-type risks with no geographical boundaries.” — Inga Beale, CEO, Lloyd’s of London

As the person directing Lloyd’s, she is also acutely aware of the shift in power towards emerging economies, with McKinsey recently reporting that 67 percent of commercial insurance growth will come from those markets by 2020.

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In response, Lloyd’s has focused its efforts on Asia and Latin America, transferring more than half of its managing agents to its Shanghai and Beijing platforms; and it was recently granted final approval to open a reinsurance office in Mumbai, she said.

“That’s where the future’s going to be,” she said.

“We know that a lot of the business is no longer coming to London in the traditional way, hence we have set up a Singapore platform and platforms in China, and opened up an office in Dubai as well as in India to be closer to our clients and brokers there.”

Lloyd’s profits last year were flat at $2.7 billion, while GWP was up $3.9 billion.

The market made a profit despite taking a $2.7 billion hit for major claims — the fifth highest such total since the turn of the century — primarily due to Hurricane Matthew and the Fort McMurray Wildfire in Canada.

Although natural disasters are Lloyd’s bread and butter, its real strength is in insuring complex risks, from cargo ships and satellites to political and terrorism risks.

Lloyd’s Role in Cyber

It’s the aggregation of those harder-to-quantify risks such as cyber security that concerns Beale most. Expected to grow to $7.5 billion in global premiums business by 2020, cyber is a big focus for Lloyd’s. It has a 25 percent market share and aggregate limits of approximately $650 million per risk, she said.

“What concerns us most is not individual risks such as earthquakes and hurricanes, but rather assessing the aggregation of our exposures to financial and liability-type risks with no geographical boundaries,” she said.

“We saw that with the financial crisis and the collapse of Fanny and Freddie, and its impact on Greece, but now it’s cyber.

“We have interviewed numerous risk managers and they are telling us that they are only insured against less than 10 percent of the risks that their businesses face on a daily basis. Our challenge is to make sure that we are continuing to adapt as fast as their businesses do and that we are delivering the relevant products that they need.”

Another area where Lloyd’s has seen an uptick is political and terrorism risk, said Beale.

The U.S. standoff with North Korea, Brexit and a swath of ISIS terrorist attacks across Europe have only exacerbated the problem, heightening fears among those countries’ citizens and tearing whole communities apart.

“We would love to get to a stage where a client can track something being quoted or a claim being paid, just like you do with a package being delivered [to your home].” — Inga Beale, CEO, Lloyd’s of London

Just witness the anguish of the victims and families in the Manchester concert bombing.

“We have seen a dramatic increase in demand for these types of products because of the political instability everywhere at the moment, particularly for companies that are trading cross border with countries where governments can suddenly intervene at a moment’s notice,” she said.

“Similarly, businesses are looking to protect themselves against the ever-growing threat of terrorism, which is where Lloyd’s can step in to give them the confidence to keep on trading.”

Reforming Lloyd’s

Within Lloyd’s itself, Beale has been at the forefront of trying to modernize the aging institution. Despite its modern metallic and glass exterior, inside Lloyd’s there’s still very much what some might term a stuffy “old boys’ club” culture.

Men are required to wear a tie and women weren’t allowed into the underwriting room until 1972. Brokers still walk around with leather slipcases crammed full of paper.

The Lloyd’s headquarters on Lime Street.

Beale’s predecessor, Richard Ward, tried to modernize Lloyd’s but left plenty for Beale to address in that respect.

Beale committed $700 million over the next five years to upgrade Lloyd’s aging computer and IT systems, with the end goal of achieving one-touch data capture to speed up the premiums and claims process.

“It’s about following that data all the way through the process from the client to the intermediary and the underwriter, and the processing of the premiums and claims,” she said.

“We would love to get to a stage where a client can track something being quoted or a claim being paid, just like you do with a package being delivered [to your home].”

Another area Beale is keen to shake up is diversity within Lloyd’s itself. Currently the market is two-thirds male, while only 11 percent of the whole London insurance market are non-UK nationals — a damning statistic that Beale is all too aware of.

“The Lloyd’s market doesn’t reflect the demographics of the whole of London and we are very conscious that we’re not tapping into all of the available talent that’s out there,” she said.

“We need to cut out the old ideas, try to challenge the unconscious bias and create an environment that is welcoming for people who are a bit different.”

Beale has also been pushing the [email protected] initiative, currently in its third year, and in September Lloyd’s will host the third annual Dive In festival to promote diversity and inclusion in the insurance industry.

In addition, 95 percent of the Lloyd’s market has already signed up to its Diversity & Inclusion charter to improve diversity, she said.

“To attract the best talent we need to modernize and look at how we can change our working practices and hiring decisions for the better,” she said.

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“There’s a vast amount of work that we are actively doing to encourage people to be more open and seek more diverse talent.”

On a personal level, Beale readily admits that she was late to the leadership game, and it was only her mentor, Annette Sadolin at GE, who convinced her to take her first promotion.

That lack of confidence is something that, as a leader, Beale has witnessed in her own team and she is keen to help overcome.

“Annette became very much a mentor for me throughout my career, so whenever I have had to make key decisions I would always ask her view,” she said.

“The key lesson that I have learnt from her is that things move so quickly and you need to take opportunities when they come along that give you exposure to something new, even if they don’t seem like a natural career path at the time.

“For me, being a leader is all about inclusion and being passionate about the people you work with because you need to inspire and motivate them. But there is also nothing more rewarding than watching people progress their careers.”

A Truly Global Journey

Beale, who initially harbored ambitions of being an architect, admits that she “fell into reinsurance,” starting as a trainee international treaty reinsurance underwriter at Prudential Assurance Company in London in 1982. But once she had a taste there was no turning back.

“At the time, I didn’t even know that reinsurance existed, but once I discovered it I absolutely loved it,” she said.

“I fell in love with the global nature of the risks that came to London; one day you could be looking at a piece of business from Chile, the next from Australia.”

But, back then, working in a male-dominated industry where she was the only woman among 35 men, Beale struggled to fit in. So she quit and went travelling for 10 months.

It was during her time as a receptionist at the BBC in Sydney, Australia that Beale worked under her first female boss, a formidable woman, she said.

Inspired by her boss’s strong work ethic, Beale decided to return to the insurance business.

She soon landed a job with GE Insurance Solutions in Kansas City, where she held various underwriting management roles, before being appointed president of GE Frankona and head of continental Europe, Middle East and Africa for GE Insurance Solutions in Germany.

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After 14 years at GE, Beale moved to Switzerland with Converium as group CEO in 2006.

Two years later, she joined Zurich Insurance Group as a member of the group management board in Zurich before being appointed global chief underwriting officer, prior to her appointment as group CEO at Canopius in 2012.

The breadth and depth of her experience makes Beale a natural fit for the demands of the Lloyd’s top job.

There’s no doubt she’ll be drawing upon every ounce of that expertise and experience to keep Lloyd’s at the cutting edge of this harrowing new world we live in.

Alex Wright is a U.K.-based business journalist, who previously was deputy business editor at The Royal Gazette in Bermuda. You can reach him at [email protected]