In a rapidly changing insurance industry, we face the challenge of combining tradition and innovation. The industry, known for its stability and careful risk management, has been undergoing a transformation in recent years, opening up to the latest technologies, often pioneering the use of modern solutions. We look at this topic with Jakub Jakóbczyk, an IT specialist, and Anna Wawrzykowska, a Business Architect from Sollers Consulting, a consultancy and software integrator specialising in the insurance industry.
Why is the perspective that insurance is boring not entirely true?
AW: There is no room for boredom in insurance! To those outside the industry, it may seem that insurance is a standard financial product, sold by boring gentlemen in suits, where everything is planned and all you need to do is follow processes. Nothing could be further from the truth. This is a very dynamic industry where a lot is happening, and a lot is changing.
For example: in my current project, suddenly, overnight, we had a significant number of claims experts from the client’s side (the insurance company) disappear because a storm had passed through the country, and they had to shift all their efforts to helping the injured. The project was lower on the priority list at this point, and, without any prior preparation, we had to quickly figure out how to ensure that the work would continue in the absence of the experts. In the end, we drew on the knowledge and experience of the people in our company, and relied on ‘best assumptions’, i.e. doing things the way we think they would be done well – and will correct and make necessary changes in the future if necessary.
JJ: From my perspective, the answer is also ‘absolutely not’. The insurance industry is active in the digital sphere and has undergone a huge transformation. At the same time, we cannot refresh old systems indefinitely but create new ones adapted to the present and, as far as possible, anticipate the future.
There is also a lot of competition in the market, which forces organisations to constantly evolve. Companies operating in the market are no longer just the insurers that have been around for years – new start-ups are springing up every now and then, trying to grab the biggest slice of the pie in this difficult market.
How to ensure effective communication and understanding between technical and non-technical people?
AW: For me, the key is to be patient, but also to openly admit if we don’t understand what is being said to us. I remember talking to a programmer at the beginning of my IT adventure and being puzzled as to how it was possible that he was speaking to me in Polish and I didn’t understand anything. I kept asking until I understood what he was talking about.
I always try to remember to adapt the language to the recipient – and if I am talking to people outside the IT or insurance industry, I imagine how I would have presented the issue to my mother, who is a nurse. The reception of the words would definitely be different: “I am in the business of implementing complex IT systems for the insurance industry” from “Suppose you have an insurance policy with insurance company X. This company has to store somewhere the information about what policies it has sold, to what customers, under what conditions, and so on. And that’s where I help these companies create a place where they can securely store this kind of data.”
JJ: First, as an IT person, I must be open to learning to understand the business process. To this end, I often ask people from the business, such as Anna to explain nuances. A better understanding gives me more room for manoeuvre and the ability to make the right decision, taking into account more scenarios.
Like Annia, I always try to choose my words appropriately for my audience, including different businesspeople – I won’t talk to everyone in the same way. I will describe the limitations in the system differently to an analyst in my team, and I will tell the same story to a claims expert.
Kuba, can we talk about skills specific to the insurance industry? For example, does a programmer working in this sector need to have different skills from other industries?
JJ: I think every industry requires similar skills from developers – apart from, of course, the hard skills, you need to understand what you are actually implementing.
What I think sets the industry apart is that our products are often very complex, and on top of that they change quickly, adapting to the market. It’s certainly important to be able to write code that doesn’t need to be rewritten from scratch when new requirements come along, but to use existing solutions. I also need to think critically and constantly ask myself: what will I do if I have to change X in six months’ time? This can be more difficult as different areas of life are covered by insurance, often completely remote. Because how do you find the common part between the loss adjustment process of professional indemnity insurance and home building insurance?
What do you need to consider when designing IT solutions strictly for the insurance sector?
AW: First, insurers operate in a rapidly changing environment. When designing a solution today, it is likely to go into production (i.e. start being used by the customer) in a few months or even a year. Therefore, the solutions provided must be flexible to allow the client to adapt as quickly as possible to changing market needs.
JJ: Exactly so, when creating IT solutions, you must consider that the product you are implementing may change its structure in six months. Of course, it is impossible to predict everything, but it is good to take some time to assess what might change and how the solution can be adapted to new requirements.
On a day-to-day basis, our consultancy involves providing substantive support – we are ready to provide the client with knowledge of new technologies and automation, which is currently being developed very intensively in the insurance industry.
Is it easy to convince insurance companies to use the latest technology?
AW: Nowadays, insurers are more aware that if they don’t take advantage of new technologies, they will be left behind and fall out of the market. Because we at Sollers work in many countries with different clients, we have a good overview of the situation and know what opportunities the market offers.
I was recently very interested in one solution that estimates the risk of extortion based on the digital footprint of the victim! Based on the victim’s data entered (name, address, PESEL, etc.), the tool searches the internet for publicly available data on that person, such as contact details, social media activity, data from shopping sites, vehicles owned, court history, but also activity on the dark web. Based on the retrieved information, the tool calculates a ‘score’ for this person and states with what degree of certainty this score has been calculated, as well as suggesting further steps – whether the liquidator should undertake further investigation or whether the victim does not arouse suspicion and the payment of compensation can be proceeded with.
What are the advantages of working in such a diverse environment, especially in the context of the specificities of different insurance markets?
AW: I remember of one thing that very much surprised me at the initial stage of our project in Sweden. The client required people with a so-called ‘protected identity’ in the system. We started to explore the topic and it turned out that this was a specific case of people whose data is not publicly available. “But what do you mean, it is by definition that the data of other people is publicly available? What about RODO!”. Well, and it turns out that in Sweden personal data, such as name, address, is publicly available and every citizen has access to it. In fact, for a fee, we can even legally see their salaries. And the few exemptions from public disclosure of personal data apply to royalty, celebrities or crown witnesses.
Based on your years of experience, do you notice differences in attitudes to insurance from country to country? How do Poles and the rest of Europe insure themselves?
AW: Unfortunately, in Poland, we are still characterised by a rather low insurance awareness and most of us only have third-party liability insurance, which is compulsory for every car owner. The pandemic has also played its part, which has increased interest in travel insurance, particularly in the event of trip cancellation. Nevertheless, our insurance awareness is rather low. In the West, things are different, with societies turning more often to optional insurance – such as home or liability insurance.
In Poland, price is still the key factor when deciding to buy an insurance policy. Further down the line, Poles pay attention to whether the insurance coverage is in line with their needs, as well as previous positive experiences in dealing with the insurer. For Germans, on the other hand, the scope of the insurance and previous positive experiences are decisive, with price coming only third.
It is also interesting to note the differences between countries regarding preferred insurance sales channels – in the UK, 45% of customers use comparison websites when buying, while in Poland it is only 19%. Poles prefer to buy insurance from multi-agencies, while Germans and French contact their agent. For about 16% of Poles and English people, it is important to be able to handle their policy (make changes, check the payment schedule, etc.) online, while for Germans and French this percentage is twice as high.
More and more companies are using artificial intelligence to streamline operations. Are you seeing clients in the insurance industry also starting to implement AI-based solutions? Is it too conservative a sector for the application of AI?
JJ: The insurance industry processes huge amounts of data. Naturally, this creates ideal conditions for the implementation of AI tools. However, this is not an infatuation with novelty, but more of a cold calculation, so the application of AI is very specialised – directed more towards supporting already existing processes than creating new ones. I do not think we will soon see, for example, the mass use of insurance products created entirely by AI, but, for example, the automatic valuation of damages based on recorded videos or photos – yes, we will.
AW: While the insurance industry can approach some new developments with a great deal of caution (such as moving its IT systems to the cloud), I see no such reserve with the use of artificial intelligence. For example, six months ago Swiss insurer Helvetia launched an assistant called Clara, based on GPT chat with OpenAI, to answer customers’ questions about insurance and pensions. The tool is publicly available (in English), and I encourage you to test it out and form your own opinion.
However, let us not forget the risks involved in the productive use of artificial intelligence. These risks have already been recognised by the European Union and have resulted in the European Parliament issuing a relevant regulation. This is an attempt to strike a golden mean between the possibility of reaping socio-economic benefits from the use of AI and mitigating the risks and limiting the adverse consequences felt by individuals. Thus, before AI enters the insurance industry for good, industry standards related to its responsible use will need to be developed.
Anna Wawrzykowska – business architect at Sollers Consulting.
After working in finance for almost 10 years in multinational corporations in the insurance industry, she decided to embark on an adventure in IT. She implemented insurance systems and advised clients on process optimisation in Germany, the UK, Poland and Sweden. She is passionate about travelling and tasting local cuisine. In her free time, she enjoys playing sports or taking a nap in the kitchen, where she realises herself by preparing Asian dishes.
Jakub Jakóbczyk – IT Specialist at Sollers Consulting.
A programmer by profession and passion. He has implemented, integrated and audited insurance systems in Poland, Denmark, France, the UK and Sweden.In his free time, he enjoys water sports and walking his dog.