Claims: A Leader’s Perspective – Graham Gibson, Allianz Insurance (Part 2)
The Claims sector continues to evolve and adapt in the ever-changing Insurance landscape.
I have recently interviewed a number of Claims Directors from Leading Insurance Companies, together with the leaders of several Claims Management and Supply Chain organisations, to discuss their views on various topics impacting the claims market today and potentially in the future.
Following on from Part 1, Today’s interview is with Graham Gibson – Chief Claims Officer – Allianz Insurance plc
- Graham joined Allianz as Director, Claims in June 2008.
- Prior to this he held a number of senior management positions in the industry, including Director of Claims for Groupama.
- Graham represents Allianz in a number of market initiatives. Currently, he is an Allianz Pensions Trustee, a director of the IFB and the Chairman of Thatcham.
- Graham is a regular speaker at industry seminars and a contributor to trade press articles.
Q16. What impact will technology have on how claims are handled in the future?
From a motor perspective, we are starting to see technology coming into the market now which is game-changing, and if you look forward to 2040-2050, the number of accidents will reduce significantly. So, we are becoming much safer, and that does have an impact on our product. Certainly in the vehicle space at the moment you’re effectively underwriting the individual and then the vehicle. Going forward, the vehicles will have much more influence, because actually the driver will be driving less and less, and it will be much more about the technology on the vehicle. So, the underwriting models will change from individual-led to vehicle-led.
The other thing is vehicles driving in autonomous mode: will see more of an impact on product liability claims, rather than motor claims as we understand them today. With some of the technology that’s coming down the track now you can buy vehicles today that we don’t necessarily understand how to repair, and that’s not about the insurance industry – that’s about the vehicle manufacturers. There’s a race going on at the moment to see who can get the next gizmo to market, and there’s stuff coming to market with question marks as to whether it’s been properly thought through, and whether it is, in fact, repairable. So the technology impact is good and bad all at the same time.
Q17. How far away do you feel we are in terms of pushing to the next level in automated and electric cars?
Up until now vehicles have not actually changed that much. When Messrs Mercedes and Benz nailed together the first car – a chassis-based product with an internal combustion engine, four wheels and a steering wheel I don’t think anyone thought that basic concept would last 125 years. Yes the technology has improved, yes the cars are more fuel-efficient and all that, but really not much has changed until now. The vehicles coming to market don’t really have a chassis as we would understand it. Now they have sealed electrical units which make them potentially more difficult to repair. It also means that what you might describe as a fairly minor accident might actually cause a lot of damage to the vehicles.
Take the new Audi E-Tron, which is referred to as a chocolate bar platform. Imagine a bar of chocolate where each lump of chocolate represents a battery – that’s the base of the vehicle, and you make that longer or shorter depending on what you want to stick on top, but from the manufacturer’s perspective, it’s one platform rather than many, so it’s cheaper to manufacture and easier to manufacture, but harder to repair. This vehicle also comes with much of the technology fitted but not activated – so what do you fix, or not, following an accident?
Q18. Are you starting to see this coming into the market now, in terms of the new types of cars?
Vehicle 2.0 is starting to arrive and it’s exciting and a little scary all at the same time. As the Chairman of Thatcham, I feel really privileged to be involved in such an amazing organization at what in clearly an inflection point in terms of the motor car as we know it.
I’ll use vehicles as an example, but you can take this across anything you like: over the next 15 to 20 years the market as we understand it today will change 100 percent and what we will need to do for our customers will change with that
Q19. How are Allianz utilizing latest data technology to improving efficiencies?
I never thought I’d hear myself saying this, but within our claims network we are employing data scientists so that they can help us understand some of these challenges, predict what’s next, and help us prepare for the future. Wind the clock back five years and I would say that our graduate scheme was almost entirely based around lawyers, surveyors, and engineers, as that was the expertise you were looking to get. We’re still looking for that type of person, but we’ve added data-scientists or statisticians, or anything in the data space, to that list. Digital and AI capabilities are coming into the business now and we are openly talking about how we ‘datafy’ our people – quite a change in a relatively short period.
SUPPLY CHAIN PARTNERS
Q20. What are the key decision-making factors when looking at a new supply chain partner?
We have two types of suppliers, and we’re very deliberate about this. Our strategic supply chain comprises of companies that we are committed to work with for a long time and improve the relationships, to work on things like getting rid of frictional cost, exploring new technology together, that type of thing. Our vehicle repairers, our lawyers, and our loss adjusters are in that space. Then we have suppliers from whom we buy goods and services and in that space we believe we need to be more flexible.
We’re already thinking about the digital age we’re moving to, and the risk that we might not touch our customers as much as we do today. Today, if someone has a claim, they will phone the contact centre to report the claim and have a conversation with the handler. Going forward it’s highly likely that they’ll do all that on an app, or via some sort of portal, so the first person that our customers actually touch is one of our suppliers. Again, if you think of a loss adjuster or a repairer, the first human interaction will be with the repairer and not with us. We need our supply team to be very geared up for that, and very much representing Allianz and our brand.
Q21. How do you decide who you want to a long-term partnership with?
That depends on what supply we think we’ll need continuously. Although the methodology and some of the underlying technologies might change, ultimately, we’ll still need that supply – that’s why we’ve chosen to partner with repairers, loss adjusters and lawyers – we think fundamentally we’ll need them for a very long time.
Q22. Are there any key technology initiatives out there that you’re involved with, or things which potentially would interest you?
In any space, we normally see three, four, five, maybe half-a-dozen start-ups, and our thought process is: of those, maybe two or three will survive. So the important thing for us is making sure we’re backing the right horse, which sounds a bit callous but that’s the world we’re in. I think there are lots of people out there with fantastic ideas, and lots of really interesting things that we’re looking at, but at the end of the day it’s about how much space there will be in a chosen market.
Q23. Does Allianz invest in or do joint ventures with technology partners?
We do at group level. It’s not company-specific, but we have Allianz X, which looks at business models and InsureTech opportunities and well as digital and data. InsureTech will look at different business models that we can explore and learn from. It’s almost back to what I was saying earlier: a company like Allianz is fortunate to be able to explore that in a very different way to others. Its public knowledge that Allianz X has a billion Euros available for investment, and that lets Allianz consider a multiplicity of options.
Q24. Are there any particular technology solutions that would interest you most?
We’re looking at things all the time, from automation to AI solutions. We realise that just because we’re Allianz and we’re a big organisation, that doesn’t really cut it anymore, so we’re taking action and making changes in claims. We’ve got a claims product and propositions team. It’s not a huge team, but again, if I wind the clock back five years, we didn’t have that team looking at products, looking at propositions, looking at opportunities, and we’ve now got people who do that as their full-time role all from a claims perspective. Unsurprisingly, they work very closely with IT and the data team together with the distribution teams, trying to formulate claims propositions that suit the ever-evolving market.
BREXIT – WHAT IMPACT
Q25. What impact do you think Brexit is going to have on claims?
I’m sure others have said it but, depending on how Brexit unfolds, it could be no impact at all or it could be quite damaging for the industry and, more importantly, for our customers. If you’re driving any sort of foreign vehicle, as most people do, and there’s the hardest of hard Brexits, I can foresee things being incredibly difficult. And it’s not just motor vehicles: for example, if you’ve got an Italian bathroom and it’s damaged, then you could be in trouble because we might not be able to replace it.
Q26. Why would you be in trouble do you think?
Just because if it’s a very, very hard Brexit I suspect that spare parts for vehicles for example are going to be quite far down the list of priorities and food and medicine will come first and that’s where I think it could be quite difficult. But that’s a hard, no-deal scenario, and hopefully we won’t find ourselves there. In terms of regulation and compliance, I just think that’s part of the world that we now live in. I know people complain about it sometimes – I just see it as the cost of doing business.
CHANGING REGULATORY LANDSCAPE – WHAT IMPACT
Q27. What impact do you think Regulatory Changes will have?
I think the next round of changes in personal injury – and we’ll have to see how they bed in – will hopefully do the trick and we’ll finally get to a place without the levels of fraud that we’ve seen historically… but we’ll see. The regulation landscape has clearly changed from a place where it was quite soft in the UK, to a place where it’s now actually quite robust, so that’s definitely changed significantly, but as long as we do the right thing for our customers then I don’t see this as a problem.
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For part 1 of this blog, please click here. Look out for more blogs coming soon!
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