You are Aviva’s first CDO. How fast do you think the insurance industry is embracing digital?
The industry is now starting to embrace digital, but not fast enough. Digital is completely reinventing the volume, variety and what we can do with data. What the insurance industry sells is not priced the same for everyone; it depends on the risk that a person, family or asset faces. In today’s data-driven world, we have the ability to access about 500,000 data points on average for any particular person or situation. Our ambition is to never have to ask you a question again.
We should be smart enough to know about you through data, and we should give you the right product and quote. For example, with consent we can access social media profiles. Two people who may look the same from an insurance point of view begin to look different because of their behaviors. The more insight we have into people, the more people tend to look different.
An extreme version is DNA testing, which reveals a lot about individual propensity to suffer from certain diseases. Insurance is not going to disappear, simply because we cannot foretell the future accurately—but we will see a significantly increased variance in risk between people. Our approach is to work with government regulators to take the lead on this.
Are you excited about the opportunities digital disruption is bringing?
We are. Our industry is very connected with major social questions. For example, in the UK people are massively underprepared financially for their later years. The largest part of our business is savings, investments and pensions. A chunk of our digital journey is using techniques of engagement, gamification, and education to inspire, advise and nudge people into different behaviors.
An example on our website is called Shape My Future. This is a simple, gamified tool to help you envision the lifestyle you would like to have when you are older. We ask what kind of home you want to live in, what holidays you will take. This is not a sales tool, it is an engagement tool, to start the process of tugging people’s heads out of the sand. Eventually that process ends up with them taking decisions about savings, investment and retirement planning.
When is the market going to stop being so fragmented?
This has been a very fragmented industry. Most insurance companies don’t provide for all areas, and most countries have different regulators. We are doing the opposite: we are bringing it all together. On your Aviva account you can see everything. You change your policy, add things, take them away.
We prompt you with things we might think are relevant and price them beforehand. We are also working on creating single integrated products. Historically, this is not an industry that rewards loyalty—in fact, quite the opposite. Our approach is to give existing Aviva customers pricing that is at least equivalent to someone new to Aviva. All in one place, integrated, a single policy.
How do you think insurers will respond to the rise of the connected home and connected cars/autonomous driving?
We know autonomous vehicles are coming, and faster than most people believe. Even early-stage semi-autonomous vehicles, or assisted driving technologies, such as adaptive cruise control, automated safety braking, have an impact of driving safety. There are fewer claims, and that needs to be reflected in insurance pricing. We also believe connected home technology is relevant to consumers. In a company called Cocoon, we have a beautiful home video camera that listens. It uses sub-sound technology and machine learning to figure out what sounds are normal or abnormal for your home. It alerts you to an abnormal sound. It might be the clink of a broken window when a burglar breaks in. We have an investment in another business, which is basically bundling connected home into your home insurance package.
What do you think will be the future role of Robo Advice?
Digital can be good in terms of helping consumers understand what their risk appetite is, which is fundamental to helping them make good financial choices. Data size is really powerful in terms of constructing investment portfolios and auto-balancing them and so on.
CEO Mark Wilson wants Aviva to become a fintech company. What is your role in enabling this?
We have built an amazing team, both from existing Aviva colleagues and a huge amount of external hiring. We have people from the gaming industry, data scientists, digital marketing, digital CIOs. We have brought in people who have accomplished the digital revolution in other industries.
They have come because this is an industry that matters to society and that has not been reinvented. How exciting is that? We have Garages springing up all over the place: Singapore, Toronto, Norwich, York, Bristol. The Garage is not a skunkworks place, it’s not a dream factory. It’s a place where we create digital business. We have over a million customers, and today’s customers are digital; insurance is not
