Core Modernization in the Age of Intelligent Insurance

Speaker A: It's time for Insure talk with insurance industry tech geek and Guidewire chief evangelist Laura Drabik. In this podcast series, we don't just talk about innovative ideas in PNC insurance. We talk with industry trailblazers about the big ideas they made happen and how they did it. If you're looking for insights on the trends and technologies reshaping the industry, an all new InsureTalk starts now.

Speaker B: Welcome to InsureTalk. My name is Laura Drabik and I'm the chief evangelist at Guidewire. In this episode. In this episode, I'm joined by Aviva Canada CIO Brett Faubert, who has led several major technology transformations during his career across multiple Aviva markets. Over the past few years, Aviva Canada has reached major milestones, going live with new policy, billing and claims platforms as part of a broader effort to simplify operations and improve the customer experience. For Barrett, system modernization is always about balancing today's operational realities with the capabilities a carrier will need tomorrow. And that makes him the perfect guest for our topic today, how carriers can modernize core systems for the age of intelligent insurance. Hello, Brett. Welcome to insurtalk.

Speaker C: Hi Laura, how you doing?

Speaker B: Very good and even better now that I get to interview you, one of my favorite customers. Welcome again.

Speaker A: Thanks.

Speaker B: In an industry shaped by regulatory complexity, something you know very well located in Canada. No complexity there, right? Yeah, exactly. And rising service expectations. Carriers are increasingly modernizing core systems and prioritizing investments in data, AI and digital in this market. Brett, what can you share with listeners about the specific pressures behind Aviva Canada's modernization initiative?

Speaker C: Well, we were actually quite slow in getting off the mark. This is my second time in Aviva Canada. I've been with Aviva for a number of years, second time in Canada, and when I left in 2019, we really didn't do anything of any real significance from a, uh, modernization perspective for probably about four years. So we're now in catch up mode. I mean, sometimes being late as an advantage or being last is an advantage, but we've got the main pressure is around accelerating because the competition is definitely in front of us, but we are rapidly catching up. And the key for me is trying to navigate the complexity of the technology state that we've got today. Quite a lot of tech debt, loads of complex legacy mainframe and data platforms. But actually I think the pinch point is really the business SME resource which is absolutely foundational to a successful transformation as you're modernizing policy, admin systems, et cetera. And for me, that's really the key pinch point that we're trying to navigate at the moment.

Speaker B: So as you mentioned, this actually wasn't your first experience leading a transformation of this scale. And you previously led large modernization initiatives for Aviva in the uk and that gives you unique insight, if you will, into the factors that determine whether modernization efforts succeed or stall. So Britt, what lessons from these earlier transformations shaped your approach at Aviva Canada?

Speaker C: Well, you're right, I've been doing transformations in the UK business now for 15, 20 years. And the key, for me, the fundamental key around successful transformations is the pre planning work. So many people, organizations jump into big transformation programs without doing end to end planning and spending time really understanding the current state and future and mapping that, uh, and how you get there. And it's so essential because it saves you so much time further down the road. And actually at that point when you're deep into them, the cost on a monthly basis is very expensive. So doing that upfront saves you a lot more time and a lot more money. The other big lesson learned for me is all about execution. People think this is easy and if you look at big transformation programs, most are late, some fail, most cost more money. And for me, it's all about the execution cadence. And when I get into that, you know, we break down the silos, we operate as one team, always say that we're in the trenches. That's our partners, our business teams, ah, our technology teams. And I, uh, create this 24 hour rule, you know, where someone's struggling to get a way forward or make a decision. After 24 hours, go and get someone else that can help you. And 24 hours after that, if you still haven't got the answer, escalate it. And we don't look upon that, uh, as a difficult thing. We welcome that in terms of being able to keep the momentum in the pace up. And that feeds into kind of honest reporting. People feel as if it's safe to have an environment where they can call things out and then get the exec and operational sponsors hands on and then the work because they are the ones that are taking on these escalations. And then you've got the foundational kind of landing strip where these transformation programs really where the rubber really hits the road. And that's around change management. Because how this change lands within the business for your broker, for your customers, etc is really the key to success. And that's where you get your benefit realization. So spending a ton of time on change management, which predominantly is really all business Owned as really the kind of foundational elements and lessons learned that I take forward now in Aviva, Canada.

Speaker B: I really appreciate your, uh, 24 hour rule. Brett, if you don't mind me asking, how do you create a safe environment so people feel okay escalating beyond the current person that they're working with?

Speaker C: If you remove the fear of failure and by doing so create an environment where people know it's okay to call something out. Particularly when you've got multiple agile pods or agile teams working together. There's always dependencies across each one of them and it's not really about finger pointing, it's just about getting the right outcome. So I'll walk into the scrum of scrums every day myself and the OP and the exec sponsors attend the monthly demos. We're always in the steering committees. So there's ways in which you can make sure that people feel comfortable around you and comfortable talking about issues and challenges they're facing. So we really spend time trying to make sure that that, uh, environment's a healthy one for people to operate in.

Speaker B: Um, yeah, makes sense. Focusing on the outcomes. Well put. So when carriers talk about core modernization, the conversation often centers around technology. But the real goal isn't just to update systems. It's to improve the quality and speed of decisions and other business imperatives. And at uh, Aviva Canada, that meant transformation across policy and billing all over the past year and then claims. So Brett, what were the strategic imperatives driving Aviva's claims transformation and what results have surprised you the most?

Speaker C: Good question. I'm kind of laughing because we actually went live just as I was arriving in Canada in 2015. We went live in late 2014 with version 7 of claim center. And um, we actually really haven't touched it since, other than customize it. I must say we did a good job of that. Uh, and for me the real imperative was to get off that kind of legacy nature that we have, you know, hosted in our data, uh, center, heavily customized and uh, allows us to move to an environment which is cloud enabled. You've got the Guidewire ecosystem that you can get access to the capabilities and opportunities to partner with some of these vanguards and some of those partners in that ecosystem just accelerate everything that you can offer your customers and your brokers. And the agility when you move to cloud is way faster than what we experience when we're on prem. So and it removes all the management overhead. You know, we don't have to look after that, we don't have to love and care for it in our data center. We don't have to patch it as a whole ton of kind of BAU stuff that you can just forget about because you don't have to worry about and focus more on the value that you're going to offer your customers and your brokers. So the imperative is quite easy. You know, we just have to move to modern tech and actually the benefit that you get, your eyes are wide open now in terms of the opportunities that that provides us. And the feedback from our claim staff has been amazing from coast to coast. They've been absolutely amazed at, uh, the improved speed, the ease of the implementation, the fact that we did a lot on the change management point that I talked to you about in terms of really explaining to people we're going to take away some of these customizations, but this is what we're going to replace it with because they're now available out of the box. Yeah, they may look and feel a little bit different, but this is why we want to do it and make sure people really understood the value of the move. And it's been fantastic. I must say it's probably been one of the best transformation initiatives that I've been involved in in my entire career.

Speaker B: First of all, thank you. You were so incredibly generous in helping us to do recently a role observation on your people using policy claims and billing in cloud. I couldn't agree more with you. The team that I brought out to Toronto commented on how exuberant your people were, how excited they were to use the system. And one of the things that I think almost every single one of them called out, uh, that you hit on is the improved performance. And then of course there were improved business capabilities, but the performance came out every single time. They were so excited to be able to use this better, quicker system because

Speaker C: we starved people for so many years on not doing any real change or transformation. Now we're doing it. They're absolutely loving it. So maybe that's a hint for everyone else. You know, the way to get your people engaged is not give them anything for a few years. But. I'm joking, but I think, you know, everyone is really up for the challenge and up for the opportunities that it's providing. Us and the team have now got a really healthy roadmap around how we further develop the experiences and the opportunities that this brings us and our customers and our brokers.

Speaker B: Yeah, as a former change management consultant, I don't think that is one of our change management principles. Starve and then give. But you know, maybe we should add it. Such great insights. When we come back after this break, we'll continue our discussion with Aviva, uh, Canada CIO Brett Faubert on how carriers balance today's operational realities with the capabilities they'll need tomorrow.

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Speaker B: welcome back to insuretalk. This is Laura Drabik and I'm talking with Brett Faubert, CIO of Aviva Canada, about modernizing the core for today's operational realities and the capabilities carriers will need tomorrow. Claims are often where carriers feel the greatest pressure to evolve, and it's for obvious reasons. Customers want faster resolution, carriers want higher efficiency. And to that end, claims organizations are increasingly data driven, with carriers harnessing predictive models in order to flag high severity claims to support decisions earlier in the cycle. And according to a recent report from PwC, this kind of claims intelligence ranks as one of four top opportunities and urgencies for carriers. Brett, how has your transformation helped shift from reactive claims processing to proactive decision that improves outcomes?

Speaker C: I mean, that's a really good question and it ties back to the imperatives because actually that's fundamentally what we wanted to try and achieve. Our, uh, claims transformation is really centered on using guidewire to move from reactive processing to proactive decision making. And there's a bunch of tools and capabilities that we've got access to now that allows us to do that. But the key goal is, you know, getting the right information to the right adjuster at the right time, just so that claim keeps moving and the customer feels engaged or the broker feels engaged. There's nothing worse than, you know, miscommunication, delays, et cetera, at, uh, a point where customers are on their knees really wanting support. So, ah, that is a real fundamental imperative in terms of what we were trying to do and kind of in an environment where claims expertise and tenure are, uh, declining, enabling platform capabilities and intelligence to inform decision making for our claims handlers is absolutely critical. And then naturally you get customer expectations are growing, right? Particularly through digital experiences, et cetera. So the kind of smoother that experience is, the faster that experiences and the more transparent it is really, because people tend to feel as if I'm going to make a claim, they're going to find out a way not to Pay, that's never our intention. You know, we'll always pay 100% of honest claims. You know, everyone's a winner there. We know we are better off as uh, an organization. The broker or the partner's better off and ultimately the customer is too.

Speaker B: You mentioned something really important, which is generational turnover. So let's just follow that point a little deeper. Speaking from experience and also traditionally, adjusters, underwriters, csr, they learn the business typically by sitting alongside seasoned experts, absorbing knowledge and judgment, nuancing over time. Again, I know this firsthand because I started my career as an adjuster many, many decades ago. But that model is not sustainable. Nearly half of the industry's most seasoned professionals will retire within the next decade and they're taking years of experience with them out the door. Aviva Canada deployed Pro Navigator by Guidewire, a generative AI based knowledge management solution captures institutional intelligence and surfaces guidance in the moment. And this can enhance decision accuracy, consistency and velocity. But Brett, what other measures should carriers have in place?

Speaker C: Oh, uh, great question. It has become an real issue. The key for me is using really embedded tools in AI to help complement that gap. Uh, so almost moving from like tenure based experience to system enabled experience. Probably the best way to describe it, so you don't have to rely on that kind of long tenured employee that everyone goes to when they've got that uh, edge case or that unique claim that they experience once a year or something. So embedding that expertise into the tools and workflows is essential. And uh, you talked about Pro Navigator there. We have deployed that and whilst it's only early stages, the opportunity there is great. The future is very bright, particularly around this issue in terms of expertise. But there's some other things that I think we should do as well. You know, my kids for example, molder two that 18 and 20, you know, they expect kind of fast natural language access to information and answers. You know, they've now got their monthly subscriptions to ChatGPT and they use that all the time now. My kid was saying, oh, just chat it. And I was saying, what do you mean? She went GPT it. Uh, that's what we all use. So you know, you need to think about how you can use that within your organization. How can you give the claims handler the right information, but the access to that information that they would normally use, so it's not abnormal to them. And then the other thing that we're doing here is when you've got these people with that uh, deep expertise, you know, Been around the block a few times, really no claims. Inside out is to really capture that institutional knowledge before it leaves. So we are using Copilot at the moment with all these seasoned handlers with these kind of edge cases that they handle now and again to document all of that information that we'll embed into Pool Navigator so it's accessible to everyone. So we are trying to suck out the brain, all that information and make that knowledge usable, searchable, operationalized before it's too late.

Speaker B: Makes sense. And by the way, my 13 year old also uses the same phrase, just GPT it mom, we're as cool as a Gen Z er, so good for us.

Speaker C: Yeah, I know.

Speaker B: Exactly. So as risks become more and more complex, carriers are increasingly collaborating with insurtechs. And you know what Brett, thank you so much for calling out uh, our insurtech Vanguards earlier. That's Guidewire's incubator program and we ment Pro Navigator through it and also partnering with analytics partners to strengthen and innovate underwriting claims and risk prevention capabilities. So I know that you're very interested in leveraging ecosystems of IoT telematics and AI analytics solutions to enable new forms of usage based and on demand insurance coverage. But as Aviva and other carriers build out technology ecosystems in this market, how do you decide which are the capabilities to pursue?

Speaker C: That's a good question. I mean we obviously will pull business case everything before we get going but interestingly we just did our monthly investments to your call and um, we've now had more intake Items submitted in Q1 than we did for the entire of last year. So you've definitely got now a growing appetite for people that seeing stuff and opportunities that we should think about investing in. So you know, that's great because you're getting that wave of excitement and momentum m across the organization. But for me the Guidewire Vanguard is, you know, as you mentioned, is really a great ecosystem that allows us to see the future opportunities through technology. When you get into that ecosystem with Guidewire, which is we're now into the cloud enabled solution that we have, it allows you really to partner um, much more efficiently. You know, data standardized, most of these analytics are embedded directly into the core policy, billing and claims workflows and we really look for opportunities that can drive value to our people, to our brokers, to our customers and we'll go through a normal kind of business casing process on that. Uh, it's interesting because our UK business had built claim summarization probably now about 18 months, maybe even two years ago. So it takes the phone number and pre populates the claim for the customer and then summarizes everything that's happened over the kind of recent history and tells them about next best action. And now we can get that access in Guidewire. So that start for me is a great way of using that data and analytics within the core capability that we're invested in, our strategic platform to drive a better experience for our people and our customers. And you mentioned telematics as well. I'm a real fan of that. We've had that going for a number of years both here and in the uk and it's a real game changer. You know, as I mentioned, we've got the two of the children are now driving and they're penalized so heavily because of the high risk that they are. But until you get those analytics to prove otherwise, you know that they are safe drivers, they're not on the road beyond midnight, you know, they don't break harshly at junctions and you know, they're not excessively speeding then actually you can rate them according to the driving history and that analytics analytical information we never had before. So everyone was tarred with the same brush. So you know, it's really good that actually uh, you can use them to drive real value to customers that we can rate them according to their behavior. So you know, I'm a huge fan of this overall.

Speaker B: Excellent. Thanks, Brett. On the other side of this break, we'll continue the conversation. So don't touch that dial loving Insure

Speaker A: talk with Laura Drabik. For more expert insights and inspiration, subscribe to Laura's email newsletter@drabic digest.com your one stop resource for Laura's latest blog posts, videos, podcasts, articles and more. That's www.drabic digest.com. now let's get back to the show

Speaker B: and welcome back. This is Insure Talk with Laura Drabik and we're talking about core system modernization in the age of intelligent insurance with Brett Faubert, Chief information officer at A.H. aviva, Canada. Rising customer expectations and demand for innovative products tailored to evolving risks are prompting carriers to rethink the way they support brokers. As a board member of the center for Study of Insurance Operations, also known as csio, you're involved with advancing API standards that streamline digital quoting and workflow integration between brokers and the carriers. Brett, paint a picture for listeners. Why is Broker Empower Environment so important for this evolving market?

Speaker C: I mean it's a really important board that allows us to standardize data exchange essentially across brokers and insurance firms. I mean Canada remains a heavily, um, intermediated market. It's not like the uk which is predominantly direct. Even up to small commercial is all direct as well. But on the personal insurance side for auto and property, you know, you buy that when you're in the coffee queue for Starbucks. It's so straightforward here in Canada is so heavily regulated. You've got provincial regulations as we all know. And actually the price is very expensive compared to the UK and people don't really want to go ahead with something that they don't quite understand that's quite expensive without, uh, some advice. So the broker plays a huge part in supporting the customer through that purchase and can provide that uh, advice and support to them throughout the life cycle of their insurance history. So that speed and ease for connectivity, the standardization of that data exchange is really essential to keep the acquisition cost down. Brokers don't want to have 20 people in their brokerage that are re keying information and fixing data mismatches. So CSIO was really set up to bridge that gap and to standardize a lot of that. And you know, brokers are a key part of the ecosystem. So driving, you know, ways in which we can make that experience easier for them just helps everyone in the long run. And then the kind of key thing for me there is that this is kind of table stakes. You know, a standard API and data format isn't a differentiator between insurance organizations. It's how you use the data that drives the value. So we all came together a number of years ago to solve that problem and we've had really good success as a Canadian insurance market off the back of that.

Speaker B: Great. And an excellent example of, you know, the whole purpose of insurance, which is banding together and supporting community. And as you said, this is table stakes. So just all get it done and you all help each other. It's what you do with the data after that. It's a really good point, Brett. Many carriers, they're still early in their modernization journey. While you've led successful large scale transformation on two continents, Brett, what advice would you give other carrier CIOs trying to balance today's operational imperatives with an eye toward the capabilities that they're going to need tomorrow?

Speaker C: Yeah, I mean it's a difficult conundrum. The thing I would say is you need to take the bold action, don't shy away from the tough stuff because really that's a game changer for your firm. But you know, you need to make sure that you've got sufficient scars in your back of being through this. Because transformation is never easy. They come with big price tags. So making sure you spend your money wisely is also important. But having that end to end business capability is essential. And uh, you need to go and fix that, uh, before you start. If you don't have the appropriate SMEs within the business team or the tech team resources or the right partner, you need to go and fix them before you start. The other thing is making sure those partnerships are really strong and healthy because as I mentioned, at the very start you'll be in the trenches together. Sometimes those days, uh, are not joyful. You know, they're long, they're hard, they're pretty painful. And having those relationships are really for a foundation to the success in the long term program. But uh, for me, execution is everything. So back to those kind of principles that I mentioned. Having that healthy drumbeat, making sure you've got the model that you can empower that decision making back to that 24 hour rule. But as operational and executive sponsors, being there for escalations and support and being visible is absolutely essential. But you just need to take those bold decisions and be brave. Otherwise you'll never quite get there.

Speaker B: Brett, thank you so much for your time today and for your incredible insights. You've shown us, uh, that success in P and innovation isn't just about ideas, it's about making ideas happen.

Speaker C: Thanks Laura. Appreciate you having me.

Speaker A: Tune in next time for an all new episode of Insure talk with Laura Dravik brought to you by Guidewire, the platform PNC insurers trust to engage, innovate and grow efficiently. For more information, visit guidewire.com.