Episode Forty-Seven: Putting Data At The Heart Of Insurance

Challenging The Status Quo In Insurance

Diversity of experience has always helped me move forward, so don't be afraid if you're trying to move from one place to another.
 

We’re joined in this episode by Akhil Lalwani, Chief Data Officer (CDO) at Convex Insurance who discusses the introduction of the CDO role in insurance and how his experience in technology has equipped him for addressing the industry’s move to more digital interaction. Akhil also talks about challenging the status-quo and the role that diversity of thought plays in shaping the future of the insurance sector.

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The Power of Data Podcast

Episode 47: Putting Data At The Heart Of Insurance

Guest: Akhil Lalwani, Chief Data Officer at Convex
Interviewer: Sam Tidswell-Norrish, International CMO, Dun & Bradstreet

Sam 00:00
Welcome back to The Power of Data Podcast, and I have the huge pleasure and privilege of today being joined by Akhil Lalwani, who's Chief Data Officer at Convex. Welcome Akhil.

Akhil 00:10
Hi, Sam, thank you for having me on the show and letting me share a bit of my experience.

Sam 00:14
We've been looking forward to this one for a few reasons. We've been spending a lot of time at D&B thinking over the last 12 months really about the digital inflection that insurance has been going through, particularly sped up by COVID-19. But really, you've not been in insurance for all that long. And it seems you might have just timed the move to Convex perfectly. Can you tell our listeners a little bit about your career and what led you to where you are today?

Akhil 00:40
I've been here four months now, it seems a lot longer than that, but yes. So I joined convex in the mid of May through the whole Covid situation, which is quite interesting. I started my career in Telecom, so spent quite a few years with British Telecom then moved into banking, spent six years there. I did an interesting stint through Barclays with a consortium of banks and law enforcement agencies where we use the power of data and technology to disrupt criminal activities, which was quite fascinating. And then I spent a couple of years at Prudential PLC, which was my foray into insurance. Being the head of their security data platforms and the security architecture, quite an interesting journey to take an old insurance company onto the cloud and into the world of digital. And then I went back to doing what I enjoyed the most, using data and technology to drive growth, revenue and customer satisfaction. I got the opportunity to actually drive the digital agenda for Prudential, kind of do my part in their journey of establishing data led ecosystems for health and wealth management, which was fascinating and now I'm here at Convex.

Sam 01:51
Awesome, I think you might have just given us a new tagline, I love that, doing what you love helping companies with revenue growth and customer satisfaction. And that really is right at the core of what we also do at D&B so I've been looking forward to this podcast for that exact reason. And just thinking about it, you and I actually must have overlapped to Barclays about a decade ago, which is a small world, sort of small world. As Chief Data Officer at Convex, which is a relatively new player in the insurance space, and as you know, we've had your founder, CEO and Chairman Steven Catlin on the podcast, and Convex are of course a partner of ours. But for any of our new listeners, what is Convex do in a nutshell, and what is the organization set out to achieve that makes it as unique as it is? And it really is a unique greenfield approach to the industry.

Akhil 02:39
That's true actually. So just a quick background, it was Stephen Catlin and Paul Brown, who launched Convex in 2019, we had an initial committed capital of $1.7 billion. Essentially, Convex is an international specialty insurance, and we do insurance, reinsurance, complex risk, and based essentially, out of London and Bermuda. You know, given I'm new to this space, I didn't know what Convex was, but once you kind of get to know the space, and then you understand what they're trying to do, I think it is quite fascinating. The ethos of Convex is we want to be different, we want to service our customers better. And we do want to do things differently. And having been here four months, I can tell you, they actually live by that. We are trying to change the way the insurance industry works through the small things that we are doing inside Convex. And the best thing for me is there is a lot of diversity of thought and approach. And we really do feel that we put the customer at the heart of every conversation that we have.

Sam 03:39
You're right when you talk about you meet with Paul or Stephen and the energy and insight and innovation that these guys are bringing to the industry is really quite remarkable. To raise $1.7 billion of committed capital out of the gates as a new business is remarkable. But when you meet the people that are leading Convex, you get it, immediately. And you feel that energy. I was leaving a restaurant with Steven near Leadenhall Market, and a young professional came up to Steven and he stopped him and just said, Steven, I want to thank you, you gave me my first opportunity in the insurance industry when you were leading Catlin, and it's changed the trajectory of my career, and you were a wonderful inspirational leader. And it's moments like that, that you realize just how big – not the opportunity as an innovative insurer is, but specifically the opportunity with wonderful leadership like that. It's a really special thing.

And when you think about the insurance industry, it's typically been viewed a little bit slower when it comes to the transformation and evolution of the industry. There's a lot of reasons for that. But when it comes to technology and data, I think today is the fastest it's ever moved. And it's a really exciting time, if I had said to you Akhil that no one would be in Lloyds of London, writing insurance and then queuing at little desks, and going for drinks in Leadenhall Market, for a year, or for the majority of 2020, you just wouldn't believed it. And so, for some insurances, a CDO might be quite an innovative and new role. But for me, I think at this moment is probably the most important. So it'd be interesting to hear from you what prior experiences in the technology and banking spaces you're gonna leverage to apply to specialty insurance, at this critical moment.

Akhil 05:21
I think we are completing the new transformative space and I think the Lloyd's of London example is quite relevant. I can tell you about my experience. And like I said, I joined mid lockdown, I haven't been to the office once, but it's not stopped me from doing my job effectively, and working with an interesting team. So I think all of us stand testament to the fact that we adapt, and we learn how to survive and actually do, you know, do a better job at it. In terms of data, the role of data and CDO is very new to the whole industry, I was chatting to somebody the other day, and we realized that seniors typically have been around for the last five or 10 years. If you asked me 15 years back, what does a CDO mean, it was somebody who does something with data, and is typically associated with organizations which are far more internet savvy, which are dealing with vast volumes of data. It was only banking that started picking up and saying we need to do better things with our data. And that's how the role of a CDO came about in the financial services space. And then everybody else kind of started realizing the value of it, so I wouldn't say insurance has been extremely slow, I think they've just been trying to adapt, modernize in what they've been doing and trying to do that with data was the obvious next choice.

So what we got to remember is challenges that, at least in my experience, that I find with insurance are not net new. So we're not ready to do something that's not really been solved elsewhere. So it's useful to actually have experience from outside the industry and bring that in, and leverage that to basically be able to jumpstart what essentially insurance wants to achieve in the space of both data and technology, which is quite a good thing in my view, because you don't have to kind of rebuild everything from scratch. There'll be a lot of net new things that we end up doing in insurance, which is what excites me, you know, the introduction of things like IoT being more proactive around our claims management process, which actually bring that differentiation. But just to jumpstart, we can leverage what people have done outside and bring it to the world of insurance. So for me, technology has necessarily not been a priority for insurance but I think that mindset is changing, which is brilliant and for me, it's a great time to be able to be a part of that journey, and take Convex and the insurance industry along a path where we can realize the true potential of data.

Sam 07:28
Awesome and, you know, there's so many interesting trends that are happening at the moment, because of the world that we live in today. Bringing those experiences to Convex is really going to set the business apart. And COVID-19 has created a ton of different trends and interesting opportunities. But some of them have been there for a long time and some of them are very disruptive to the insurance industry. You've got consumer trends that are changing the impact of the entire value chain, you've got this competitive shift, you have consolidation across brokers and insurance, and insurers across all business lines, different product innovations happening. There's other trends and stakeholder management, we've got governments that are looking with laser focus at insurers at the moment. And the Pandemic Re initiative that Stephen is leading on and D&B are involved in, from a data perspective, is a fascinating example of that. We've got disruptors that are coming to the fore, and then of course, we've got technology and the rise of all sorts of new technology trends like IoT, AI and smart technologies that are providing opportunity for insurers to look at it differently. What impact do you think COVID-19 will have on the sector in terms of digital modernization? And are there any key trends that you're seeing that you expect to really come to the fore in the next 12 months?

Akhil 08:44
I think we already seeing some of the impacts that COVID has had on the industry that are known tangible impacts. We've started testing our workforce a lot more, we can now believe that we can all work remotely and be as effective, if not be more effective than we already were. It's given people space and time to manage their personal life and their professional life. So that's kind of the softer aspects of thing. And I think there's a lot more focus on employee well-being as a result of the current situation, which I think it's a positive. In terms of digital acceleration and growth, I think we all have to acknowledge that Covid has forced everybody and not just insurance to rethink their strategies and understand their digital and data roadmaps. We were lucky at Convex, it's quite a digital enabled organization, we've been on the cloud since the day we started. All of our onboarding was seamless, I just got everything delivered to my doorstep, I just plugged in, and I was ready to go. So we've been able to leverage all of that because we just started a year back. But we've had to think about how do we interact more digitally, with our clients, with our brokers with our customers. How do we become agile in our interactions and try and be there for our customers when they really need us. So it's a period where we've had to evaluate our overall strategy and think how digitalization can actually help us in these strange times.

Sam 10:04
Yeah if we talk about digitalization and some of the firms that are approaching it differently. I mean, we've got companies like Lemonade, they've had a fascinating time in recent years and have raised substantial capital. But insurance is ultimately about risk analysis. And Daniel Schreiber, the CEO of lemonade, is a huge believer in data analysis. He actually said once that he would rather hire a data scientist than an underwriter. How true do you think that sentiment is? And I remember when he hired, it must be three years ago, approximately, a Chief Behavioral Officer, that was a real first in the industry, do you see Convex thinking about new roles to adapt to this new world?

Akhil 10:43
I'm a strong believer of having the right person for the right job. So I won't necessarily agree or disagree with Daniel, but if you think about purely these roles of underwriting and data scientists, I think they're complementary roles, I don't think one replaces the other in my view. So you're right, you know, our main job is writing better risk and writing better risk not just for Convex, but for our customers as well and helping them when they need us. So the underwriters bring that experience that they have across the industry, the knowledge and the understanding of the risk landscape, and the overall market and our customer base as well, and what they really need. And what our data scientists do is complement that decision process with data points that essentially you not be able to crunch as, as humanly possible. Since taking better informed risk decisions, which is the core of our business, which is enabled by this complementary skill set that these two roles bring together, I don't think one necessarily replaces the other.

Sam 11:37
I think that's a very astute position on it. Perhaps Lemonade was a bad example, I just looked at their share price, and it's actually about half of what it that it was on its 52 week high. Maybe a bad example. While we're on the subject of talent, let's go a little bit further. And because we're reaching this inflection point in the industry, it is important, I think, to bring in new people fresh ideas, and bring real diversity to the industry, which perhaps hasn't always been the case. What should the industry do in your mind to ensure that it's fostering a diverse and inclusive culture, and are there certain areas where you think more focus needs to be given?

Akhil 12:14
This is a timely question, but I think this is not just for the insurance industry, this is important for industries that truly want to move forward with being more digitally and data enabled. I've been through a fair few industries in my career, and what I've realized is everything that I learned in one industry could easily be translated and leveraged in the next place that I went to, and then I learned something new there and I brought that experience to the next place that I went to. Which is what was really fascinating and really interesting for me, and honestly kept me going and doing this again and again.

Diversity is very important, when it comes to culture, you should be able to create an environment where people with different mindsets, people with different experiences, people with different thought processes, are welcome and they can contribute to the overall growth of the organization. That's something that I really like about Convex. Through the four months that I've been here, I can already see that you are encouraged, everybody's put in a place where they are encouraged to think differently. And their voices heard and a challenge as long as it is driving us in the right direction is a brilliant thing to have because that's how we think innovatively and differently. What really important is, for us to understand, where are the gaps? Where are the key gaps? And how we fill those gaps? And how do we partner with universities? How do we tap into net new talent? How do we encourage them? How do we look at roles that we need, for example, this whole role around data scientists going back to the previous question. Where do we need them? Where do we apply the skill sets? Where are the best fit? How do we marry them up with existing experience that we have in the insurance space, bring them together and drive the business forward? I think as long as you can do that we attract the right talent from different industries and allow them to challenge us in the right way, I think to be the right path for us to set up that all-inclusive culture in insurance and make sure we can actually cause a wave of differentiation.

Sam 14:05
Yeah, I'm a passionate subscriber to everything you've just said. And actually I think under Inga Beale's reign at Lloyd's of London, she did a really nice job of championing diversity and I think having a central marketplace, championing diversity and being at the forefront of the industry was a really important move at a really timely moment for the sector in the UK and I hope that it continues to be the case. And based on all your various roles and experiences, if you were speaking to someone, I don't know, a young professional, someone leaving university is just starting out in the industry, what would be your piece of advice?

Akhil 14:40
For me what's really helped me is don't be afraid of challenging the status quo. People do what they do, because that's what has made them successful. And it's very difficult to see the other side of the coin. So if you have the ability to challenge them, challenge them positively, and drive an effective change in behavior and outcomes, I think you should never shy away from doing that. So I think that's really important. A lot of people have told me through my career saying, oh, you came from Telecom, you can't be in banking. Oh, now you made it a banking now you can't make it under insurance. And I'm sure, the next thing that I end up doing, I will hear the same thing. What is key for me is actually this diversity of experience has always helped me move forward. So don't be afraid, if you're trying to move from one place to another. Insurance is truly exciting at this standpoint, they really need that diversity of thought, they really need that diversity of leadership, they really need that diversity of experience. So don't be afraid is what I would tell anybody who wants to come in.

Sam 15:37
Okay, so you know, right there, you were talking to a 20-year-old, and at Dun and Bradstreet, our mission in insurance, is to help power the next paradigm. So if I asked you to just fast forward 10 years, what does that next paradigm look like to you? What does insurance in 10 years look like? What are the changes that happened?

Akhil 15:54
I think I expect insurance to be more customer centric. Right now it is more risk centric. So we look at a risk and we qualify the risk and we want to look at risk in a certain way, if that makes sense for us and for the customer. I think we need to be more customer centric, we need to be much more digitally enabled, a lot of people draw comparisons to banking and other sectors, and you know, I think those comparisons are not very accurate, because we are different, we are unique in the sense of how we deal with our customers and the way the market is set up. I do believe that there is a lot of scope for automation, there's a lot of scope for being proactive, being there for our customer when they really need us and before they need us, us servicing them. So I think these facets will improve the way we exchange data, the way we manage information across the industry will change significantly. And I can already see that we're taking steps in the right direction. So for me, that sounds really interesting for the next 10 years if I think about how we will be more digitally enabled.

Sam 16:50
Tell me this then, if in a future world, there's more automation, and digitization, you've managed to lower what today for insurers is a relatively high cost for customer acquisition, where do you invest that money, what are the big investment areas as a Chief Data Officer that you will focus on?

Akhil 17:07
I think we've always been traditionally not great at managing the quality of our data, the understanding of the data, and using that data effectively to drive excellent customer experience and operational efficiency. And we never use data effectively in our decisioning process, we always use the experience of people. So I think if we can invest our money back into these facets of data management end to end, and bringing that appreciation of data right into the heart of the operations where everybody understands that they own the data and they have a responsibility for it, I think that'd be a great place to be in because then you would have an organization where people and processes are empowered and aligned with your data strategy, and driving reliable, trusted outcomes. I think that will be a fascinating combination.

Sam 17:55
Well, that sounds to me like a challenge for Dun and Bradstreet and a good place to change the topic to a lighter finish for the podcast. If you had to debunk one myth about the insurance industry, what would it be?

Akhil 18:07
It's interesting I got asked this question by an old colleague of mine, saying you're in insurance, what do you think, they seem old, and they seem very slow and they don't like to change. Honestly, I can tell you in my experience, at Convex, one thing that you want to do is change the perception that insurance wants to operate the way it's operated for the last 200, 300 odd years. And it's not innovative. It's not forward thinking and it is not there for its customers. I think that is completely untrue. And after speaking to a few of my peers in the industry, everybody's trying to change that and take really positive steps in that direction. So for me, the industry is clearly looking for great talent, and is looking for ideas to be differentiated. And we all understand that we are all customers of this experience, right? No matter what we do on a day to day basis, we are shopping on Amazon, we are on Netflix. The reason we like those platforms and those products is because they give us what we need and much beyond that, so they're thinking about us. I think that is what insurance is aiming to be. We want to think about our customers before we think about anything else. So if there's one thing that I would like to tell people is that you can be a part of the change, there's a great opportunity to actually make that differentiation. So come join us and we are, you know, we are ripe for change.

Sam 19:18
I love it. Akhil, thank you so much for joining us on the power of data podcast. It's a privilege to have you on it. It's a privilege to be a partner of yours, as Dun and Bradstreet, and thank you for such an insightful conversation.

Akhil 19:29
Thanks, Sam. I really enjoyed it. Thank you for having me.

Sam 19:31
Take care.