Hiscox’s Wrigglesworth on how to evolve an insurer’s tech estate

Most businesses are grappling with the ceaseless challenge of keeping up with rapid changes in technology. 

More recently it feels like the advent of large language models and generative AI has accelerated these changes, making the task of modernising and keeping up to date an organisation’s IT estate even harder.

If you’ve still got an old mainframe or system dating from the last millennium chugging away, you are going to have to do a complete policy administration replacement at some point.

Where to start? Do you go for the revolutionary approach and knock it all down and start again? Or can you work with what you have and look to evolve your systems? 

In my view, I think the answer lies somewhere between the two in terms of small-scale revolution but large-scale evolution.

Replace or repurpose?

First the bad news: as an insurer, if you’ve still got an old mainframe or system dating from the last millennium chugging away, you are going to have to do a complete policy administration replacement at some point. And it will be more expensive and more painful than you think.

But the better news for organisations with a system implemented in the last 10 to 15 years, assuming it’s not custom built, is that keeping up to date with upgrades is probably a better way to progress along with building out the capabilities that will drive business benefits outside of that core system.

Be clear about the direction

Critical though, whether replacing or repurposing, is being clear about where you, as a business, are putting your money in terms of buying or building the capabilities that are really going to drive value, differentiation and enable delivery of the wider business strategy.

For Hiscox, our tech strategy is embedded within our wider business strategy; it is all about driving efficiency and making it easy for our customers and our partners to do business with us, and internally for colleagues to work together more effectively.

That ambition has meant focusing on areas like creating the right API layer so we can build out digital services and integrate with broker partners’ systems; as well as building a new data platform so we can invest further in data science and AI to help with initiatives like AI assisted underwriting, automation of manual tasks, task allocation and prioritisation, and also improved fraud detection.

We are, for example, in the process of turning all our knowledge bases and underwriting guides into a generative AI powered digital assistant so colleagues can quickly and easily find the answer to underwriting questions, and over time we will look to use this base to automate more.

Prioritise, prioritise, prioritise

When it comes to any sort of change or transformation, once clear about your direction you need to prioritise ruthlessly and constantly, and recognise when you are starting to go down a route that isn’t going to meet your objectives.

We recently replaced our broker customer relationship management system and even though we went from an on-premises system that was 13 years old to a new cloud-based solution, we treated it more as an upgrade focusing on the small wins first and and getting the basics right, before moving on to deliver more sophisticated functionality for areas like lead generation and management, as well as marketing campaigns.

Another lesson here when your business is trying not to get outpaced by technology is that the teams who build the technology, need to retain ownership of it for the long term to ensure it stays technically and functionally up to date and fit for purpose. 

We have moved away from purely running projects to having long-lived teams at Hiscox aligned to value streams to achieve this objective.

The importance of supplier selection

Of course, much of the heavy lifting when it comes to maintaining an evergreen IT estate can now be outsourced to the cloud providers. 

The main players are constantly investing in cloud-native software applications to take a larger share of your technology spend and to (very effectively) tie you in for a longer term. 

All this makes supplier selection hugely important with an emphasis on understanding their record on delivery and ongoing support.

As a business, you will also need to incorporate the new functionality these providers launch over the lifetime of the product, which means ensuring that you have the right people involved internally from across the business – not just the techies.

It’s not always about knocking it down but…

The tech strategy though, should always come back to that question about how it’s working to enable the wider business strategy and, despite the pace of technological change, it does not always have to mean knocking it all down and starting again. 

It could be more about evolving what you already have if the business can integrate and modernise the existing IT estate around its overall business ambition. 

That said, be clear on what you are doing and be just as clear on what you’re not doing so you can maintain a relentless focus on those things that drive the value. And of course, don’t forget to ruthlessly decommission what is no longer aligned to that strategy.