Q: You speak quite extensively on the subject of Digital transformation on various social media channels. Specific to the insurance, what are the top three to five things that you think an incumbent Insurer should consider before they embark on this, you know, journey?
A: And the first thing is that it's not a journey that they should consider, because if they're not already on it in some degree, then they're out of the business.
But it's a good question. And I guess if it's probably a question of me following up on what, what we just spoke about this with transformation projects and the length of the projects. I think, I think now, especially if it's from the Middle East, my experience is that the middle east is, is quite unique in the sense that the management, the board directors, the owners expect returns within very short timeframes, we're talking a year or even quarters.
So, it's very difficult in the Middle East to get a two-or three-year project through. And I think you need to plan your transformation programs in that light.
See, when you do consider where to take your company on the transformation journey, break it down, into chunks that are manageable. You may have to invest in some larger chunks that could be, if you find that your core system must be changed. I've only seen very, very few cases in my, in my history where that has been the case. Normally you can build a layer around it, right? But in very few cases you have to do it simply because the software is no longer supported. And, that is a longer project, but make sure that you've built momentum before you go to that. So when you go and ask for the money for the board director, as you say, we've been doing these smaller projects for the last six, 12 months, and they're all successful.
And now building on this, we need to do a longer-term project. But even when you embark into a longer project, I would, I would strongly recommend you keep a parallel track with the so-called and show the organization that things are moving.
So breaking it down into smaller-sized chunks that generate and prove a return on time spent is, is probably the most important point. And if you do that, you also risk not driving the company in the right strategic direction. So even before you start doing that, have a clear NorthStar and a clear goal saying, this is where we want to be in three or more years. So, when you do these shorter projects, make sure that that to their pointing towards that north star. So, at the end of the day, you are moving the company towards the strategic goal.
Q: So, I think you're, you're right about the, you know, breaking it into pieces and having a true north for the journey. I think there's a bit of a follow-up, you know, what are sort of the approvals at are the challenges that you have seen at the board level? It's almost like what is the cheat sheet that a digital officer should have in terms of answering the board and also getting the culture, right. I mean, it's also a mindset, as you mentioned about people as well.
A: There are many answers to that question? And let me, let me, if you allow me just to do a five-second advertisement for, for something I've just started, because I've started, I've started a series that I called Frederick Five, which is which, which is videos, obviously five minutes on, on the topics that matters the most in, in business and digital transformation. And I've started that because actually to mitigate one of the questions that you just gave me, because the board of directors, they, they do not have sufficient general knowledge about tech and it, and that's perfectly understandable because they, they have another history and another past, and they have been chosen to be part of directors to look at, at running the business. However, running the business today is also running technology, running digital. So I feel it is, it is our responsibility, to educate or give these little bits of the things that you have to know as a C-level member of the board, in order to help the CDO make the right decisions.
As, a chief digital officer, you come to the board to your CEO saying we have these opportunities or problems. I suggest this, what are you suggesting, please collaborate with me on this because I don't have a single truth truthful answer. If we do our job in, in also educating or the decision makers on, on what we are working on in this space, we will have much better colleagues in making the right decision. So that's one thing, that's very important. Don't, don't assume that people, they know what you expect them to know. So one thing, another thing is, but that that's following, we've been talking about so far, because when you go to the board of directors and your C levels, right and you have a track record of shorter projects with the clear return on investment saying, you see, we do this and you can see the results in, in this financial year, this fiscal year, then it is easier to get things done.
Q: Is there any, you know, new metrics that they can use in these conversations to their, to their board, or as an organization to show that they are making that sort of stride?
A: That's also a good question. I think one of the things that you need to start looking at is who your competitors are. Right?
We are so used to looking, you know, across the street to see the mixed insurance company. And then we are comparing our prices and everything and everything to them. And I've heard, I guess, one time too many people saying that, yeah, I know our customer service isn't the best, but look at our competitors, it's much worse. And then, and then they've settled for that. I think it's time that you realize that your competition is not insurance companies, especially where, when you're looking right, because where, where we spending most of our time, when we go online, we are spending most of our time on Google, Netflix, Amazon, we are spending our, our smartphones ever, right? So, these are our expectation as consumers. Now we expect the world to be as easy, as epic, as intelligent as Amazon, you know, and as entertaining as Netflix.
That is one of the things that insurance companies have to start thinking of. If you look at Amazon and Google, you will see that they have all started their own insurance departments or units. One of my good friends, he's the managing director of insurance at Google now. So these giants, they want insurance to happen and why, because they need, they need a new source of revenue. If they're going to continue their growth, it's Amazon, Netflix, Google, and this kind, right? If they have to put, I think it is 1 trillion, US dollars, each of the companies, or the next three years, you don't get that from selling more of the existing goods or selling more advertising for you, either from getting into financial services, which is insurance and banking.
And so, there is this index where you are measuring how difficult it is, but how much effort do your customers have to put in to solve a given task, get a quote file a claim or whatever it is. And this is a message that's really interesting because it only shows how easy your site is to navigate, but it also shows how many clicks or how difficult it is or how automated your processes are. So, it's more, it's a good metric for transformation as well, because when you work with transformation, you work with automation and optimization, right.
Q: And our next question is a little bit tied to that. It's really about, you know, smart devices that are kind of entering our lives. And we have seen, you know, various sort of fitness trackers getting into types with insurers in South Africa, Asia. And so, on wondering, you know, if there's an opportunity for that here in the UAE with some of the critical illnesses like diabetes that that's prevalent here.
A: It is worth looking at, the demographics of the population and characteristics of especially the UAE or the middle east in general, because we are, we are still 85% + ex-pats. And the characteristic here is that we are offered health insurance if we're talking about health insurance at the moment. But typically, our employers and our employers typically offer it, unless you are within a health insurance company.
Our employers typically change health insurers year after year, every second year to look for better deals to keep the competition hardware and these trackers and fitness trackers. These are typically products that give you the benefit of a long-term relationship. So if you start wearing a health tracker today, then you will see the benefits quite fast, but your insurer will see them over a longer period of time, which makes it very difficult to create a good case in the UAE because the, buyers, the main buyers of health insurance, a switching provider year on year.
So, the insurer won't have the time to reap the benefits of investing in these devices. Right? That being said, I still believe that there is a huge potential.
Q: Cloud migrations. Now tell us some key lessons that you've learned along the way. And what advice would you give to IT heads and digital leaders in this region?
A: Two, two-speed IT is, is not that connected to cloud migration. Two-speed IT is more the concept that we touched briefly upon in the very beginning, where, where, where you basically isolate, your co-insurance system under connective layers, API layers, and then you can build fast-moving layers on top of this.
So, you actually have, have chances to change your business processes or your websites or your apps without having to go into the core system. And of course, if you look at this from a cloud perspective, then, then you could argue that you, that you keep your coinsurance system on-premise in your existing server part, and then move the rest to the cloud, because then you would have the opportunity to start moving quite fast with, with the layers of integration, no layers of differentiation and engagement, where, where you have to work with your business processes for your transformation, and you have to work with your customers for engagement.
But the general concept of moving to the cloud, I hope that most of my colleagues are at a point now where we don't have to persuade them, to go to the cloud anymore. I don't think we have any good arguments left for why we wouldn't. There have been some arguments about the data having to reside in the UAE, but now we have all the cloud providers in the UAE, so that doesn't work anymore. I think it is probably, the fear of losing control that makes people resist going into the cloud. So, I have a couple of observations here. The first one though is don't expect that you're going to save too much money by moving to the cloud. Yes, you'll most likely be saving internal resources because you don't have to have the same people keeping the light on at the server.
But that money goes to keeping the lights on at the hosting center. And so, I don't think you build a cloud case on saving money because you will be disappointed. You may be able to, but the cloud case should be built on several other topics. First of all, your ability to speed up deliveries of what you're doing is, is going to increase significantly. And then I guess you can make a, case about this. If you can go faster to market, because you're doing two speed, you can start getting money investments faster, and so forth. So maybe you can do it. It's not the specific cloud move. Right? So that's one thing. Another thing is, is cybersecurity, because think, think of a normal insurance company, how, how many people would we have in working dedicated to cyber security, two, three, maybe.
And their responsibility is to take, and keep track of all cyber security for 1200, 1500 employees, right? Plus, all the customers plus everything. And that's a big task. If you move to a cloud provider, these two or three people do not go anywhere because they still need to work with the cloud provider, but the cloud provider has many more customers. So, chances are that the cloud provider has 50 to 70, maybe even a hundred people working full-time on cybersecurity. Now I know where I would like to place my money, right. Would you like to have somewhere, you have three people working their bots off to keep all this safe or 70 a hundred people. Cloud providers also have the means of investing much more. They have much more advanced dashboards and monitoring, than most companies can buy, simply because it's going to be too expensive to buy these very advanced tools.
Q: Yes. I mean, I think that's a good point. You know, it's really about the agility the cloud gives the business. And I, and I love that point about cybersecurity. You know, they, they're a whole lot more concerned about keeping their cloud safe than, than maybe, small insurance or, or medium size insurance company is. That's a good point. And, you know, I mean, this is a bit of a, you know, subjective question, and you look back, sit back, you know, and just look at the region or maybe globally, do you see a couple of examples of insurers who have got this, you know, and this being transformation information approach to cloud and customer service, you know, and they're taking the right approach.
A: Yeah. There is SingLife out of Singapore. They, they've done the right things. I think when we are, when we are looking at this, I would, I wouldn't generalize, but in more general, I would, I would look at the far Eastern insurance companies. I feel because they've skipped an evolutionary step where, where the Western and the Middle Eastern insurance company, we have taken step by step by step. I, you know, if you go to China, you receive that the population is the youth today making the old thing, but they've skipped the personal computer. They went directly from nothing to the smartphone. They skipped to the solution in the way that you approach data and how you can use data.
And I think that is most likely what the rest of the world has to learn, because the second we, really understand the value of real data. Then we also understand how we have to change our operating models, our enterprise arch, and so forth to work with it. And then we are starting to get it right. I think that's where the major change will come from.
Q: Interesting. Well, that brings very beautifully to the next question. I mean, no doubt data is so critical in this whole digital transformation piece. Can you tell us how you use that in your organization in demand and then, the results it has shown for the organization? And, if you can share some examples, it'd be great.
A: We are at a point now where, where we are crafting a master data management strategy, which is, is a term that I hope most, no, but if not, they, they should look it up. Master data management is, is accepting the fact that you have data scattered all over the place, accepting the fact that you don't necessarily have to put all your data every night into a data warehouse and use the data warehouse for your Analytics and the way that you are doing things. Market data management works, with the concept that is called the golden record, which, which is, is a record, of pointers to where the single source of truth for each element in a product is. So, if your product could be, let's say, you're working with the concept of a customer and the customer has purchase history, phone numbers, mobile, all these things.
You won't necessarily have all this information in one place. The golden record will tell you where you have the single source of truth of what product this customer bought the last time, what email address he, or she's using date of birth and all these things. So, when you start changing the data, you also know what only place to change the data. And that becomes very, very it's vital. If you want to use your data for your predictive analysis for fraud, waste, and abuse in the insurance industry for data mining and all these things, you need to trust your data. And in my experience, even though it is how, how can I say this? Even though it's, it's less sexy to talk about this. It is, it is the single point of departure for any successful transformation of a company. You have to get your data, right.
And when you're getting your data, right, you don't have to get them a hundred percent, right. Because that's impossible, but make sure that you know, exactly what elements are the most important things you're working with. That could be a product, your products, your customers, or maybe your locations, these things have to be 90% correct. And then, you'll start from there and work with your data. So, you can start doing Machine Learning and all the intelligent things, but you can't apply these techniques on bad data because then, then you're not going to get any viable results.
So that's, that's, and of course, with our abundance of data in demand, when COVID hit, we were actually able to use, we have 15 years of health records for the UAE population. So we were able to predict who had the greatest likelihood of contracting COVID and if they got COVID having complications. So we can actually reach out to them and advise them of precautions. So having the right data and knowing how to use it is exceptionally important. And then you have the classic use cases, but this is for another discussion, but I could also discuss this forever, right. Because when you start looking at efficient intelligence, automated underwriting Machine Learning, then you're looking into the problem of explaining why the systems come into the prices that they do.
If you use your data for automated underwriting, well, it hasn't come to the Middle East yet it's in the US at the moment, right. Because you need to be able to explain why did you get that person that price? If you use advanced artificial intelligence, based on a million factors from, with what from the, they can find on online from your history and all these things, then all of a sudden, then you can explain the price and then, then you're not allowed to use that. So again, when you start looking at data and working with data, make sure that you keep this explanation ability. So, you actually understand what's going on in the black box, which can be complicated once you start talking into an advanced machine.
Q: I think our audience will love that. Now I just want to kind of go a little bit into the future, and there's a lot of talk and buzz, if you will, about web three and the concept of a Metaverse in which we will operate, we will live, work and, you know, hopefully, buy insurance as well. And, you know, you can see more and more digital goods, like NFTs, are being purchased by people. So now there's, it comes with its own risks. So, what do you think is the role of insurers in this space, and will it be used as a risk mitigation tool or, or will it just become a distribution channel for insurance? What do you see in the future?
A: If you buy insurance products, then in most cases, you are forced to get a home loan or car loan, or you have to travel or whatever. And you buy it, and you pay a lot of money upfront, and at the end of the day, you pray to the gods that you're never going to use it. So it's a product you pay for that you hope you're never going to use. So I don't think we should have too high hopes of us going into, you know, augmented reality and bio insurance and our new digital brands because people won't care. So, our role is, of course, understand what new risk of industry theft and all these things that need to be covered. This is one huge area of opportunity for insurance.
But I think the winners also, as we discussed, the winners will, will be the ones who understand the concept of embedded insurance. So, the winners will be the ones who understand to offer all the others who, who are selling in the media works and very, very simple, just a figure of a switched thing. And then there is an added-on insurance in the product they're selling. And that's where I would, I would suggest you should, you should focus your energy, on understanding how do we create a modular architecture. How do we create, you know, a modular underwriting module? So, so my customers or distribution channels would be able to create your own products to offer to their customers. And again, the least at the least path of resistance, right? These efforts go again, as simple as possible, both for the end users and even more so for, for the ones that you would like to work with as distributors because they will have millions of opportunities because the metaverse is by definition worldwide. Right? So you wouldn't care if the insurance company is next door or on the other side of the planet, which increases your competition significantly. And therefore, you have to be as simple to work with as possible.
Q: So, coming back to the reality here in the region, let's talk about Insurtech that is there, in and around the region, what has been your outlook on partnerships with these Insurtech and how has it evolved over time? Are there any active projects that you, or are you working with them that you'd like to share with that audience?
A: I think there is a wide range of very, very promising Insurtech in the region. I'm collaborating with them as much as I can.
And I think my biggest learning is that for, for incumbent and for Insurtech, the biggest problem that they we have is, is figuring out how to work together, Insurtech, Insurtech, they, they are under pressure to get results done fast. They need to get new business to secure the next funding fund, or even just have money to pay the salaries. True. So, they, they are really in a hurry to get things done. And they are also a very small edge and a nimble company in most cases. So they can move fast, right? They can put together a contract and send it overnight. It takes us 12 months to, to create a contract and go through. So this is a colossal mismatch, right? Because it's not like insurance companies don't want to work with insurance.
There's a lot of opportunities, but we in many cases see these problems were, where the insurance, they get fed up simply no way it's going to happen because it takes too long. And the insurers on the other hand also say, we can't work with them because they're pressure. They don't understand this. So, I think, I think this is one of the things that both parties have to address in the future. Insurtech have to understand that you can't do this with incumbents, and it's just not possible. And incumbents have to understand if, if we want to move ahead, we also have to change our rules a little.
And so I guess you can say that I'm not saying they were the Guinea pig, but we spent a lot of time figuring out how to scale our relationship with them? How do we make sure that we not only create a successful pilot with them, but also scale and rolled out to all our two and half million members and that succeeded? Now we have the, the appointment book, we have the doctor search, and we have a lot of very exciting things coming up with OKaDoc. And thanks to them. And that strong relationship we have with them is also opened up for us to onboard other Insurtech that I can talk about a little later, but now our process because of this first pilot has become much simpler. We understand how to, how to put together our systems, a more modular way, how to collaborate with them, how to in the beginning also align expectations, saying we like to do this. We have to go through these things because we have our own compliance and internal audit and regulations. We have to follow via financial institution. So, this is the timeframe. And you just have to plan for that in our relationship.
Q: As we kind of come to us the end, I mean, by the way, this has been smashing. I mean, I wish we could continue, but yeah, there's a message. We often ask, is there a message you would like to send anyone? Is there a, you know, billboard that you would like to have on road, which has your message,
A: I think it's a couple of things, right? And we've touched upon quite a few times. Then, the first is that digital transformation is, is working with humans and change of habits. And this, this is the first, you know, ingredients in this source of success. You, you have to understand that don't, don't listen to all the local vendors who promise the world, right. Because you can, you can buy all the systems you want, but if people don't want to change to start using them, just forget it. So that's one thing I think is exceptionally important for, for everybody that works in, in the transformation to, to remember. And the other thing is, also we've discussed many times, is this break, whatever you do down into to measure chunks.
I would even claim that if someone proposes a six-month project, they haven't done their homework well enough to break it down. Two projects with deliverable, deliverable, no measurable results of three months, right? So progress this way, because when you progress this way, you not only motivate the people who work on the pro projects, because they can see after three months, Hey, it's already working, but you also start changing the culture and start creating a, a can culture in the organization because they can see, Hey, it's actually working. And it doesn't take years. And again, your sponsors, the management, the board of directors, they will see that, Hey, it's working. So they will continue funding what you're doing. So I think these are the two things that I would say we are working with people and change changes of habits and break things down into small Micro work chunks. That's, that's probably the two most important things when you work in business transformation.
This is an abridged auto-generated transcript. Pardon the typos.