Zurich Insurance Group CIO Thomas Kropp on digital strategy
As digital transformation sweeps across companies and industries, 2019 will be a year of decision-making and profound change, according to a global survey by The Economist Intelligence Unit (EIU) that was sponsored by DXC Technology and the Leading Edge Forum. Companies overwhelmingly recognize that digital transformation is now a requirement to succeed. Most are determined to take the next steps in their transformation journeys to drive growth and better business outcomes.
Below, CIO Thomas Kropp discusses Zurich Insurance Group's digital journey.
Zurich Insurance Group Ltd. is Switzerland’s largest insurer and ranks in the top 100 in the Forbes Global 2000 list. Zurich’s business is balanced between Europe and North America, between commercial and retail, and between property and casualty and life insurance. It employs about 53,000 people serving customers in more than 210 countries and territories around the globe. Zurich serves individuals, small businesses, midsize and large companies, as well as multinational corporations.
Thomas Kropp has been with Zurich for more than four years. As a member of the Group leadership team and as the Group IT services officer, Kropp enables a better experience for Zurich’s customers and employees by making best use of the opportunities technology provides.
Describe your overall digital strategy.
“Change management, training and reskilling people are absolutely critical to enable a true digital transformation.”
Our goal is to exceed customer expectations with compelling products and services. We are committed to changing the customer experience through innovation. Our three strategic pillars are customer-centricity, innovation and simplification.
Since we are a global company, we have digital propositions at different stages. In some areas, we are still in the prototyping and piloting phase. In other markets, we are already using what we’ve piloted in one market to build scale.
What are the top business goals of your digital strategy?
Our emphasis is on putting customers at the heart of everything and focusing on how we can better serve their increasingly connected lifestyles, with digital innovations that provide the tailored risk protection they want.
Beyond that, we are looking for ways to become more efficient, which helps us to make best use of our resources. One example of this approach, which also should improve how customers experience us, is the new digital capabilities for reporting claims that we have introduced, which improve the quality and speed of claims handling and generate loss-adjustment expense savings. That benefits customers by allowing us to pay claims faster and spend more human time with customers who need this type of personalized support.
Where have you had the biggest impact so far?
We started with one fundamental question: Do we start with simplification, and then focus on the digital part? Or do we first focus mainly on the digital aspects? We decided that we needed to simplify our organization first. If we had ‘digitized’ overly complex processes, that would not have had the best outcome. So, we invested substantial resources in the last two years to simplify our product portfolios, our processes and the underlying IT. We retired 30 percent of our applications and moved 40 percent of the remaining ones to the cloud. We consolidated over 50 data centers – today we have just 15 – and upgraded our global network. All this helped us build the technical foundation that we need to deliver digital solutions at optimal speed.
But we don’t just continue to simplify and modernize our existing operations that are the foundation of our business. We are also building new capabilities for the future. This will lead our business transformation over the longer term. For instance, we will focus on what customers really need: We have already achieved tangible results, such as providing roadside assistance services to customers in real time and are enabling ecosystems in the wider sense.
To what degree does your digital strategy require a change in corporate culture?
Introducing new technologies can create a massive disruption that requires a tremendous amount of change management. We need not only a customer-centric, but also a human-centric approach. The changes in society and our industry are also changing the way we work and lead – in a much more agile way. Control, which obviously is part of our DNA as an expert in risk management, needs to be turned into trust and empowerment. To be fast and to create better outcomes we are moving to a flat organization, working together as communities of experts and in global networks within IT, the company and our partner ecosystem. I believe in the power of ecosystems. We are not only collaborating through strategic alliances, but also using the power of insurtechs and startups to continue to experiment with new opportunities.
Which parts of your organization would you say are the most digitally enabled?
We are one of the biggest commercial insurance providers globally, and commercial insurance is about data — and maximizing the information from that data — so that’s clearly one of the areas where we started very early. The second example is travel insurance, where we use mobile information from customers – for example, their location – to protect them when they are traveling. We can alert them of dangerous situations and ensure, if they are in a location that entails risks, that they are okay.
We are looking at all portfolios and functions for ways to better use technology to improve our customer focus. We are looking to implement digital solutions all over the globe and across all of our business lines.
Which technologies are most important to your digital strategy?
First and foremost, we apply a security-by-design approach for everything that we do. We use cognitive and AI to enable more personalized services, automated deployment to enable rapid deployment in the market, cognitive and robotic process automation to achieve “zero touch” maintenance, and the cloud to enable standardized and secure, easy access to different systems, modernize and make us fit for the future.
We have already made some investments in blockchain, where we are part of the B3i initiative. Crowdsourcing has huge potential, not only to get access to global talent, but also to get the right people in jobs where we need them most across our global organization.
What are the biggest hurdles when it comes to implementing your digital strategy?
From a technical perspective we need to continue to reduce technical debt by keeping existing systems updated or upgrading to the latest technologies. We also continue to simplify operations and decommission redundant applications and functions.
Equally or even more important is the need to address fears and unknowns related to digital technologies. People automatically assume that digital will mean redundancies, or, optimistically, will create new jobs – but what will the new jobs look like? So, change management, training and reskilling people are absolutely critical to enable a true digital transformation.
What keeps you up at night when you think about your digital strategy?
If you talk about digital, you also have to talk about security. There’s a lot of eagerness to move fast. To adopt new technology and approaches using digital solutions without sacrificing security is not an easy challenge.
At Zurich we are supporting this secure transformation internally and for our customers with our global cyber insurance propositions. We are also educating customers about potential risks.
See the complete survey results and download 2019: The year of digital decisions.