Disruption and innovation in the insurance world
Graeme Howard is the current CTIO at Covéa Insurance. He has a wealth of experience leading transformational projects and has for the past two years been responsible for leading and developing Covéa’s technology innovation and transformation strategy, as well as driving improvements in delivery and services.
Graeme recently talked to eSynergy about his work at Covéa, including the introduction of a microservices architecture into a traditional technology estate…
The challenge at Covéa
Covéa is a mid-sized, Tier 1 insurer, with over 60 years’ experience in the UK market. The challenge, when I arrived, was the same challenge affecting most insurance providers, in that insurance hasn’t really changed for a hundred years. There was lots of legacy hardware, software, and systems, technical debt and systems that existed in silos. This had to be addressed.
We needed to migrate to new technology platforms that support future customer and business needs (it was recently estimated by EY that less than 10% of European insurers have workload on the cloud). This meant taking a leap of faith and not building on these legacy systems…
We want to change the face of insurance through disruptive and innovative technology. The advantage we have is that we’re not tied down by some of the restraints affecting the bigger, monolithic insurers, who find it harder to disrupt the market. We’re doing something that’s a little bit different. To create that new identity and culture, we created Covéa Digital as the technology-driven engine of Covéa.
The team is around five hundred people, both permanent and contractor staff, working on things like the digital experience, UX, insight, DevOps and engineering. We’ve created much of our own software, not just bought it ‘off the shelf’. There’s also a whole piece around service – looking after our existing legacy platforms, looking after our new systems, exploring data science – and insights and analytics. Our strategic aim is to drive this forward…
Why does insurance need disrupting?
People buy insurance because they have to. We want to make that purchasing choice more compelling; we want people to choose their provider based not just on cost but because they provide a service and a level of personalisation.
There is already a level of change taking place in insurance. With new insurer techs and new technology, companies are now doing things much faster. The key is to harness working with insurer techs; to be a provider of insurance services that can integrate with other companies and move at speed.
Our vision was to create a digital insurance as a service platform that enables our teams to rapidly launch new products (hyper-personalised products) to market, partnering with internal and external customers on innovative ways to exceed customer expectations. We make this possible by ensuring that our digital experience is enjoyable, intuitive and intelligent.
In order to negate the issue of legacy, we’ve used microservices to create this ‘insurance as a service’, to enable affinity readiness and to support diversification. This has allowed us to create digital experiences and capabilities tailored to the individual needs of customers. You can rebuild and reuse different components, using solutions in different ways. This cuts the platform down into usable slices.
We believe this is the way to be more agile in the market – offering different services whilst meeting expectations.
How we did this
We split ourselves into five core areas: policy; claims; pricing; and data – which is at the heart of all the work we do; there’s also EARTH, which encompasses the employee experience, service stability, security and decommissioning (below).
We use the planetary system (below) to encourage ownership and show how we segment our work
Everything we do is event driven. If we want to interact with somebody, a third-party supplier booking system, for example, we can share data, sending and receiving events (using an API gateway to share information with our microservices).
We do a lot of work with affinity partners so we are driving a lot of big-name insurance solutions. A big part of our strategy is to offer insurance services to companies that are bespoke to them. All of this fits within our architecture.
We’re using lots of open source technology, using exiting things like Kafka, Seldon and Kubeflow (for data science), as well as Python and Camunda – an amazing workflow solution. These are things you wouldn’t normally see in an insurance environment, but we have a lot of experience from outside of insurance to help build these platforms out in a way that’s more interesting to customers. Our team has the freedom to really utilise their skills and knowledge from those other areas and bring that into the insurance world.
A hybrid cloud approach
As we’re migrating over 370 different legacy platforms, it really takes time to build these systems out. So, we’ve adopted a hybrid cloud approach: We’re using AWS and Azure as our key cloud providers at the moment, and we’re looking to move much of our legacy hardware away from our existing data centres and onto the cloud. We’re also pushing a lot of our applications into SaaS solutions so we can move the bandwidth from our data centres over.
The cloud environment gives us scalability; our quote engine is a great example of that: it’s still the same software, we’ve just managed to host it in the cloud, massively increasing its capability and its capacity to support us.
In terms of the hybrid cloud, we’re using Kubernetes and Docker to great effect, working with Amazon and Microsoft to provide a multi-cloud capability and a new private cloud that operate as one (below):
We’ve tried to factor as much flexibility into our approach as possible, to move workload around at will, and we’ve already seen a considerable impact from this.
What does the future hold?
In the future, we’ll be working with other insurers, driving things like the Open Insurance Initiative and Blockchain ‘Smart Contracts’ standards for extensions to microservices (sharing the workload). These collaborations will enable Covéa to adopt an open insurance API approach and further extend our core insurance as a platform by helping to define and follow a global standard. This type of information sharing will allow us to leverage what we’ve built and future proof our organisation.
For more information on Graeme’s work at Covéa, watch his eSynergy Tech Series presentation here.