Lead Forensics


Party like it’s 2009

15.02.22 Mark Geoghegan

On June 28, 2009, Stephen Hawking famously held a party for time-travellers at the University of Cambridge.

However, because his guests were able to travel in time, he didn’t send out the invitations until after the event. No-one came.

For him, that was irrefutable experimental evidence that time travel didn’t exist.

It may also seem obvious, but you can’t see into the future because it hasn’t happened yet.

This means we always look forwards through the eyes of past experience.

Technology will make us really, really good at getting information in almost real time, but all our insight will still be based on hindsight.

We’ll be able to make sensible data-driven decisions. But the reasoning will always be based on ever so slightly out-of-date information.

Imagine this: your car engine heats up in excess of 220 degrees centigrade. The AI system remembers that the last time this happened somewhere else, the cylinders blew up. The engine is shut down and you have to call a tow truck. It’s inconvenient, but a potentially dangerous loss has probably been prevented.

This works pretty well if the engine doesn’t change, but of course, cars are now going electric at speed.

The AI isn’t going to be able to help you until it learns more about how the new e-vehicle motors behave. The kit changes and we go back to making educated guesses based on incomplete information.

The same happens with big transformation programmes.

Like a cowboy looking at the first automobile and wondering where the saddle goes, everyone always reacts to progress with reference to the past.

Take the long-suffering London market and its seemingly interminable efforts to fully digitise.

For example, AdvantageGo’s The Voice of Insurance podcast recently hosted former Hiscox CEO Bronek Masojada, who is currently chair of London electronic placing platform PPL.

Bronek made the case for common data standards as the final piece in the jigsaw to allow genuine digitisation of the syndicated market. Even though almost all London Market business is already placed electronically, Bronek described the current iteration of the software as simply digitising a paper process.

It wouldn’t be fully digital until all the data flowed electronically, never having to be cleansed or re-keyed. Or in other words, what we have now is a bit like a gasoline-powered metal horse.

Lloyd’s has subsequently published some really detailed modernisation plans for 2022, including important goals for common data.

Some of the negative responses to the latest big plan have been a wonderful illustration of backwards-looking thinking.

Some questioned why clients and brokers would input clean data in the format being requested by insurers when they currently submit schedules and bordereaux in whatever format that suits them.

This may be convenient for them, but not for subscription market insurers and brokers who have to re-format it, often once per market participant, adding turnaround delays, errors and a huge amount of extra cost.

But this misses the point. Customers and brokers are incentivised. They will do this because they will get three fantastic benefits in return:

Firstly, they will get better-performing insurance because there are less errors and the information is more accurate. Secondly, that improved insurance will also be cheaper because there are less frictional costs. Finally, the whole process will be miles quicker.

Better, cheaper faster!

The critic simply can’t imagine things being done differently in the future than they are today.

Classic backwards-facing thinking.

Right now, someone has to do the data entry, and that someone is the underwriter or broker. The naysayer assumes that the new format will simply try and shift this work onto the client – and that is the reason why it will fail.

But the naysayer is making a mistake. Why should the data entry of the future have to be a burden? Just because today we waste hours manually compiling long lists, why should we assume that we will always be doing it this way?

Is it too much to imagine that the gathering of future risk data may be as simple as a risk manager saying yes to a pop-up on a screen?

Something like:

‘Allow access to risk data feed? Yes/No?’

Click ‘Yes’ and the quote comes back at you in seconds!

The naysayers are like Lord Nelson looking at a space ship and asking where the sails are!

We can’t see the future and that makes it scary, but we should still be able to imagine and envision a path to a better one.

And we have one secret weapon on our side. We are not completely blind.

Progress may be all about moving into an uncertain future, but we are lucky that progress itself has quite a long history.

The past doesn’t inform the future, but detailed study of the methods we used in the past to create a better future will inform how we go about making a better future for ourselves today.

Becoming students of the history of progress can teach us what to expect and light a path in the darkness.

What can it teach us?

For one, it is clear from the past that if there is ever any unnecessary friction and cost, the combination of technological advances and competitive forces will always conspire to eliminate them to the benefit of all in the supply chain.

Another thing is that investment in research and development has to be substantial and eternal. You can’t give up and you should never stop.

Also, we should learn that new applications come in ways that will challenge our existing business models. Kodak invented digital cameras but couldn’t get over being a film-based business.

If it had seen itself as a mass-market image-making business it would probably have been able to survive into the digital age.

So let’s ignore the naysayers. If we remember we are in the protection business, that business is very competitive, and we therefore need to keep investing to improve and stay ahead, we are giving ourselves a fair chance of success.

Hawking’s party must have been really dull. No one showed (yet).

We’ve all been invited, so what are we waiting for? We may never get there, and indeed, it may well be proven beyond all reasonable doubt to be utterly impossible to attend, but we will progress an enormous amount by trying to get there, at least metaphorically.

What’s more, our clients will love us for it.

Set the controls for 2009, we’ve got a party to go to!

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