Tracing its history back over 300 years, Aviva has witnessed plenty of change since its forerunner, Hand in Hand, began offering fire insurance to Londoners from Tom’s Coffee House in St Martin’s Lane. Adopting its current moniker in 2002 after the merger of CGU and Norwich Union, it has evolved its business through numerous acquisitions to reach 31 million customers globally across its general, health and life insurance products.
Fast forward to today, and Monique Shivanandan, global CIO for the UK’s biggest insurer, is helping modernise Aviva to compete in an era where many sectors – from retail to media – have already been disrupted by digital technologies.
“The insurance industry is one of the few left which hasn’t yet been disintermediated via technology. It is still a very traditional person-to-person and broker-to-person relationship,” says Shivanandan, discussing the company’s IT strategy at its central London offices. “It will be a completely different model in a few years.”
Having previously worked as chief technology officer at Capital One, the largest digital direct bank in the US, and as CIO of the BT Retail division, Shivanandan has already witnessed how quickly an industry can be turned on its head. She is looking forward to the prospect of driving the turning change agenda at Aviva, and meeting potential disruptors head on.
“We have a Google-like approach for where we are taking Aviva’s IT organisation,” she explains. “We are going to build both the teams and the capabilities to help us get there. We are using modern technology, we are using open source, we are using Agile delivery, we are building J2EE, Java mobile front-ends – we are doing all of the cool stuff.”
Investing in change
Shivanandan joined Aviva at the start of 2014, with responsibilities for IT delivery, operations, portfolio, planning and strategy to 11 properties across the 16 countries that the company operates in.
“Our strategic priority is to continue to simplify our IT, to rationalise systems down and make sure we have the most streamlined estate that we can,” she says. “We also want to create a digital first strategy and global environment for a digital ecosystem. That is pretty important – we are going to share our digital assets across the globe.”
Shivanandan arrived in the midst of some significant changes within the company. As well as the £5.6 billion merger with Friends Life (potentially a major IT project in itself), in the past 12 months there has been a reshuffle and expansion of senior executive roles, with a focus on technology as CEO Mark Wilson targets investment in digital, data and automation to support business transformation plans.
Alongside Shivanandan, new hires have included the appointment of a chief analytics officer, Adam Kornick, and, most recently, Bryan Littlefair, who joins from Vodafone as chief information security officer. Another major hire has been chief digital officer, Andrew Brem, who led the development of connected home initiatives at British Gas, now known as Hive. Shivanandan will work closely with Brem – who will also report directly to the CEO – with the chief digital officer focusing more on the business and pricing side of the digital offerings in what she describes as a “symbiotic relationship”.
“He is going to put together a digital proposition for consumers across all of our products and service areas globally, and I am going to build the technology that supports that,” Shivanandan explains. “Together, we will be able to drive better propositions.”
Aviva is already encouraging digital relationships with its customers across its numerous business lines. This has involved developing a series of smartphone and tablet apps to add to its existing online services.
“We have a very good start. We have a single view of the customer; you can see all your products and services online and access them through single sign-on,” she says. “What we now need to do is take that offering and dramatically leverage new capabilities and extend those capabilities. But it is a pretty solid, elegant user interface.”
For instance, its popular MyAviva app provides an overview of policies in one place. It gives access to quotes and loyalty offers, and lets customers renew their car and home insurance from a mobile device.
At the start of 2015 Aviva created a health records service that allows medical insurance customers to store and access medical records, offering emergency information through a smartphone app.
Aviva has also adopted telematics, relaunching its award-winning MyDrive smartphone app. This allows both Aviva and its customers to benefit from the use of mobile data. The service tracks a car owner over 200 miles via GPS, rewarding good driving with reduced premiums and potentially saving customers hundreds of pounds.
“People don’t want to pick up the phone and call agents anymore. They want to be able to see all their information online whenever they want,” says Shivanandan, adding that work is underway to continue to evolve the way the company interacts with customers.
“We are going to definitely look at telematics, home monitoring systems and healthcare to provide more interesting products,” she reveals.
“Telematics may or may not be the key driver: we have dabbled in it in the past because it has been interesting, but there have been all sorts of things evolving as we move forward.”
The challenge for Aviva is that it is not the only one innovating in this space. There are a growing number of insurance startups using new technologies to personalise services and meet the demands of customers. For example, telematics firm Insurethebox has grown in the car insurance market, while peer-to-peer ‘social’ insurers such as Friendsurance have captured consumer interest in new delivery models that could circumvent existing players altogether.
Keeping pace with the speed of innovation seen across the industry has led the multinational to look outside of its own business and tap into the expertise of smaller firms in the startup community.
As well as opening its APIs, Aviva has begun participating in FinTech hackathons, which has provided tangible results. For instance, one event focusing on flood claims led to new capabilities being added to its online services, while another created an app for employees. “We did them in October and they were already live before the end of the year. This is unheard of in the insurance industry,” Shivanandan reveals.
In addition, Aviva has created a ‘digital garage’ innovation lab in London’s Tech City, where it can develop and showcase new products to customers, and collaborate with startups to quickly learn what works and what doesn’t.
“We are building an innovation facility, featuring a bit of ‘connected home’ and ‘connected health’. We are working with some of the smaller startups to build certain propositions that we are testing, and we are bringing customers through all of the time to get their feedback,” she says.
“That is a different way of working than the insurance industry has typically done, and we are doing a lot of very quick trials. Now it is about how we package those capabilities to give our customers a great proposition.”
Challenge from large tech firms
At the same time, companies outside of the sector are growing their data sets and potentially rivalling insurance companies themselves. A report released by Accenture in 2014 shows that 23% of the 6,000 surveyed were open to buying insurance services directly from big technology companies such as Amazon and Google.
However, Shivanandan believes that insurance firms can learn lessons from other sectors that have been disrupted to avoid being usurped by newcomers.
“In the early 2000s, the telcos didn’t know that rapid industry change was going to come, with mobile and the emergence of Google and Yahoo, and all the players who have a lot of the telecommunications capabilities,” she says. “In insurance we now know what lies ahead, so we are going to push the adoption of technology rather than wait for someone to come and disintermediate. This industry will be smarter about it because we have the benefit of watching what has happened in other industries.”
Shivanandan adds that there are many ways that companies can work together, benefiting both sides. In her role as CTO for Capital Direct, she collaborated with the large tech firms to create new services for its customers.
“My hope is that we can partner with them,” she explains. “I would love to work together with Google on Nest, and I would love to work with the different telematics companies. I am hoping that we can create an ecosystem that includes the modern technology companies to build great products for our customers, and combine them for offers and things like that.”
From an IT perspective, the real value of a digital strategy lies in harnessing the data that is created through interactions with customers. This can provide better analytics, helping to create more personalised services to customers, as well as benefiting areas of Aviva’s own business, such as underwriting, with the opportunity to price risk with greater accuracy.
But while insurers may already be adept at crunching through large volumes of information, making sense of the growing variety of sources available is a tough proposition, even for a company that Shivanandan says is “built on data”.
To help solve this, Aviva is setting up a large Hadoop cluster kept on-premise within its data centre – both for data privacy reasons, and due to the low cost of hardware – allowing the company to incorporate data from third parties and social media.
“We did data analytics before it was cool,” Shivanandan says, “but there is so much more data now, so we need to look at how we take advantage of all that is available from external sources. Even the data that we collect that we aren’t yet leveraging. So we are looking at how we can build out our Hadoop data lake and leverage that, in addition to the existing capabilities, and really drive analytics to the next level.
“We will seed it with our structured data and our own web-click data, and we will also combine Twitter data and whatever purchase data we can get from different places.”
Underpinning this ‘digital first’ ethos is investment in underlying systems and infrastructure. Since arriving at Aviva, one of Shivanandan’s top priorities has been simplifying the firm’s IT estate. This is a similar theme for many insurers. Analysts at Ovum expect that global IT spending in the sector will grow to $107 billion by 2018, and addressing legacy systems is one of the main drivers as budgets ease and focus shifts to modernising systems and supporting innovation.
“As we move to digital, we need a different operational environment,” she says. “If you look at digital companies like Google or Facebook, their head of IT operations will have a severe impact to their employment if they have a 15-second outage, and insurers don’t work in that way. That just hasn’t been the case for most Fortune 500 companies. But with digital services, consumers are not only working with you during regular hours from 8am until 5pm; now we need to be always on,” she says.
“We have an environment where we focus on the working day and how our brokers work, and we are going to have to switch that. So we are going to have to make our estate resilient – not to support our current needs, but to support the future digital needs. That is a big strategic focus for the next year.”
While Shivanandan says that Aviva is “pretty far advanced” in terms of dealing with legacy infrastructure – much of which is separated from front-end systems using APIs – plans are underway to move to a more modern infrastructure that will support the deployment of digital services globally.
This means a move to an internal private cloud, based on standardised hardware environment, as well as working with public cloud providers more widely where necessary.
“We have gone through all of our applications and capabilities from a customer data perspective. When it doesn’t have customer data, let’s move it to the public cloud, and when it has customer proprietary data let’s architect our systems so they can work in a private cloud,” she says. “We are in progress, and hope to have a lot of the private cloud built in the first half of 2015.”
She has also been focusing on how to foster innovation more quickly within the business. Alongside the appointment of senior technology leaders, Aviva has been modernising how it operates internally. For Shivanandan, creating a dynamic workforce is key to supporting new digital initiatives, and one method has been the continued adoption of agile methodologies across its IT operations.
It is an ongoing process, and she expects agile adoption across the business to move from around 30-80% by the end of 2015. This will help move away from monolithic two-year development projects, and allow Aviva to attack new initiatives more easily.
“We are going to have to transform our labour force, and make sure people have the training to think in the digital world, and have a digitally native IT workforce. My goal is that we are not just the best insurance company in insurance, but that we are the best technology company period. We are not there today, but that is a transition and is the aim of where I want us to be.”