Exclusive: ‘A time for change’ – Gari Gono, Instanda in “The Insurtech Magazine”

The pandemic has demonstrated that a Cloud-based, API-driven insurance ecosystem delivers cost-effective change fast, as Instanda’s Head of Solutions, Gari Gono, explains

If the insurance industry needed a compelling reason to finally deal with digitisation, COVID-19 was it.

The pandemic has changed the question on its leaders’ lips from ‘if’ to ‘how’ they should modernise. And Cloud-based, software-as-a-service (SaaS), ‘plug-in’ API ecosystem solutions are among the fastest, least-disruptive options they can choose.

They only have to look across at the banking sector to see how that approach has played out. The ‘out-of-the-box’ model has take hold there in recent years with transformational results. Incumbents are gradually letting go of their historic predilection for owning their own, on-premise IT infrastructures in favour of platform systems that delight their customers with the kind of seamless services the big tech players have led them to expect. Cloud-based systems have delivered flexibility to scale (up or down), test and trial, introduce, improve or replace products at the touch of a button. Software-as-a-service is significantly reducing the cost of ownership and freeing up staff to concentrate on adding real value to the organisation. And an API-enabled network is facilitating rich data sharing and a marketplace approach.

Like banking, insurance has been hampered by time-consuming manual processes and documentation, compliance and hard-to-update legacy systems, which have held their gaze on technical delivery rather than focus on meeting customers’ needs. But whereas banks wrestle with the dilemma of how to expose their systems in an ‘open’ environment without sacrificing direct customer relationships, the insurance value chain is used to disintermediation.

Insurance carriers have been working through agents in various forms for years – intermediaries like brokers and, more recently, managing general agents (MGAs) and price comparison websites. It’s already a complex web of partnerships. Its immediate challenge is how to balance some of the biggest potential payouts ever demanded of it while experiencing historically low returns from investments. And who’s going to sign off a hugely expensive digital transformation budget against that background?

As Instanda’s chief of staff, Steven Haasz, recently said, the requirement for insurers to digitally accelerate couldn’t have come at a worse – or a better – time.

“Many insurers have used this [COVID-19] as an opportunity to look again at their strategy, tools, technologies, and how their consumers want to procure their services. They’ve decided they want to become more digital, nimbler, so they can improve their business. But at a time of immense cost pressure, they want to do so without the huge timescales and large sums traditionally associated with transformation.

“Partnerships are a solution to that problem. Insurers can partner with organisations like Instanda, where the start-up cost for the platform is considerably smaller than other technologies. This way, transformation can be made at record speed – we’re talking weeks here, not months.”

According to PWC research, roughly 70 percent of insurers’ IT budgets were still being spent on maintaining legacy technology, pre-pandemic. Despite numerous declarations by institutions that they’d embraced change, clearly real transformation was a long way from happening. Providers like Instanda, which offers a no code, end-to-end digital solution for insurance carriers, distributors and re-insurers, are poised to help insurers turn the ‘digital theatre’ they’ve been engaged in for years, into reality. And Instanda is offering every pathway it can to get them there.

It was the first insurtech covering all insurance lines to offer a code-free product design platform using an API framework to integrate with insurers’ legacy systems, reducing product configuration from months to days. It chalked up another first when it integrated with the Microsoft Azure Marketplace.

In November, Instanda launched its own Integration Marketplace for back office solutions. This offers insurers connectivity to more than 200 pre-integrated business solutions, giving insurers a cost-effective way to shortcut a complex legacy system upgrade. Among those already onboarded to the marketplace are Salesforce, DocuSign and Xero.

“The Integration Marketplace is where Instanda is pre-integrated with technologies that insurance companies might want to use, including various CRM platforms, general ledger technology and others,” explains Instanda’s head of solutions, Gari Gono.

“We’re not trying to build all the functionality within Instanda. We appreciate there are many other things that insurers need to do. But the focus has been on trying to tackle problems for insurers, to reduce the friction that they have when interacting with all these other platforms, and reducing project time, so that we can increase time-to-value for them.”

The marketplace will expand in 2021, giving clients access to an even wider range of leading business solutions in one place.

“What makes digital transformations involving legacy products difficult, is you’ve got one product where absolutely everything is baked in. So, the moment you say, ‘I’m going to do a digital transformation’, you suddenly have to replace absolutely everything,” says Gono. “Our Integration Marketplace makes this easier by enabling companies to break their problem down into smaller chunks.

“If they just want to replace their policy administration platform because they’ve got Salesforce for HR or CRM, Sage for accounting and other platforms doing various things, they can just replace that one thing and integrate the rest.

“Something already on the marketplace could be up and running within a couple of hours of testing; if it’s something we don’t have yet, it’s a few days for us to add a platform, assuming it has integration capability. It’s about figuring out which platforms do specific functionality best,” he adds. “Then, looking at which works best in an ecosystem.”

Transformation should be about gradual replacement, he continues.

“There’s enough evidence in the market of big bangs not working and wasting money. So, bringing legacy technology into the new world should be gradual, and Cloud-first.”

It would be wrong to think that Instanda’s solution is all about legacy, though. An API-first approach to building an ecosystem is as helpful to new entrants.

“We make it really easy for newbies to enter the marketplace and start their own MGA or brokerage, for example,” says Gono. “They can have a sandbox, do tests, get a test licence, then quickly start to build their insurance product and ecosystem. Although this capability is relatively new, we have clients that, starting as MGAs, used Instanda as their core platform and developed their ecosystem around it. We’ve got MGAs running their entire businesses on Instanda, one of which grew from a £2million book of business to a £40million book.”

Instanda was developed by professional insurers for professional insurers, to take products from concept through to the customer interface, connecting all touchpoints across its platform.

“Insurers should be able to just take the technologies out there that perform different functions well, to help them run their businesses,” says Gono. “Insurers should be focussed on meeting regulatory requirements, serving their customers and protecting people’s risks, not worrying about technology. It’s there to support the insurance industry and ensure that it’s covering risks correctly – and profitably.”

built-in cover – the future?

A key characteristic of the Instanda approach is that it’s completely agnostic about which distribution channels an insurer might choose to use.

“It will depend on individual strategies,” says Gono. “For example, credit card insurance might be part of a distribution model where the customer doesn’t need to know who the insurer is.”

On the whole, he tends to subscribe to the view that insurance brand should come second to the product and the customer’s experience of it.

“The reality is that, while insurers might want to remain at the forefront so that we know their names, customers don’t really want to think about insurance unless things go wrong,” he says. “I’d be quite happy if I bought my PlayStation 5 (PS5) and the retailer just told me ‘by the way, it’s sorted – if it ever breaks, you don’t have to worry about it’. I don’t want to think actively about how my PS5 might break, and what I would then do!” he says.

Not only does this integrated approach to distribution result in a much better service to the customer, but it also opens up endless possibilities for insurers to expand their business through partnerships.

“Technology needs to enable insurers to distribute in whichever way they want,” says Gono. “Our end goal is to ensure technology becomes a commodity so insurers can focus on product innovation, customer-centricity and delivering what people need.”

This article was published in The Insurtech Magazine #05, Page 18-19