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PegaWorld iNspire 2023: Drive Profitable Growth in Insurance through Future-Ready Technology and Operations

Insurance is facing unprecedented disruption. New risks (eg: climate change, pandemics, cyber-attacks) have increased uncertainty. Customers question the value of insurance and demand better engagement. The ongoing tech revolution is enabling new solutions and services to mitigate risk. Insurers must reinvent the enterprise and transform their operations to stay competitive. These transformations are a path toward creating a better relationship with customers, taking cost out of core operations, and gaining a competitive advantage. In this session, Insurance Leaders at Accenture will discuss how Insurers can expand their offerings and power their organizations with future-ready technology and operations.


Transcript:

- Thank you all for coming today. I hope you've had a great time. I wore my Accenture purple and also my Vegas $500 chip purple. So if you don't have any of these you need to try harder. But hopefully you're having a great time and enjoying the session. I am gonna talk to you a little bit today about what we call future ready tech and ops and we actually really kind of move it into total enterprise reinvention. I'll talk about how those two things fit together, but really it's about how we're seeing high performing companies really drive business value and operational effectiveness at the same time. I'm Cindy DeArmond. I am with Accenture. I'm responsible for our insurance practice across North America. I also work at a lot of our large clients and I've been doing consulting and working in the industry for 40 years. So I do actually understand these problems I'm talking about. Had to deliver many of them myself and that's what I do with our insurance partners today. So what I wanna start with is a little bit on, I'm gonna take you through the agenda. So I'm gonna spend a second on some insurance trends. You're all industry people. I don't think we need to go into a bunch of depth on that, but I just wanna set a little bit of context. I wanna talk a little bit about what we mean by total enterprise reinvention and then go through a framework that we've developed to help our customers get through this process and what we think is the most effective model. And then I wanna talk through a little bit of some survey results that we found when we talked to a number of C-suite executives on our total enterprise prevent study. And then I'm going to invite Jill Baker to come up and we're gonna have a chat kind of about the findings and then we're gonna open up to you, so save good questions even though I can't see anybody but lights. We're gonna be having some questions at the end and there's some mics out here for you all. So first, as we get started, the insurance industry has been resilient. We know that. And everyone's talking about it. Three years ago before COVID, we were at a pretty decent spot. There was a huge dip, we've recovered. We've recovered better than before. And I don't think that's stopping. What we know is that the insurance industry is resilient. Risk isn't changing, demand's not changing, but customers are getting more demanding. They're looking for more, they're looking to pay less. So this puts us all in a unique situation on how do we respond to those demands. The next thing I'd hit on the industry, but on from an industry perspective, kind of non-insurance. But what's affecting our industry based on the economic market is we have some headwinds and some tailwinds. So while we are doing well, we're getting more premium in many cases, rates are going up. We're also facing a lot of challenges with supply chain, inflation. They're also going up and causing a dramatic impact. COVID, weather, et cetera. One of the things I think about when we talk about these trends and these headwinds and tailwinds, think about COVID. And I know everyone's talked about COVID, so I apologize for one COVID story. But when COVID first hit from an insurance perspective, everybody started working from home. Nobody was in an office. We were trying to figure out who had coverage. How do we find the right words? What contracts do we have that had the language? What kind of capabilities did we need? Nobody knew if we had pandemic coverage or not on their policies. If they did, they didn't know to what degree. They didn't know what part of the country. Then we have workers. A hundred percent of our workforce working from home for a period of time. So workers' comp, we now have new exposures that we never had before. We've got people working in completely on their patios, on lawn chairs, answering phone calls. So we had a completely different work environment. And then we didn't wanna send bills out. We didn't wanna send late notices 'cause we're in COVID and people can't get to the office. So, how do we do that? How do we turn off our billing platforms to not do this? We were faced with all of these changes and requests for change and we did it. We dealt with all of them. At no time in the past have we dealt with that much change in a short period of time and consistent, it was consistent. One thing after the next, one thing after the next. I think we all got a little addicted to it. Then all we get kind of past COVID and we're like that old portfolio of projects we had sitting around is no longer interesting. What do we need to do next? We've already been rolling out change, we've been making big impacts. What do we need to do to keep going? So we did some research on this and we've done talking to our customers, doing research across the globe and looking at the fact that we've been faced with unprecedented challenges. No question. We've seen more disruption in the industry threefold what we've seen. In the prior five years, the work was pretty flat. So we've seen a huge amount of disruption and we've seen a lot of companies that have actually risen to the challenge and taken on some real large transformations to be able to adapt. A handful of companies have systematically and quietly gone and done business transformation, operational transformation, technology transformation at the same time. We really call those reinventors. And our findings only about 8% of the companies that we've talked to are in that bucket of reinventors where they're doing it all at one time. The majority of our customers are what we call the transformers who are leading transformations through technology. So, technology is gonna be a leading force. We get that. Technology is still the driver. and that's how they're driving transformation. What we believe and why we talk about this total enterprise reinvention is that the transformers are migrating and about half of them are already starting to say they believe they need to transform to a total enterprise reinvention mindset and not just technology. The same technology for transformation purposes. So when we look at all of that, we came up with this concept of total enterprise reinvention. It is a framework, it's not a magic solution, but it is a framework that I want to talk you through. It's really about having a deliberate strategy that helps set a new performance frontier for insurance companies. So this is saying that you're gonna have, talk about an ambition with your entire organization. You're gonna set an ambition, you're gonna set an ambition for a new performance frontier. That is not we're gonna be 10% better than we were last year, or we're gonna consolidate some of our infrastructure or move to the cloud. This is setting a new agenda about being resilient, about constant change and about being on the forefront of having the next frontier, so that you're ready as the next kind of round of changes come, and you're ahead of it. I use an example all the time of progressive. They were a customer of mine a long time ago at the beginning of COVID they were already taking rate increases when nobody else was in personal auto. And they were taking rate increases but they were also adding in new services. So they were adding new capabilities like here's a Credit Karma app. If you buy insurance with us, make it free. So they were taking increases, adding services and they're at a spot right now where they're kind of really doing really well and the rest of the market's like, "Oh my God, inflation, supply chain. We've gotta get all these rate increases done. We've gotta do this spike in this increase." So I kind of look at it, it's like they, whether they knew it or not, they were kind of already starting to think about how we get on the agenda of adjusting technology, business operations, how we operate, how we offer services. So I kind of think about that as just making it a little more tangible for a second. But in this case, this is really about making the whole enterprise working towards your new ambition at the same time, okay? So companies who have the characteristics of total enterprise reinvention are really six different characteristics. One, reinvention is the strategy. It's not just what you do, it is the way you talk about it. It's an ambition you set. It's how you hold people accountable. Executives on down, everyone understands we are doing, we are reinventing and we're gonna be in constant reinvention. We're not setting a plan for three years or we do cost takeout for three years and then we go see what we're gonna do in the business. This is a constant change. Reinvention goes beyond benchmarks. I mentioned this a little bit earlier. This is about thinking about the art of the possible and how is that part of our new normal. Not a whiteboard with sticky notes. Is it how that part of our new normal and our new plan? It is a different way of working. But it does create a new level of performance that you didn't expect. Reinvention is boundaryless. And we say this as what we mean is we have to tackle the problem end to end. And I'll go into this picture that we have this performance kind of new horizon in a minute, but kind of talks about we think you have to have all cylinders working at the same time and everybody kinda says we have business priorities and IT priorities. This is really about blending and making sure we're addressing all of those at the same time. The digital core has to be a primary source of your competitive advantage. This means you've got the basis where you're cloud enabled, your data AI strategy, you've already kind of built that into the basics and it is something you do. We're not just talking about how do we go digital. You already are digital. You have digital at the core. It's how do we drive capabilities and operational efficiency. The talent strategy, I think this is super important and I'm sure many of you feel as I mentioned this on the, I was on the page before, the talent shortage is real. It's not getting any easier. I think every single customer I've talked to in the last five years has had the same problem and it's only getting worse. But total enterprise reinvention is about building your talent strategy and your workforce workforce into your transformation agenda. Not let's go figure out what we're gonna do and then what do we need to do with our people afterwards. But as I'm transforming my underwriting solution, I'm transforming technology. How do I think about what my workforce is gonna look like? Are we still gonna bring in apprentices underwriters as we used to or are we gonna start training underwriters differently? Are we gonna build underwriters that are digital underwriters of the future? How do I think about that as we're going through the whole process and not at the very end? Change management is an element of the transformation journey, not an afterthought. And then finally, reinvention is continuous. It is not a one-off. It is something you do all the time and it is something people are continually talking about. And I think this is hard for some executives 'cause we like to kind of have a target on the board that says we're gonna do these three things and we're gonna check 'em off and show that we did them. This is a different way to start communicating and sharing your ambitions to get people comfortable with change is okay, let's just make sure we understand how it fits in our big picture and our ambition and make sure our ambitions adjusting with the market. Okay, so hopefully that sets some context of what we mean by total enterprise reinvention. If you're nodding I can't tell, so I'm assuming yes. Okay, so with that we've kind of developed this framework. We kind of call this the next performance frontier for insurance. So the way we think about this is really all those things I was talking about, the characteristics of a company. This is really what your plan kind of looks like. If you think about this framework as a value chain for an insurance company across the bottom. So you've got distribution, underwriting, products, claims, kind of across the bottom. What we're talking about is that you are enabling your business through the technology, through new platforms, through capabilities that are required for you to continually evolve your products, your services, your underwriting capability. You're using AI, you're embedding it in, it's not a POC, it's not something that's done in the room. AI is part of your DNA, it's what you're doing all the time. The same thing with claims. We're doing full claims transformation, we're making sure that we're bringing AI into the claims system, into the claims process, et cetera. So there's full transformation, making sure you're unlocking all potential value that you can from your base kind of capabilities in the value chain. This is a little bit like table stakes but it's hard to imagine kind of doing them all and thinking about what do you do next with those three. So if you think about those as the table stakes of the building blocks, then you're saying as I'm doing this transformation and these capabilities, how am I rearchitecting my workforce? How are we thinking about what it's gonna look like? How are we gonna build skills in the future? Are we using metaverse to do training in the future? Are we doing onsite? Are we going to make everybody be a digital employee? How is that gonna work and what does that look like from our practices, the way we manage our people, the way we reward our people, the way we set targets. The whole transformation has to occur at the workforce level, not just the technology and capability. And you're bringing in new technology, right? AI and GenAI, we've talked about it more in the last month, three months than most things. But that's going to drive a new workforce requirement. GenAI is gonna require new technology, people, how you have your prompt engineers, et cetera. Also working with GenAI, it also requires how you write your business processes. Your business processes really aren't that effective in GenAI unless they're written in a way that GenAI can take advantage of them. You just don't take the old and roll it into new technology. So these new capabilities when you're thinking about unlocking the value, require this workforce and require a skillset change to be able to effectively do that. And I know we all do it. We say we do it at the end. Can't. We're saying you gotta start doing it at the beginning 'cause it's how you actually get the value. The next layer is really about reinventing the offering. What we really think is that there needs to be an element of focus on what is the new products and services or how are you gonna operate in the market that's not just about indemnification of the past and how fast can you pay a claim and how well did you pay a claim and was it automated or automatically deposited, but how did we avoid them? What capabilities are you focusing on for your company to be in the next performance frontier? This is the chance for you to set an ambition, right? This is what we're talking about, not just a little bit better than before but what are you doing that's going to help keep flank claims from happening? What are you gonna be in the risk mitigation business versus the indemnification business? How are you gonna be proactive sponsor for your customers? And creating new products and services that they need at point of sale. We've had a lot of studies that customers talk about this. We want to have our products embedded, we want it through the whole value chain. We want them to be nimble and available. This is what we need to do as insurance companies moving forward is be more reactive to that. And the activating the brand purpose. This is really saying taking a unified brand experience. Not just focusing on how do I use digital, how do I use marketing? How do I use CRM or Pega next, how do I get not just get somebody in the door but how do I take them through their entire journey in a personalized experience? Get 'em in the door, get 'em the right services that they need at the right time. Give 'em the right offers, give 'em the support all the way through the whole life cycle. And then how do you communicate your brand's promise and commitment based on your new ambition? How are you going to market? What are you doing in the market to say how you're responding to this? 'Cause that matters. Brand purpose matters to people. It's how you're gonna get employees in the future. It's how you're gonna reinvent your workforce 'cause your brand purpose really matters. And then finally the seek and scale new growth. So with all of these levers that I kind of talked about, these building blocks, kind of the this final top of this horizon slash cake is creating ecosystem marketplaces. We really believe the way you're gonna scale of the new capabilities that we're unlocking through this process and new products and new services is ecosystems. It is effectively engaging with partners, it is distributing through partners, it's leveraging partners to provide services that maybe do it better than you do. It is engaging in a distribution mindset that you might have not been able to have before. How do you get to the market with new channels? We believe the ecosystem marketplace is the way you're really gonna scale and grow in the future. Whether it's just with your new products or your old, but it's the whole way through. And we do that saying like I mentioned earlier on a digital core. So cloud-based AI security, operational, et cetera. And we believe that a component of strategic resilience and ESG is also kind of critical. So also been talking about sustainability. So we wanted to make sure that was pulled into this process. So maybe that is a part of your new performance frontier or your ambition is you are leading the charge on how we're going to be setting standard for sustainability because there's a pretty open market right now that there's gonna be a pretty big impact in insurance. And so kind of waiting to see who's gonna be the first set of carriers that start to drive and have a brand purpose around ESG and really wanna make an impact and help others follow to do the right thing but also have awareness of what's happening with your customer base, 'cause you'll have to know that eventually as well. Okay, so this is the performance frontier. Hopefully that made sense. I said talk about total enterprise reinvention. The market is changing, industry is changing. We believe insurance companies specifically need to really focus on setting ambitions, continuous change, reinvention if you will. And not in the silos that they were in before to truly drive impactful results. And we've seen this in a handful of companies that have already embraced it and we've seen a lot of companies that have said I see the value of that and I want to get there. How do I start to get there? And this is the framework that we would work within. We also talked, we also looked at a survey. So I mentioned before the framework came from surveys, it also comes from talking to our clients. We did a CX survey across 1500 people globally across 1500 executives globally. 100 of those were in the insurance industry and about half of those were in North America. Okay, so I just talked about big picture, what we know insurance companies are doing. So we're doing it with them and what we think they wanna do. And these survey results are a little bit alarming. So I just wanna show you, 'cause I do think this is where we're gonna be focusing on change. So from a reinvention of an insurance perspective, there's really kind of five categories of questions. The first is how do you feel the impetus for accelerated change? Are you worried, do you think you really need to worry about it? Is it part of your plans, et cetera. What's driving you to drive impact and change? How long do you think that's gonna take? What are the barriers and what do you think are success factors? So I'm just gonna kind of go through a couple of these quickly and give you some perspective of what we saw and then I'm gonna bring Jill up to talk about it. Okay, so external forces accelerating reinvention. When this question is asked from this is the insurance view against banking and all other industries 'cause we didn't wanna have 19 here, so it's insurance plus banking and the rest. So external forces driving, accelerating reinvention. Insurance companies say the pace of technology invention is one of those factors which we were not surprised. There's a lot of technology changes happening. We've been embracing that for a little while. We know that's gonna continue and we know it's gonna accelerate. So part of this is being prepared for the acceleration of this change. Consumer preferences is another one that stands out. I found that odd that it was a little bit lower than banking 'cause I think insurance customers have a lot more preferences in banking. We kind of know you're digital or you're not. But insurance we have a lot more demand, especially across personal lines and commercial lines. But they're still kind of in a larger percentage there. Oddly enough, insurance companies weren't like highly rated against supply chain, which I thought was interesting in the economic slowdown, which we have seen 'cause the business is still going. We just had to change different ways of working. Accelerating reinvention. So this was to the, from a competition perspective, do you think your competition is making you accelerate your change? And they were marginally more motivated about competition than the banks oddly enough, but not in a significant way. So just kind of strange, 'cause we generally do respond to competition pretty much in the insurance industry, but this was sort of one that was in the middle. Recession expectations. So if there was a recession, that would dramatically impact transformation. So good news, there's a recession, so we know that's gonna dramatically impact transformation and you can see that's kind of the highest of the group is in the insurance space. So, not a surprise. And then reinvention impact. So, this is a little bit about where do you think you're gonna focus. So in the spirit of reinvention, are you focused on your highest priority is really focused on incremental growth, cost reductions or balance sheet improvements. And you could see they're pretty consistent across all of them and a little bit of lower aspirations in the other industries which is kind of strange because I feel like we see a lot, at least in my experience, I feel like we see a lot of this cost reduction specifically over the last couple years and also focus on incremental growth. But it was still lower than the other industries. So I guess not tragic but just interesting to look at. And insurance companies are a little risk adverse. So our expectation is that they're going a little bit like 18 months out is what they're expecting results and a little lower than the other industries in the shorter timeframe. I do think that's gonna change. I know most of my customers have gone from 36 months as success outcome to 18 months is successful outcome to what can we do in three to six months right now? And how can we do something today? Which is where there's, thank God there's a lot of new technology that's playing in this space where we're able to do this. And I'm sure you'll talk about that from a Pega perspective. So, we now have the capability to drive things faster. The barriers to reinvention are really what you might expect. Technical infrastructure, legacy technology and lack of skills and capabilities. So I wanted to just sort of highlight these things because I do think insurers believe that technology and leadership skills are a great barrier to change. But I don't see that that's something that's easy to overcome, so we're not totally concerned about that. I do think the success factors on this next page is really where the fact where the most important successful delivery and transformation program. So a compelling business case is something that insurance companies, most of us, our customers are really focused on. We're focused on making sure we can tell exactly what we're gonna do and we're gonna talk about what is the right business case and roadmap and how we're gonna bring in our leadership to drive that program. This is one of those areas that I think is a dramatic change that's gonna happen because we always talk on a compelling business case that gotta have my case for 12 months, 18, 36 months. When I talk about total enterprise prevention, can you imagine how long it's gonna take to build a business case that really does kind of play on all those levers. So it's about figuring out how do you set an ambition, how do you set smaller interim goals, so that you can actually achieve something without being kind of caught up in your old metrics. You have to change the whole way you're tracking and working. This was interesting, I think that when we talk about total enterprise reinvention and the customers that I know we're working with that do this, the senior leaders have to embrace this change, not direct it, not put it down in somebody's performance objectives but they have to be involved in the transformation and they have to show how they're transforming the way they measure, the way they track and they report. And I think this is really hard 'cause we kind of really do this really well the second level down, maybe the third level. We kind of never really transform the way this most senior people are tracking and setting the pace for change and setting expectations for program for true transformation. So I think this is a big objective that's gonna be a focus going forward. And I think that's great 'cause I think that's part of that whole workforce component, making it part of each of the transformation programs you do. So in a nutshell, I mean those results I said they were a little bit alarming, 'cause they were like, they didn't scream total enterprise reinvention to me, which is a little concerning because we were seeing the results in the market, we're talking to clients, they're embracing this, we're doing it. But yet when the survey kind of came out it said, we're sort of tracking along kind of how we've always done and we're feeling pretty good about it, which is what we're really focused on is making sure we're working with those clients because we know that's not reasonable, 'cause relative to other industries, insurers are actually seeing less impetus change, which is bizarre 'cause we've had so much change over the last couple years. And they have lower aspirations to change and they were okay with longer timelines like I mentioned and the barriers to change really didn't go that far. So anyway, I think this is the challenge for you all to get off those survey charts and get into the horizon chart about where you are in total enterprise reinvention 'cause we believe it is the way that most carriers and companies across the globe are gonna be actually seeing true financial and non-financial results. With that, I would like to introduce Jill Baker, who is Accenture's North America Insurance Pega lead. And her and I are just gonna have a little chat before we open up questions to you guys if that's okay. Thank you, Jill. That didn't work, okay.

- Okay, it's nice to see everybody. Thank you for coming. You kind of see everybody.

- You can't see anybody.

- I can't see anybody. We can see two people. Okay, so great. So thank you so much for joining me.

- Sure.

- I know you've been very busy with the Accenture booth and kind of making sure everything is going around with partners and ecosystems that we have here. So I'm glad you were able to take some time to join me.

- Glad to be here.

- As you think about total enterprise reinvention and the next performance frontier, kind of how do you see the components of the next performance frontier like being brought to life, especially I guess related to technology?

- Yeah, if you can reflect back to the image of total enterprise reinvention horizon, you saw that the digital core spanned every single dimension of that horizon. So it's an important part for leaders to pay attention to. It's the technology component. And essentially the digital core is about infusing modern technology into every single aspect of your insurance core. And you mentioned it, right? Products, distribution, servicing, claims, operations. But it's more than just automation. We really need to think about a data-driven mindset that drives insights and AI into every single thing we do. I don't think it's by accident that Pega's brand purpose is about AI-driven decision making and workforce, or I'm sorry, workflow automation. The thing you need to think about when you have Pega in your enterprise, other cloud components in your enterprise is how do you create a roadmap that will use those, whether it's Pega platform, Pega CDH, process AI, cloud components to drive value or pull value out of every single element of that insurance core.

- Yeah, that makes total sense. I mean it is the digital core for sure. But AI, AI powers everything right now. Like we talked about it. I think we've also forgot how much AI is actually powering now that we've talked about the GenAI spike. It seems like we all forgot we've been doing this for a while. So like how important do you think that is to the total enterprise reinvention or the?

- It's huge and you've heard a lot about it throughout the entire conference, but I think it's so important for people adopting AI and even if you think about Pega CDH, it's not just about the next best action in marketing and sales motions or in service motions. It's about so much more than that. It must be about so much more than that. It's about orchestrating journeys and transforming experiences by infusing AI everywhere in your organization and really not just for your customers but also for your own workforce, right? And I'll just talk about a couple examples. The workforce example, underwriters are inundated with data. It's just thrown at them on so many different screens and so many backend systems. They're spending so much time on admin type stuff, right? So we need to use automation to pull that admin work away from what they focus on, use AI to serve up insights in the moment of their decision making, so that they're able to make better decisions, improve your portfolio, write more, better business. And then if you think about the consumer, we need to stop thinking about consumer interactions as transactions. Let me complete this transaction the first time, right? Those interactions are an opportunity to capture data every time, to turn that data into insights, to use machine learning and AI to represent yourself back into the consumer's experience and any channel that they're in and interact with them in their moment, in their space in meaningful ways for them, be truly personal. I feel that ChatGPT and other GenAI is really something that if enterprises don't pay attention to it, they're going to get left behind.

- Oh, a hundred percent. A hundred percent. And what do you see the impact on the workforce? Like you're in the middle of a lot of projects and discussions with clients, like how are you seeing, are you seeing the workforce agenda being thought about after the fact still or are you seeing it more brought into the transformation?

- Probably more after the fact than it should be. I mean you touched on this a little bit. This is one of my favorite parts of the horizon because it's the human part of it. But yeah, today's enterprise leaders must understand that their workforce needs help adapting to the dramatic pace of change. And as you said, right, they need to be a part of it. Not just set a direction and performance objectives, but be a part of that change. Leaders need to be comfortable with what technology is going to be doing to their businesses and help their workforce be comfortable. I truly think there's going to be a time in the not too distant future that instead of saying the business and IT, right, are not gonna be in our lexicon. Organizations that continue to leverage very traditional ways of developing software are not gonna be able to keep up pace. It's really important that the every single person in the workforce own their responsibility and accountability not just to understand the business that they're operating, but the technology that's gonna bring it to life. They have to be of equal importance in their own personal responsibility. I started work with a client about three years ago. And one of my main stakeholders had fairly recently joined his organization and he understood this with a passion. It's one of the things he brought to his organization and he's now the CTO, I don't think that's by any accident. But sort of the last thought I'll leave on this point is that so much of the narrative is about automation pulling people out of the process and we need to change the narrative 'cause it's so much more than that. It's not that actually. It's about our leaders in our workforce understanding that this technology, with this technology in place, we need to help change the way we think about skills in the workforce, change the way the skills help us work differently in a different world and we need to embrace that.

- [Cindy] Yeah, a hundred percent I agree.

- Yeah.

- Okay, that's a good point. I was gonna ask you like back to what you were saying about kind of technology across the board. When you're thinking about customer insights and driving new value with the customer insights you're getting, I mean we see that through every part of the business. Even the underwriting decisions that you don't make, even the underwriting declines that you don't make. Like using that data as part of that decision making process or insights for future product reinvention or new offerings or new partnerships. Do you see the same?

- Absolutely. And again, I wanna emphasize it's we need to think about those insights not just in the way we interact with our customers, but like you said, to running your business, right? The way you process claims, the way you underwrite and using those data and insights internally to make better decisions and externally to engage in a way that with your customers that's gonna keep stickiness, you know, increase your revenue.

- Okay, excellent. Well, that was super helpful. I appreciate that. I enjoyed going to your booth and seeing all of the stuff that you guys have built out in PPO and underwriting submissions. So there's some lot of good kind of pulling these things to life and making it real.

- Making yeah, absolutely.

- That was exciting to see. I know a lot of people have done that here. So we are gonna open it up to audience participation. Oh I thought somebody was running to the mic already. She was just turning it on.

- [Jill] Oh

- So open to your questions. Any thoughts, reactions to kind of what we talked about?

- [Audience Member] Sorry, just wanted. Quick.

- Hello

- [Sandeep] Can you? Hi, I am Sandeep. I'm from Tokio Marine HCC. We are mainly working into a specialty lines. So my question is probably for both of you is that how business architecture team can really be instrumental in specialty lines, right? Or any insurance business to drive the transformation?

- Oh, that's a great question. Just to make sure I understood. How could business architecture be involved when you're driving transformation in specialty lines or airlines? A hundred percent. First of all, I grew up as a business architect, so it's my lifeblood, but I a hundred percent believe that it is core. And I've seen a lot of companies go back to business architecture at the heart and business architecture at the core of the business and IT intersections because without the business architecture, all you're getting is individual projects with single outcomes. I think the only way, and it probably should be on the horizon, it's a good point. The only way to really highlight how you're driving the business, the outcomes all the way through the ecosystem in my mind is through business architecture. And it's really, if you have a team of people that actually understand the vision. I've kind of seen places where the business architects become the SMEs who knew all the old systems the best. And I don't think that works. Because they know how to tell you what it does. If you build a business architecture team around people who embrace the vision for the future and what you're trying to achieve, it's where all things kind of align and it's a really good success and you keep those people attached to the vision and the initial like program itself, but all the way through to show outcomes. It's where you really get the best outcome across the board in my opinion. I'll let you kinda respond.

- And it's about change management. That speaks to the workforce, right? Changing the way the workforce works, 'cause it's not just, I represent the business and I can talk to you about how the old platform worked, right? It needs to be about, I understand where we're headed on the performance frontier and where we're going and I can talk about the way I want my business to operate and then rapidly make that happen from a technology perspective, get them involved, get feedback early.

- [Cindy] A hundred percent.

- Yeah.

- [Sandeep] Yeah, thank you.

- Is that helpful?

- [Sandeep] Just one more question about, again, insurance. How in B2B space, right, we could really find a good use case for AI because I mean this, this PegaWorld is focusing on AI really all the way, but in B2B space where with specialty lines are, insurance is being sold with brokerage agencies and it's quite manual or maybe somewhere digital is used for broker portals and all. So I could not really found out a good use case for using AI or GenAI.

- So GenAI, AI in the B2B space, that's what you're asking?

- [Sandeep] Yeah.

- Okay. You wanna start there?

- Yeah, I'm not sure I quite understood the question. Often when you're with AI for in the B2B space, you're wanting to understand not just about that customer but rather customers like you, right? And so you should capture data and insights with that particular commercial customer but also commercial customers like them that you can learn from. I've seen this happen.

- [Cindy] Yeah.

- Where can I take that with this particular customer? I'm not sure if that's where you were going.

- Also just the third party data and services connecting like using AI and GenAI to connect your customers and services they need to other partners. I kind of feel like that fits directly in that ecosystem space that we were talking about in the horizon. There's a lot of use cases up there that we're seeing in making sure that we're getting those. I guess the value of the whole ecosystem related to your customer.

- [Sandeep] Thank you.

- Any other questions? No, okay.

- Okay.

- Awesome.

- [Mahesh] So you mentioned that I'm Mahesh Thomas from AIG by the way. You have mentioned that data is at the center of everything and we are hearing a lot about AI, specifically the GenAI which is new. So what's your thought on a take on the data privacy aspect of it? Considering that we are, integrating with the ChatGPT or like we have an OpenAI ChatGPT solution that they expose the API where the products integrate with, yet we have businesses running across the globe. If you take the example of Europe, GDPR is a big restriction out there, right? What are your thoughts on handling the data privacy when we integrate with the GenAI and the open ChatGPT for example?

- Well I'm gonna tell you that I think it's a great question. So you're asking about your kind of where you guys are starting on your GenAI and you've been on your AI journey, like how do you think about data privacy?

- [Mahesh] That's right.

- I will say I've had a number of discussions. I'm not a GenAI expert, nor am I a data scientist, so please nobody quote me on this. But I will tell you what we've been talking about is figuring out what your use case is first and then what your models are gonna be. I know our COE lead yesterday long Guan talked a lot about that and there's probably a recording available. She went through this in a good amount of detail about how we envision setting up COEs with customers for GenAI. And it's a little bit of a, I think it's a little bit of a mixed bag. We wanna lay out a COE and totally understand how your enterprise is gonna use GenAI, so we can have all the right practices in place and we use the right type of LLMs and we're, you know, either fine tuning or building new models based on your privacy needs but also how long is that gonna take and are you missing opportunities to start getting value with GenAI now in other ways? So I think there's probably a capability where you're doing both. You're gonna be using some open AI type models with some fine tuning, some prompt engineering and then you're gonna be building your own for certain more core processes that really engage your data that you need to keep private. I do think that what we've talked a lot about is this, these GenAI use cases and AI use cases that you can start now very fast that don't have to necessarily be totally integrated into your whole environment and still get value. We recently did something around underwriting submissions where you looking at the total submission value and like pulling it in and rating the broker and prioritizing based on quality and a whole bunch of criteria. Totally separate from your core systems. It gives the underwriter insights for them to know what to go do. That's a great way to use GenAI quickly kind of get practice on it, start building prompt engineering skills without making it being part of your total enterprise. Dealing with that part of it yet. And in other cases we're building unit test cases based off code and developing code with customers, so that you can quickly kind of get some insights and see how to use it. And that's kind of what I think is the best personally is get started in some all use cases in chunks that aren't really exposed, that aren't putting you in a situation with privacy and they give you a chance to kind of work through your COEs. Again, please don't tell a data scientists what I said 'cause they probably have a playbook that's a little bit different, but that's in weekend language as we call it. That's how I would describe it. Does that help?

- [Mahesh] Yep, it did. Thank you Cindy.


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