CIOs becoming COOs is a natural evolution and the additional responsibilities is a natural evolution for business, says Richard Warner, now COO of insurance and financial services provider LV=. Warner stepped up to COO in February of this year having been CIO of south coast based LV= since January 2011.
“The role been broad for a while, I picked up human resources (HR) last year,” Warner tells Horizon of how he has been moving towards an operations role. “I have technology, supply chain, property, HR and strategy support, so it is a broad church of activity.
“The balance of my time was on the strategy and the technology that will leverage the strategy. As I am a member of the executive leadership committee it is about developing the evolution of the business.”
As CIO of LV=, a role he took on following a 20 year career with Accenture, Warner created a department of the CIO, with CIO standing for: Change, Innovation, Operations. Warner and his team not only operated the technology LV= uses, but also the procurement and buildings portfolio.
As COO and as an executive committee leader Warner said the focus for he and his team is less about operating technology as understanding how technology will impact the mutual insurance business best known for consumer products such as car and household cover.
“We are developing a renewed purpose around what our strategic themes are and how does technology play a role in that,” he says. Some major technology delivery continues to be part of his role, LV= is making a significant investment in Guidewire, the insurance business process technology provider. Warner says Guidewire will provide the foundations for a series of digital channel developments and his team are supporting this piece of work.
In November 2016 LV= recruited Jonathan Mansley as Head of Digital Strategy and Proposition. Mansley joined LV= from market rivals Aviva where he had held a number of digital roles since 2007 and had previously been with bankers MBNA in a marketing role.
Warner describes recent recruitments to LV= as the business “recruiting a team that get the way the economy and society is changing”.
Insurance is a sector that is ripe for disruption and a number of entrants are challenging established players like Aviva and LV=. Here in the UK Neos has an Internet of Things (IoT) offering as its founder Matt Poll recently described to this title’s podcast and events. Root is a US startup that offers Tesla drivers lower insurance if they use the autonomous Autopilot option more. As autonomous car technology increases and trickles down from luxury brands like Tesla it could be a disruption to insuring young drivers who are a high risk. Warner sites Lemonade in the US, a home insurance provider that uses mobile phone cameras to increase the speed of the claims process and believes that making a claim by camera will increase the honesty of the claim maker and lower the risk to Lemonade, which then pays its annual surplus to charity rather than increasing profit margins.
“We may have to give up some things that we have held dear for a long time,” Warner says of how cultural values of established players will have to change in the face of Neos, Root and Lemonade. As COO Warner says he will be focusing on “what is our revised purpose. We will reinvent our business to reflect the way our customers live.” Warner has always been a business technology leader that looked beyond the horizon and has spoken at this scribe’s events about the impact of autonomous cars and in this interview said he and LV= were considering how artificial intelligence (AI), robotics and machine learning will change customer behaviour and the operations of an insurance business. Warner says that as a mutual business, the ability to adapt to changes in society is easier than for large publicly owned insurance providers.
“The design of the product and ultimately the way we run the business will change,” he says.
Warner has already taken the senior leadership team to Silicon Valley to see how disruptive technology will be to their sector. “It is an industry backed by billions in capital and if they see a problem, they will solve it. We met an MIT and Yale professor who was on his seventh successful startup,” Warner says. LV= met firms pushing the boundaries of data, customer insight, AI and wearable devices.
Warner has also been working with Fluxx and Cluster the product development and SME introduction businesses. “It is a helpful alternative to doing primary research yourself all the time,” he says of working with Clustre.
“We will have to move at a different pace and get the business to flip from ‘how do I make the carriage go faster?’ Instead to ask themselves ‘how would you think differently’ to solve problems, because if you don’t someone else will. Then it is how do we re-tool the business and build new capabilities and develop new leadership capabilities, so the HR bit of my COO role is very useful,” he says of the culture change.
On new leadership skills, Warner says business and technology leaders in insurance will need to “balance risk in their heads, as the speed that business moves at will be very different.”
LV= has already been in a position to benefit from disruption and invested in Wealth Wizards, a robo-advisor service for customers that need advice on how to invest their pension income and a low cost alternative to an independent financial advisor (IFA). “Mortgage and pension are two of the biggest financial decisions you will make,” Warner says of how LV= sees technology disrupting the big chapters in life.
Through its relationship with Fluxx LV= has begun a more test and learn culture and, with Fluxx, it has created test websites for new product ideas to see how the customer base would react and has been pleased with the results.