NTI CEO Tony Clark sheds light on how the transport and logistics insurance business he leads is innovating to stay ahead of industry disruptors, and how people are still very much at the centre of technological changes.
The insurance industry has been a stable, cornerstone sector of the economy over centuries but, in this age of disruption, it too is innovating and changing. Data is king in modern business and the introduction of artificial intelligence (AI), machine learning, and robotics in all sectors is changing how people work, and the insurance industry isn't immune.
NTI is the market leader for insurance of the transport and logistics industries in Australia and its CEO, Tony Clark, shared his insights into how the market and customer expectations are changing, and how his business is staying ahead of new competitors.
"The business environment in our sector is extremely competitive and always has been," he said. "There are always different entities trying to enter the market in different niches.
"There are some players in Australia that are already presenting easier, simpler, ways of distributing insurance products or taking out cover. We’ve got examples from overseas, like Lemonade, that are all app based and allow people to take out traditional covers, but also covers that insure something for a very short, limited amount of time.”
Apps making insurance simpler and easier
"You don't need to be a major global player to develop apps that make it easy for customers and brokers to take out insurance," Tony said.
"We started in the app space for service delivery, so a person who calls for roadside assistance can follow the progress of the specialist who is coming out to help them via their app. Then we moved to online sales through our website. Now we understand how people want to interact with us digitally, we can start developing solutions that will allow people to purchase and self-serve online.”
They say top executives don't plan for market conditions, they create them. That seems to be the case with NTI's leadership. Over the next 10 years, Tony expects NTI's investment in technology and its people to produce some game-changing innovations.
"There’s going to be more photography used in applications and claims. With some of the telematics on vehicles now, we can tell what G-force was in an accident, so we can potentially get a really clear picture of what caused the accident. So assessment of accidents will become more accurate, repairers will know immediately what they need to have on board to repair a vehicle. This will ultimately lead to a seamless flow for customers and less down time for transport businesses."
One of the biggest shake-ups in transport history is on the horizon, Tony said, with the development of automated and semi-automated vehicles.
"Driverless vehicles and driverless trucks are what everyone is talking about, and it’s true they will come in and affect what NTI does in the transport and logistics sectors. There's an example in the U.S. called Peloton that allows multiple semi-automated trucks on highways to drive behind another truck that’s driven by a person. They are saving money in fuel and maintenance, and they’re also safer.”
For many people, the thought of driverless trucks leads to assumptions about huge job losses. But Tony said he was buoyant about the growth of the transport industry and its demand for insurance.
“The freight task in Australia is going to double over the next 20 years because everyone wants their local 7-eleven restocked twice a day; online sales are increasing, and so freight is increasing to get those goods to people. Any innovation is going to need to reduce the number of trucks required on the road to meet that increasing demand and you can’t do that with just with one method of delivery. So it’s an exciting time, and we think the sector is going to continue to grow.”
As the transport industry transforms, so too must the insurance sector servicing it. NTI is transforming with technological innovations but it’s also expanding its service delivery with the aim of improving safety.
"With the doubling of the freight task, we will look at what other services we can offer business operators,” Tony said. “We’re involved in the safety agenda, we want to work with tech companies and look at what safety innovations they can bring into trucks, and we also want to work on safety culture within organisations. You can have every bit of technology there is but until you have a safety culture, you won’t see improved results.”
NTI's investment in innovation, and the people creating it, is where this business is making a big play.
"Data is king," Tony enthused, "so we’re employing more and more data scientists to take away the decision making processes that aren’t necessary. More and more companies are investing in that but we think that because we are in a niche market, we have extremely good data to take advantage of. And the better your data, the better you are at developing something that’s actually going to make a difference.
"For example, we had university students come in who had access to several years’ of our data. We asked them to look at it with the information that comes in during the underwriting phase and tell us what the likely claims outcome would be. They were able to write algorithms that predicted, with 94-95% accuracy, what those claims outcomes would be for a particular sector of business. We then gave them 10 years of data, and they came back with similarly impressive results. So what we’ve developed is a process that has actually reduced the number of policies referred for manual review by 40%.
"Those algorithms are learning all the time, it’s essentially artificial intelligence (AI), so we will get more data and a greater understanding of what matters, and what doesn’t matter, in terms of taking out insurance. That will allow our people more time to actually talk to customers and deliver service, rather than non-value-adding tasks."
Leading people through transformational change can be a significant challenge for businesses. Particularly when new technology is implemented to do the work formerly done by people, staff engagement and turnover can cause problems. But that's not the case at NTI. Tony said NTI was investing in its people so they could lead the business though change.
"We want everyone at all levels of NTI to be leaders, not just those who have leadership titles." he said. "We put our existing and future leaders through Executive Central's leadership program to give them the skills to deal with changing circumstances, where in the past they may have . . . not so much disagreed, but not understood the strategy or not wanted to promote the strategy. Working with Executive Central has really changed the way our people take on these leadership roles."
Those changes have seen measurable improvements in bottom line results and staff engagement scores.
"We do engagement surveys as one of the measurements of our people and leadership," Tony said. "When we started doing those we were good, but we wanted to be better. That led to the leadership development program. Since its introduction, all of our financial results have improved, as well as our service levels.
“Now we’re using Executive Central Coaching Academy for leadership coaching because we want our leaders to be coaches within the organisation who can bring along the next level of leaders. Rather than saying ‘you do this my way’, we want our current leaders to coach their people to get those desired results using their own strengths and skill sets. Our leadership program is also showing those future leaders a pathway, and that has worked really well for us as an organisation.”
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NTI CEO Tony Clark talks about innovation, disruption and organisational transformation in the insurance, transport and logistics sectors. He tells us how the business he leads is innovating with technology and process and how people and leadership coaching are still at the centre of technological changes.