ERGO Digital IT: disruptive technologies for the digital transformation of insurance
Amid the industry’s rapid and exciting changes driven by disruptive technologies, German insurance firm ERGO set up an IT unit dedicated to pushing the technological enablement of its digital transformation: ERGO Digital IT. “As my boss says, ERGO Digital IT is seen as the tip of the spear,” says Joe Lapierre, Managing Director and CEO of the unit. “We are the agile and technology facilitators of the digital transformation.” The unit currently has offices in Berlin and Warsaw, and was devised from the ground up to augment ERGO’s operations with technology. Its operations are closely entwined with all other IT entities within ERGO, and its projects are driven by colleagues across all disciplines, sites and expertise. ERGO Digital IT was equipped with the full range of skillsets to make a success of its endeavours, including designers, engineers, developers, program managers, testers, DevOps, cloud and product owners. ERGO Digital IT has been instrumental in supporting its parent company to remain at the forefront of the industry as technology becomes increasingly vital in meeting customer needs and expectations. “What we’re trying to do is add a digital ecosystem where there’s a host of reusable assets that can be leveraged independent of where you are, which language you speak and which technology you’re currently running, to accelerate the time to market and make smaller ERGO entities more competitive,” says Lapierre.
From the outset, Digital IT has been given the flexibility and dynamism it needs to drive digital transformation at ERGO IT in the most effective way possible. “We were set up in Berlin and Warsaw on purpose, in order to be able to attract talent here,” notes Lapierre. With both Berlin and Warsaw, ERGO Digital IT’s offices are located within two of Europe’s most active and exciting tech startup scenes. Lapierre has been involved in fostering positive development of startups in both Asia and Europe, having worked and mentored multiple fintech startups in Hong Kong prior to his current role. “I try to provide guidance, direction, practical common sense and sometimes just motivation,” he says. “The Tech Stars Berlin Programme, that I personally support, runs a mentorship-driven accelerator which provides startups with feedback and helps them to focus on what they’re aiming for, what they’re trying to implement, who their audience is and how they engage with their customers”.
“I also encourage startups to talk to other startups,” Lapierre adds, crystallising the benefit to ERGO Digital IT of having someone at the wheel who takes it upon himself not only to nurture tech startups but to glean ideas and inspiration from some of Europe’s most innovative minds. “I’m a practical, common sense digital person,” he explains. “You don’t want to get too carried away with new technology. You need to look at it, blend in the new with the old, and make it practical. Don’t go too far off one way or the other and keep a level head on your shoulders when you’re integrating newer insurtech or fintech solutions into your IT environment.”
This mentality has been vital to Digital IT’s key focus when considering and developing ways to drive ERGO’s digital revolution. To facilitate a smooth transition from legacy platforms to modern solutions, IT has created an application programming interface (API) factory to make the back end less dependent on old tech and drive it towards the target architecture. Amidst this change, the foundations have been laid for flexibility in the future. With a security driven cloud strategy that is closely aligned with compliance to GDPR and consumer expectations of data protection, ERGO Digital IT has used Kubernetes software to run containers within the system. “Kubernetes keeps a lot of our workload portable, creating silos where we can reassign content relatively easily from place to place,” Lapierre says. “If we decide to switch between providers in the future, that will be easily done. It also helps us to stay elastic between cloud and on-premise solutions.” In itself, these actions unlock enormous opportunities for improved operations. ERGO Digital IT has devised its own distributed data hub where its data sets are combined to provide a comprehensive view of the customer. “The customer expects us to communicate with one voice, being aware of all interactions the customer had with ERGO through all channels, and being able to access all data on contracts, address etc. from every point of contact. In short: the customer wants the best, most convenient and fast access to all his or her data and speedy answers to all questions. We pull all the data from multiple sources into a single repository to enable this,” says Lapierre.
To utilize data more efficiently for the customer and also to lighten the work load regarding repetitive tasks, ERGO Digital IT also supports initiatives within ERGO to apply AI and explore machine learning. “We’re looking into things like speech-to-text where you can receive a phone call, convert that to text automatically, and then analyse it to provide better service to the customer. If it wasn’t a sale, what else could the customer potentially want? How can we service the customer faster or more easily or reach out to them in the future?” AI-driven automation has already taken effect for certain internal processes, enabling the firm to unburden employees from basic tasks. ERGO Digital IT works closely together with other IT entities on these projects. “One business had approximately 100 people who were classifying emails as they were coming in, and that is now achieved through an algorithm which allows the AI to do the job and reroute them directly,” says Lapierre. His AI ambitions for ERGO Digital IT do not end there, however: “We are using Amazon Web Services (AWS) with Hortonworks to create an entire AI platform which will allow us, like the distributed data hub, to take, modify and utilise that AI learning for other projects.” In the back office, robotic process automation (RPA) is also being leveraged to free staff from repetitive tasks. “ERGO has about 13 different RPA back office processes currently in use,” says Lapierre. “The AI-driven email classification didn’t fall into the RPA category because it was more logic based than it was just repeating existing processes, but simple things such as calculating commissions for an agent or broker are where we have applied it. As part of our straight-through attempt to digitalise everything, there are certain steps along the claims process that have had RPA applied to them with a view to gradually automating the whole process.”
This incremental application of technology is in keeping with Lapierre’s practical and measured approach to transformation, which is again found in the firm’s internal change management. “We have a lot of people who have worked at ERGO for over 20 years that are experts in their areas, and we cooperate closely with these strategic business people,” he says. The agile approach to transformation within ERGO IT overall has seen considerable success. “We increasingly work across all business units, IT specialisations, locations, adapt new technology and have changed our role within the corporation considerably –IT is a driver of business development.” This positive shift is emblematic of the success of ERGO Digital IT since its inception, with Lapierre at the helm. Appreciating the difference between what can be done and what should be done has been crucial to the success of ERGO Digital IT’s operations as a digital transformation facilitator. With the groundwork laid for continued flexibility and clarity, this success is well set to continue on its upward trend.