How does Munich Re lead next-gen insurance? This episode of Lost In Transformation features Olaf Frank, Munich Re's Head of Business Technology, as he opens up about how his work in IT changes the way insurance will be done in the future, and as he explains how Business Technology leverages data and tech to assess risk on a global scale.
"People want what they need at their fingertips, whenever they want it, for as long as they want it. And traditional insurance is not necessarily that way."
How does Munich Re lead next-gen insurance? This episode of Lost In Transformation features Olaf Frank, Munich Re's Head of Business Technology, as he opens up about how his work in IT changes the way insurance will be done in the future, and as he explains how Business Technology leverages data and tech to assess risk on a global scale.
"People want what they need at their fingertips, whenever they want it, for as long as they want it. And traditional insurance is not necessarily that way."
Olaf: (00:02)
We really want to change how insurance is done in the future. And I think that's absolutely necessary. If you look at the, how the world is changing and how innovation and digitalization, IOT becomes more part of everyday life. You see that the traditional business of insurance will change. It will go away. People want what they need at their fingertips whenever they want it for as long as they wanted. And, traditional insurance is not necessarily that way.
Christine: (00:30)
Welcome to the Lost in Transformation podcast series dedicated to the complex world of Digital Transformation. We feature guests from large corporations, start-ups, consultancies and more, to shed light on the success factors around Innovation, Transformation, and adjacent topics.
We share first-hand insights and inspiration from experts for all the intrapreneurs, entrepreneurs and anyone curious about Digital Transformation.
Christine: (00:58)
Olaf Frank is the Head of Business Technology at Munich Re, one of the world’s leading reinsurance providers. As an experienced leader in the field of corporate IT, he shares his work with the Business Technology unit in leveraging data to assess risks and how his work in IT revolutionizes the way insurance is done. We hope you enjoy this episode.
Christine: (01:20)
Hi Olaf, thanks for taking the time to be with us today on Lost In Transformation. We really appreciate it. And you are the head of business technology at Munich Re, which is one of the world's leading reinsurance companies. And, today we want to know more about your work within business technology, how this unit actually came about, how it became successful and also what specific projects you're maybe looking at and working with. So, to start, could you maybe tell us how things worked at Munich Re before the business technology unit was built? What did the world look like at Munich Re?
Olaf: (01:56)
Hello, Christine. Thank you very much for the invite. It's a pleasure for me. Maybe I give you a little bit of background on where we come from, so maybe you have to add, so business technology is part of the global IT function. So, we basically deal with the technological setups for innovation activities and, you know, so business technology was basically implemented two and a half years ago, I'd say. And before that time we, in Munich Re saw that innovation is a key thing for us, and will be needed to shape the future for us as a company for business models. And, back then, the point was that we set out a number of initiatives that we're driving innovative ideas, and we're trying to get to market in different ways, assess risk in different ways.
Olaf: (02:45)
Mostly I would say, based on the usage of digital technologies or new technologies, like drones and the like. And, one of the things that I think was perceived back then was that we were not necessarily well equipped to support initiatives like that. And I think that's very common in bigger corporates, that you do have an IT function. I mean, at least back then you have an IT function that does all the bread and butter business, but maybe you don't feel you get the right support for your innovative initiatives, which would be a matter of mindset, technology knowledge, and then obviously also different ways of driving projects and cutting initiatives out of the door. So I would say that was basically the set up when went from BT and that's where we started.
Christine: (03:34)
So, you realize, okay, you weren't equipped to take on innovation initiatives and so forth. What overall vision or goal did you have when business technology was built in the beginning? Was there like an intention for something that you wanted to achieve?
Olaf: (03:49)
I mean, obviously, you know, what I described as was basically the perception in the company, I would say within it, we wouldn't necessarily have the same opinion, right? Because we felt we had already exposure to all kinds of modern and digital technologies, but it's also a matter of perception. It's also a matter of how you position it. And back then, we basically contemplated the topic quite a bit. And we came to the conclusion that we really need to reinvent it partly and BT was founded as the first step into that direction. So, we wanted to show that we can be quick, flexible, uncomplicated, really driving innovative ideas, and was very high skill in digital technologies, get to success on initiatives. And, that was basically the core idea of when we started the team.
Olaf: (04:40)
So, to do that, we try to, you know, gather some talent from within the company. So we already tried to get some people who were rather technology minded. and also rather innovative and thinking into BT. But we also, you know, try to support the team with more hirings from outside and from other areas and other industries. So, the basic idea was to shape this new unit and based on very hands on initiatives and very concrete cases. We wanted to show that we can make a difference, that we can really play up to the level that we need in terms of expertise and also mindset and professionalism, if you will, to really make a difference for innovative approaches that we have within the company. And that was basically the background that we had when we started.
Olaf: (05:28)
Those were the objectives we gave ourselves. It was very much a let's prove that we are doers, not talkers. So it was, what you could perceive. And most of the innovative initiatives was, they were looking for help outside. They were not necessarily looking for help for the initiatives within the company, within the corporate, back then. And what we try to prove is that on the initiatives that we participated, we really can display this hands on, very result driven and very motivated expertise. And I think we made a good difference in most of the initiatives. So, we gradually grew this reputation of being very hands on delivering results. It was not so much about strategies and PowerPoint presentations. It was not about, you know, lengthy planning processes and like, we tried to be very much to the point and had very skilled and hands on people support the initiatives and details.
Olaf: (06:20)
So we partnered a lot with our internal clients or internal colleagues from the business side. So the teams were basically set up as very closely collaborating teams and with all the different modern ways of developing software, the technologies we use. So, the focus was on together let's share the same objectives. Let's try to become, let's say, if you want, if you look at innovative initiatives and you perceive them as partly driven by a business minded CEO kind of role, and a rather tech-minded CTO role for the initiative, we tried to clearly fill the role of the CTO. So, really drive technology. We actively try to not just, you know, wait for requests and then try to support initiatives technology from a technology perspective, but rather shaped the initiative, because most of the innovative ideas that we pursue to a bigger part, partly even, are technology based. So, it's really a lot of technology play. You can't just passively try to, you know, fulfill a request. You really have to drive also the initiatives and the products that we get out to the markets from a technology perspective. So that was, I would say, the core of what we try to achieve.
Christine: (07:25)
Super interesting. I like the statement of reinventing IT and, you know, being doers and talkers, that's a great angle. And then, after all was set up for this new business unit, what was the journey like? Can you tell us a bit more, maybe what were some first problems that you encountered or how did it all start?
Olaf: (07:45)
As I said before, the idea was to position this part of it as a role model, and then gradually maybe try to get some of the learnings, some of the practices, some of the attitudes, even I'd say, over to the rest of it, because I think that that's what we perceived back then. We need to be much more active as an organization in really stepping up and trying to drive business. And then also rather partly the development of the company and of the businesses that we are currently engaging in. And, as a matter of fact, I think increasingly we see that a lot of even the traditional business, at least more and more are in need of a technological discussion and technological expertise. Also for the, let's say, rather traditional reinsurance contracts that we do, data analysis, and then also technology set ups are increasingly important, even in those areas.
Olaf: (08:32)
So from that perspective, that was where we started. That's what we wanted to position ourselves. Now, when we started, as you can imagine, especially there were quite a number of initiatives that try to break away from the slow complicated, rather process minded, let's say core of the IT function. They wanted to get quick answers. People who are readily available, rather freelance people who live in labs and stuff like that. So that was the original intent. There was a lot of the initiatives we obviously had from our past, obviously some good business, who we knew would work and would be willing to work with them.
We had obviously some colleagues in IT as well, in BT were well respected with good context into the business. So, we basically, from those initiatives, we grew, we tried to grow our reputation that we really deliver, and we really can play expertly on innovative initiatives as well. So, in the beginning, I would say, I was part of a sales process that we tried to pitch our capabilities. We try to kind of repeatedly tell people that we are up to the job that we tried to produce more and more evidence that we can really be successful.
Olaf: (09:33)
And then obviously it's a word of mouth thing as well, right? So, if businesses support you and they increasingly talk in a positive way about your contribution, then that news spreads across the different parts of the company. And that's what we try to drive and increase over time. And, I think due to the very good track record that we could produce, we could really make a difference. And then I think now, on a different position, I think it's the other way round. Most innovators inside the company basically tried to talk to us before they go out and seek help and other places. So that was a good success that we had.
Olaf: (10:12)
Let's say part of the good support that we could provide was that in reinsurance and insurance, at least as long as you are somehow close to the core business, and as long as you are in the insurance area, it's a regulated industry, right? So it's like, you have to fulfill a whole wealth of regulatory requirements. There's a very high awareness that security is important. Data protection is very important. So if we talk to our clients, then in the insurance industry, they are absolutely aware that those things need to be in place. And they also are actively approaching us about, you know, certificates and ways to audit, our operations and the likes and all the innovative initiatives we have as well.
Olaf: (10:52)
So, the point that we learned early on was that it's difficult, but let's say, the difficulty in getting a new product to market or a new solution out or to launch an app is not necessarily in producing the technology. The real difficulty was after you had the first product idea implemented to get through all the different processes. You need to get all the security and compliance approvals to really go to market with something like a new, innovative product.
So, at the end of the day, and that turned out to be a real asset that we could provide from a business technology perspective, because we had very good proximity to the organization, because we had a lot of experience. And in how insurance products and systems need to be run, we were really, I think, well equipped to get all those things created by rather quickly, while the initiatives that came from the outside and had maybe some early on productive versions of a piece of software of an app or whatever, they really struggled a long time.
Olaf: (11:49)
So to get those things really approved for usage. So, I think those topics also added. So, the promise we made was, we help you from idea to cash. So it's not that we just support your innovative idea. We don't just support you until you get to the MVP style set up. We really support you to make money with the initiative, which means that we, you know, get you through all the different compliance and security requirements as well, plus a professional setup for running apps and platforms and the like. So, I think that added a lot to how we gain success and gained a good reputation within the company.
Christine: (12:24)
That sounds like a super successful journey so far already. And you mentioned already some innovative initiatives as well. Could you share with us maybe one or two specific projects or themes that you have worked on or are working on at the moment?
Olaf: (12:40)
Sure. So, I would say, and let's say the underlying, we are an insurance reinsurance company in this way, and the key thing we deal with this data, right? We don't produce any tangible goods. We just produce contracts on promises and we can assess risk. I mean it's kind of very obvious that you need digitalization, that you need the good data management function in place. And so from that perspective, the first thing that the company invested in heavily was in the skills that we have around data analytics, AI, stuff like that. So, one of the key successes I would say we had was that by now, after there's some bumps on the road, we have now produced a cutting edge cloud based Data Lake plus analytics suite function for the entire company.
Olaf: (13:33)
So, the challenge basically is that we have businesses across the planet. And one of the key assets that we perceived early on would be to really make this data available for the entire company, as much as you can, right? So, that's a lot of regulatory requirements and data protection clauses in place, obviously. But nevertheless, you need, as a global player to assess your risks on a global basis, to understand the risks in different areas, and on topics more collectively, and what you need to have is data. This partly is data that is not really readily available in markets. A lot of the data and information we use to assess risk, you can't just get that on the market, right? You can't look this stuff up at Google, you can't buy the data necessarily.
Olaf: (14:14)
It's a lot of our own data that we can use to do those things. So, one of the key things we implemented was the data storage and analytics function that by now, I think has reached a very good level of security and also performance. So, that gradually we managed to spread the solution across all the different businesses worldwide. And that was, I think, a substantial investment, but nevertheless, I think the company learned a lot and we learned a lot in how we provide a solution to all the different businesses. We are still shaping the exact office, but I think I would already consider it a success that we managed to get the structure out, end to end. So, with obviously in close collaboration with our colleagues on the business side, but from a technological perspective also, we learned a lot on that.
Olaf: (14:57)
And I think we've got it in a place in a very reliable and secure way right now. So that's one of the key initiatives we drove over the last two years. So, I think that's a key achievement that we have. And the other thing is, as we call it EXCITE, it's a platform basis for digital insurance services, let me call it that way. It sounds a little generic, and to be honest, it is. What we saw over time when we had so many different initiatives go to market and a lot of different markets, a lot of different lines of business, and as I mentioned, we were increasingly able to support, those business initiatives, but what we saw was that we had to solve same, let's say underlying problems over and over again, right?
Olaf: (15:40)
So you have customer, you have, for example, authentication problems or data management problems, or kinds of underlying technological things, that you have to solve so many times over. Plus we also saw that on the business side that certain digital functions are required, requested, that also we solved, let's say the same problems. Let's take cyber risk assessment or something like that in different regions, in different markets, with different business units in different ways, which then we came to the conclusion that as we growing, let's say portfolio of initiatives, we saw that we keep getting the same requests. And that's when we started to amalgamate, I would say the different requests from all the different initiatives. We try to extract the right digital service initiatives, really a number of initiatives and thereby really reduce risk, reduce cost, and also significantly increased time to market for those digital functions.
Olaf: (16:32)
So we currently, we bundle and excite all those capabilities that we currently use in house and in a lot of the digital go to market initiatives. So, that's a second thing. That's, why the overarching and what we support is all kinds of businesses. Like one of the initiatives we have out right now is in the life reinsurance business, they call it a mirror digital suite. It's basically a platform to revolutionize the processes around life insurance, underwriting. So, so far it's a lot of paperwork with a solution. It's a digital combination of initiatives, of what the client needs, what the insurer needs, what the reinsurer needs. Plus we also have a communication with doctors for certain approvals, the certificates you need as an applicant for a life insurance. We were able to automate most of this process and now have a very good uptake in different markets. So, there is quite a number of interesting initiatives that we drive and support out of this collective backend tech site that we currently have in place.
Christine: (17:32)
Nice. It's super exciting to hear how you build these analytical tools to assess risk and all of that based on data, super interesting insights. And from all of this that you've built, do you have a specific learning or a specific tip that you'd like to share with us?
Olaf: (17:50)
Well, from my perspective, the thing that, that helped us a lot was that early on we focused on real, hands on results. And, we had a clear promise to our internal colleagues that we would support them end to end. I think that helped a lot. So, we try to not talk too much, but we try to do the right things and get initiatives out. That from my perspective was a core. The second thing in building the organization was that we try to really not compromise. So, if you have an innovative, you have limited resources, you have a limited timeframe to really prove that your idea is valid and you can get success. And what you cannot do in a situation that is not have the right people join the team. So, you have to be very careful to only have the best fits people for the respective initiative. And that's what we try to get. We try to not compromise. We try to focus very much on the success of our initiatives. I think those looking back, were I think the two major ingredients that I would say helped us a lot.
Christine: (18:47)
Those are quite hands on tips. And, you've talked a lot about also the successes of the initiatives that you've built. Was there maybe like a mistake that you made, where you can share, okay, this is something to avoid or any experiments that have failed along the way that you learned from?
Olaf: (19:07)
Well, I think I feel the hardest part is to kind of really stop initiatives. So, to stop initiatives was proved to be very difficult and we still struggled with that part. So, to really come to a conclusion that you say, okay, we will not carry on or something that's really hard, because especially in a corporate situation, you have a lot of stakeholders, or mostly a lot of people have invested quite a bit of their time or money into an initiative. So, to really conclude that you will stop now, as it has consequences on a broader level and thereby I think it's a very difficult call to make. What I feel we learned on the way is that it really pays off to look for experienced people in the area of innovation and try to get help from experts, I would say.
Olaf: (19:47)
Some of the initiatives we had benefited greatly from having experienced people who had some, let's say background on founding companies. And, I'm trying to focus on the most important success criteria and really in a very ruthless way, try to get to the weaknesses of your product. I would say all of that is not necessarily corporate style in a lot of ways, because it can be very brutal. It can be very strict and it can be very painful and it leads to sometimes you have to stop an initiative. All those things are not necessarily, that's a common good and the thinking of a big corporate I belief. So that helped us a lot to get, I think, some very good people who supported us and then honing those skills and then improving on our products that I think that that was a learning that I had.
Olaf: (20:37)
And, I did not necessarily see like that at the beginning when we started. So, that maybe was a mistake to not have those people that early. On the other hand, I have to say, I think you have to do this learning journey, you have to do as an organization. You can't just buy it, how you do innovation in a company. If you want to be close to the core, let's say. Otherwise, I guess you can also invest your money into some kind of, give it to some investment experts, but if you want to, as a company become more innovative and really embark on that journey, it's a lengthy and partly also painful. And I guess also expensive learning that you have to do, but you can't just buy the skills, you have to have some of the experiences for your teams.
Olaf: (21:13)
And I think that's also one thing that we underestimated a little bit in the beginning, how long the journey is to get to some of the conclusions you need to really get successful products out. And, I think the misperception we had at the beginning was that a lot of people felt the innovative products would be rather a relief from the daily burden of going to office and wearing a suit. So, you could go to labs, dress more casually and, you know, follow your own rhythm of work and leisure. And I think quite a number of colleagues found out that that's not really a reality. I think innovative activities are incredibly tough. It's rather messy, in a lot of ways. And it's really a constant struggle until you get an initiative to at least a certain level of success. So, I think it's really an uphill battle all the time. And I think that that's one thing that we did not necessarily, at least I didn't anticipate in the beginning that much.
Christine: (22:09)
So, basically it helps to leverage the network of innovation experts that's out there, to get to the goal faster. And, you mentioned earlier that the business technology unit is now about two and a half years old already. So looking into the future, is there anything you're looking forward to for the unit or for the unit and Munich Re in general, anything that's next that you can share with us?
Olaf: (22:31)
Well, I believe, I think it's about the balance, right? So, I think what we saw in a lot of the innovative initiatives, I think you can copy a lot of the practices and especially the attitudes to other parts of how we do it. That's at least my friend belief. So, not get lost in process that you've set up a long time ago, to really try to strive for the right outcomes all the time, to use modern technologies more, let's say explicitly, to try to be very close to your clients, because I think it was one of the key success success criteria for BT. It was that we really tried to understand our clients. We really try to be part of the business initiative.
Olaf: (23:11)
So I think it needs to become, or is already to some extent, it needs to become more part of business, because I think most businesses in the future will be heavily impacted by digital impact, digital technologies. A lot of the current practices will go away, because there's a much less expensive and faster, maybe even better way to do things and, you know, to scan what you do today and see how you can improve those things. Using technology is one thing, and one attitude that I think we can expand to all the different areas that we currently have in it. And then thereby also helping reshape Munich Re. And, also that was one of the purpose as we early on agreed for ourselves and communicated to whoever joined the team, was we really want to change the industry.
Olaf: (23:53)
We really want to change how insurance is done in the future. And I think that's absolutely necessary. If you look at how the world is changing and how innovation and digitalization, IOT becomes more part of everyday life, you see that the traditional business of insurance will change. It will go away. People want what they need at their fingertips whenever they want it for as long as they want it. And, traditional insurance is not necessarily that way. So, I think there will be a lot of change and we want to be actively driving this change. We want to be a leader in how the insurance industry develops us as a company, and then also as a BT.
Christine: (24:27)
That's a super interesting outlook. I especially like what you just mentioned with basically changing how insurance is done, transforming or changing the traditional insurance landscape. So, thank you so much Olaf for taking us along your journey on business technology and especially interesting to hear what initiatives and using tech and data to assess risks, you've brought to life so far. Thanks again.
Olaf: (24:53)
Thank you. Pleasure was all mine.
Christine: (24:56)
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