LV has appointed TH_NK to advise on its digital transformation strategy, a move that comes amid a raft of internal changes at the general insurance brand in the hope of future-proofing itself against emerging technologies.
On joining the company in June last year, chief executive Richard Rowney immediately vowed to significantly increase its digital spend to the tune of £100m over three years admitting that the sector as a whole had “fallen off the pace” when it came to meeting customer expectations about how insurance services should be delivered.
By August, it had poached Heather Smith from rival Aviva – where she spearheaded the development of the My Aviva customer portal and app as well as driving the brand’s digital development – to become its first digital transformation director. Last month, two further appointments were made to bolster its efforts, including a new chief information officer and head of digital.
“LV had been doing a lot of things in the digital space but the opportunity was to join that up and make the sum of the parts align at a pan general insurance level and follow the customer away from products and channel and into customer experience,” Smith recently told The Drum.
Part of the problem lies in the fact that there simply aren’t many competitors in the general insurance space that are pushing legacy businesses, like LV, to radically improve their digital offering.
There are niche companies – like Lemonade for rental insurance or Trov for ‘on-demand’ home contents insurance – which have put some pressure on the likes of LV to change, but by far the biggest motivation has come from the new large established tech groups such as Google which are controlling more and more of the data that sits at the heart of the insurance industry.
“A lot of what the market is talking about is the role of the internet of things and an increasingly connected environment in automotive in particular, which means that those who control the data in the marketplace, around how a car is being driven or otherwise, won’t always be the insurers,” said Tarek Nseir, the chief executive of TH_NK.
LV’s biggest threat is that in the near future it will be the connected car manufacturers and tech brands themselves that will have the authority in the insurance space. And so its biggest opportunity is how to become a business that can easily partner with these companies.
It’s something that LV has been trying. For example, last year it took a majority stake in robo adviser Wealth Wizards to deliver advice to pension customers who were approaching retirement. Smith claimed that its “got off to a successful start” but what it now needs is to rapidly scale the rate at which it can do this.
“As more partnerships are created in the marketplace there’s a lot of scope to think about how an API-powered insurer can take a different role in the marketplace,” Nseir added.
With the hire of TH_NK, LV is looking to emulate the seamless experience of an Uber or Airbnb that its some 5.8 million customers have come to expect whilst simultaneously pivoting the whole business to be more fluid and open to working with others.
Smith said that the agency has already created “a really joined up, thought through road-map and set of capabilities that will allow us to act and deliver a step-change for LV” which will see it look at new channel capabilities, ensure there is a supporting infrastructure and develop a new and relevant customer experience platform which will connect all strands of the business.