The ‘key differentiator’ in platform development – Sarah Harland at the Future of Insurance

Data scientists have been heralded as the ‘secret sauce’ in the development of next-generation insurance platforms.

Presenting the opening keynote at the FST Future of Insurance in Sydney on Thursday, Suncorp's chief information officer Sarah Harland stressed the importance of embedding dedicated data scientists within ICT teams to leverage insurers' vast data assets. From this, data scientists will play a crucial role in building out insurers' digital capability to meet the fast-evolving demands of customers.

“The key differentiator for a digital experience and personalisation is data science,” Harland said. “The creation and use of data science to understand customers, to look at data about customers, and to predict what products and services are most appropriate for customers has been a really important part of this.”

“Customers today are looking for a real-time, 24/7, personalised experience from financial services. Companies like Apple and Amazon have created scenarios where customers rely on platforms and where lots of different products and services are available to them.”

The uplift provided by Suncorp’s data science capability was itself crucial for building out its pioneering marketplace app.

“The spend analytics, the chatbots, the predictive analytics – all of that was created by our data science team. [We] were committed to continuing with that as we move forward to differentiate experience for customers.”

Suncorp went live with its $100 million marketplace platform mid-last year, providing customers access to the Group’s wider insurance and banking services through the dedicated marketplace app.

The Queensland-based insurance giant, which encompasses several big-name retail insurers (including GIO, AAMI, vero, and bingle) as well as a dedicated bank, faced the considerable challenge of consolidating its multifarious business holdings – alongside several third-party vendors – into a single platform.

Rather than a single, ‘mega-platform’ design, an approach adopted by CBA and NAB, Suncorp instead embraced a unique, multipronged ‘marketplace’ structure.

“It's about enabling our customers to move freely between brands, channels, product solution," chief executive Pip Marlow told iTnews following the official release of the platform in August last year. For Marlow, the marketplace approach would also avoid any tendency to silo these distinct brands and restrict data flow between them.

Establishing a number of third-party relationships – including partnerships with Fairfax’s real estate listing site Domain and motor vehicle lister Georgie – became a crucial part of the app’s holistic service offering, tying Suncorp’s insurance and financing products directly in with customers' home or vehicle purchases. This also aligned neatly with Suncorp’s push to increase its interaction opportunities with customers – too-often limited to once-yearly policy renewal statements.

“For traditional insurers, there is a low frequency of interaction with customers – [typically] on an annual basis or when they want to make a claim – so we needed to address that and build that customer intimacy with them,” she said.

“When we designed the app, [we] needed to differentiate it, so we thought very carefully about what additional value could we add to customers to deepen that intimacy."

Indeed, for Harland, the real threat to incumbent insurers is not from emerging insurtechs, but from longstanding out-of-industry players who have sought to tack-on insurance product offerings. These companies, including Qantas and the big four banks have, as a result, “developed a deeper personal relationship” with customers, Harland said.

“Because there is a much higher transaction and frequency of interaction with you than there is with a traditional insurer – this is the threat from digital disruption.”

These third-party alliances also serve to supplement Suncorp’s vast data reserves. Through an API-backed platform, customers can gain valuable information on product or service risk before making a purchase.

“Critically, we decided that we would combine Domain’s data with our insurance data and insurance risk data. Customers would be able to learn a bit more about that community and some of the risks they face with potentially buying a home,” Harland said.

Liberated by API

Suncorp’s mission to incorporate an array of third-party services and data into its marketplace app – despite the vast resources commanded by the financial services group – presented an “enormous challenge” to the business, Harland revealed.

“We realised we would have to build something completely different and new; we would have to change our mindset and really think very carefully about how to transform Suncorp into a digital business and take a digital-first mindset.”

To achieve this, the development team's first priority was to “liberate” Suncorp’s vast data reserves from its core systems.

“The first layer that we thought about when we approached this was the domain API platform. We needed to extract data from across our banking platform, our insurance platform, and receive APIs from our third parties, so we created a domain API layer.”

However, as Harland acknowledged, a holistic and personalised customer experience requires an integrated system that can combine various data streams.

“We created the experience API layer… [which] allowed us to take data and information from different areas and combine it together to create that experience for customers.

All in on agile – almost

With just nine-months allocated to developing and building the marketplace platform, Suncorp’s dev team were under the pump from the get-go.

“The build was over a very short period of time… it was a hugely pressurised environment at the time,” Harland said.

The company’s longstanding embrace of agile was critical for delivering the project within this truncated timeframe.

“Suncorp is a mature agile organisation already,” Harland said. “For our build and test, we were very focused on leveraging the agile that we had in place.”

However, despite the team’s wholesale adoption of the iterative and incremental development process, for Harland, the complexity of the marketplace project nevertheless required “a thin veneer of waterfall on architecture and design and planning”.

“Because as you’re looking across so many different complex areas and pulling it all together, you do need quite a detailed plan,” she said.

“We did borrow from waterfall a little bit in the planning phase to make sure that when we plugged it all in, it would all work; but we stayed true to our principles of agile.”