Insurtech Insider - Ep. 6 Aviva Takeover FILE DETAILS Audio Length: 00:43:53 Audio Quality: Good Number of Interviewers: 1 Number of Interviewees: 1 Start of Audio DB: Welcome to Insurtech Insider, for a very special installment of our very first Insurtech Insider Takeover. It’s an Aviva takeover, this week. Coming to you live from the Aviva garage in Hoxton Square, my name is David Brear, and today, we’re joined by my wonderful, wonderful co-host, Nigel. Nigel, say hey. NW: Hey! DB: And Sarah, how’s it going? SK: Good, thank you. DB: Good, good. And, with us today, we are lucky enough to have four members from the Aviva gang. Say hey guys, how are you doing? F: Hello. M: Hey! DB: So, let’s go round and say who is you, and what you do. So, Claire, say hey. CW: Hi! My name is Claire Woodcock, and I am in the strategy team here in the product and design department. DB: Awesome. Anna? AS: Hi, my name’s Anna Stables, I work in the digital innovation team. DB: Very good. Alex? AA: Oh, hello, I’m Alex Allen, and I also work in the digital innovation team, here at Aviva. DB: Very cool. And, Colin? CR: So, I’m not technically Aviva, but I’m Colin Richardson, and I’m Co-Founder and Head of Marketing at Cocoon. DB: That was lucky, I was going to be like, “What are you doing here, then? Just some-, just some random guy walked in! It’s really-,” CW: Wouldn’t be the first time! DB: Well, thanks for coming, anyway. You guys are really, like, good at following instructions. You sat in order, as well. That’s amazing. So, well done-, well done for that one. Yes. Anyway, thanks for having us here, guys. It’s a pretty awesome location. AA: Yeah, it is strange, because we’ve been here such a long time now, it doesn’t actually feel as awesome as it does to other people, coming for the first time, because it’s such a, sort of, a usual thing for us, now, but it’s a-, it’s a great space. DB: How long have you guys been here now? AA: Officially since 2015, the middle of 2015. CW: Three years. AA: Although, Anna and I have actually been here a little bit longer, before it had the nice-, the nice refurb. It was a lot less nice before that. CW: We should point out that we’re looking at exposed brickwork, there’s whiteboards on the wall, there’s definitely Post-Its, I’m sure, if I look hard enough. AA: Yeah, we’re-, AS: Somewhere! [Laughter] AA: Yeah, we were one of the first groups that was actually in here, and there were rats, it was cold-, AS: Asbestos-, AA: Yeah, it was disgusting, yeah. CW: It’s much better than that now! AA: Yeah-, AS: Yeah, much nicer. AA: So, yeah, the innovation can thrive, with working radiators. Yes. [Laughter] DB: And on that note, let’s get on with the show. So, I go-, I, sort of, know you guys pretty well, I used to work for Aviva, back in 2007, so, for-, you know, for me, this is sort of a, not quite a return to home, I’ll be honest with you, because this office is a lot nicer than where I was, I’ll be honest. But, tell us a little bit about Aviva, for those guys who don’t know, and, you know, what is it? CW: Okay, so, Aviva is a large financial service firm. We offer B2B and B2C products for customers, we do things from pensions to insurance, to large scale investments, and then, here in the digital garage, we focus on digital product development, for mainly B2C customers, and we develop for customers of all types. Whereas, I think that, often, smaller firms are just looking at one particular type of customer, we’re serving people all across the country, all different demographics. DB: Very cool. And you guys have got a pretty big footprint, as well, right? In terms of the-, both the UK market and abroad? CW: Yes. We do. AS: Yes, global footprint. AA: I think it’s 18 markets, isn’t it, that we’re in? Something like that. AS: Mm-hm. AA: Yeah, so, we’re pretty-, pretty well spread. AS: Although a lot smaller than we used to be. Our strategy over the past, kind of, few years, was to, kind of, concentrate in the markets that we were going to do really well in, and we could innovate and scale our businesses. SK: So, do you guys have innovation hubs like this across your markets? Or is this the-, the headquarters, as it were, of innovation? AS: We do. We have “garages” elsewhere. The main other garage is in Singapore, but we now have innovation hubs in Canada, in France, in-, CW: Turkey. AS: In Norwich-, CW: Norwich. DB: The home of fintech, given-, it’s where I live, as well, so, I, like, I’m very much up on Norwich culture. AS: The whole-, I guess our innovation journey started off in the garages, but it’s starting to, kind of, seep out in to our other, more corporate, offices. So, we have an innovation space, of sorts, in all of our offices in the UK, and-, and elsewhere. AA: This is the only one that was actually ever a proper garage, though. AS: Yeah! AA: There’s still a turning circle on the ground floor, it actually was a garage, at one point-, DB: Wow. AS: We didn’t just call it-, NW: So, was this the first one, then? AA: It was. CW: Yeah, it was. AA: I mean, it does, kind of, play on the, kind of, Hewlett Packard, Jobs Wozniak, garage innovation, starting something thing, but it actually was a proper garage at some point, it wasn’t just a trendy name. NW: And if you look in the industry, right, you guys, without question, in my mind, have been the-, the poster child of the digital garage, and everything else, which I think is really, really great. On the flip side, you get people going, “Oh, it’s a load of old nonsense, it’ll never take off,” but everyone seems to be copying it, and doing something of their own, or something similar. Is it-, have you seen it make much of a difference in the business? AA: We hire people now that would never have come to work for us, four or five years ago-, AS: Yeah. AA: We hire incredible people now, and you have to offer them an incredible place to work, and a place where they feel like they can do the best work of their careers. And if they don’t feel that way, they won’t come. Because, really, it’s not all about money and, you know, the financial package. They actually want to feel like the environment’s in place for them to really do great work, and actually contribute to something really meaningful, and I think this place really embodies that quite well, and I-, I’ve been here before this garage existed, and it’s night and day, really, in terms of the-, the environment it creates. CR: And that’s a different type of talent, sorry, David, that’s a different type of talent, right? Because, normally, insurance is EC1, and getting out of St Helen’s, or Lime Street, or anywhere else, is going to be near impossible for insurance. So, it’s a different type of people that are working here now. AS: 100%, yeah, and I think it’s taken us a while to get to that point, where we’re attracting that point. We have a few, kind of, people spearheading that, kind of, move towards, I guess, attracting people from a more, kind of, technology background. But now, it’s the norm, so, we-, the vast majority of people that we employ here haven’t come from insurance at all. SK: Do you get people from the, you know, the main body of the company, and the head office, wanting to come and work here? Do you have that? Because one of the things that these guys talk about a lot, and I talk about a lot, is, you know, culture, and the importance of-, of making sure that that disseminates out of, you know, these innovation hubs, and actually, it’s across the whole business. Do you get, you know, teams coming in and working from the-, the more corporate offices? AS: Yes. They love it here. SK: [Laughter]. AS: They love it here, um-, SK: I’m not surprised. AS: Yeah! And it’s-, you’re right, it is very different to the city, and we see a lot of people coming and using this space, whether it’s just for an away day, or whether it’s just that they want to come and sit here for a couple of days a week, and that-, it adds to the-, to the atmosphere here. DB: For sure. So, insurance, generally, has been quite, I guess, slow to get on the-, the bandwagon of fintech. You know, banking has probably been a little bit, you know, further advanced in that space. Why do you guys think that is? What do you think has been a bit of an inhibitor in the insurance sector, to slow things down? AS: I think there’s a few reasons. CR: I think-, we noticed-, we were doing some prep reading for the podcast, before we started, and we noticed, Sarah tweeted about the different podcasts we had on this week, and that this Aviva one might not be as lively as some of the others, and I think there’s a perception of that just generally, and it’s completely what we get all the time-, SK: Can I caveat that? Because-, because-, CR: She did say this! I saw it! SK: I-, I did say that, but-, but the other one is, like, sponsored by beer, which was basically the caveat that I couldn’t include on the tweet, because it wasn’t long enough. It was nothing to do with Aviva! CR: But I think it’s a completely fair point, because it’s something that must come up all the time, and, it’s inevitably one of the reasons why fintech, and especially insurtech, was one of the last industries to be disrupted, and we’re quite fortunate, in that we actually had a lot of prior warning about the sort of things that can happen to big, incumbent companies, in a way that, say, Blockbuster and, you know, other big corporates, didn’t. So, we know what can happen, and we have an opportunity to prepare against it, but, equally, it can be quite dry, and it can be quite stale, and I think that’s why it’s taken until now for a lot of companies to pop up. DB: And like you say, though, the level of disruption that has happened in insurance, with aggregators, and everything that’s come through, you know, there has been a huge amount of redistribution of how distribution works, to a certain degree, hasn’t there? So, really, insurance companies should be more akin to this level of change than-, than banking, really. CR: Yeah, and most of the startups that we see, at this point, are mostly based around distribution, because the capital you need to actually start your own proper insurance company is so huge, it’s just almost impossible to do that. So, when you see things like Brolly, or Bought By Many, or Cuvva, and so on, they’re really trying to change the way that people buy insurance, and try to target new types of customers with insurance products. They’re not trying to create an insurance company from scratch. And I think the regulation, as well, is hugely important. AS: Yeah. CR: So, the FCA are doing a lot around sandboxes, and so on, to allow us to test new ideas, but it is generally quite hard to start something from scratch, and then grow it out, in a way it’s not, in other sectors. NW: But isn’t that interesting, though? When you start to see, where does Aviva’s role, or the primary carrier’s role, exist in the future, then? So, do you become the-, ultimately, do you become the most efficient manufacturer, to help enable those new distribution channels, whether it’s a Brolly, ex-Aviva, or other things out there, to get to market? Or do you see yourselves being disrupted, yourself, by the reinsurance carriers? AA: I think Founders Factory is quite interesting, in that-, that regard, isn’t it? With things like some of the ones you’re looking at. AS: Yeah. I think, it’s funny, you talk about the distribution, I think the real disruption is going to be in the way that we actually, fundamentally, like, price insurance, the actual products, themselves. So, I think the, kind of, the wave of innovation is actually still to come, and it’s something that we are working very heavily on internally. We’ve got a programme called “Ask It Never”, which is basically all about taking data, and enabling our customers to take out insurance without ever asking, or answering, a question, at all. And that, I think, is going to, kind of, spark that new wave of innovation in insurtech, and it’s-, I don’t think anyone’s really done that yet. Founders Factory is an interesting one. I’m not sure there’s a huge amount, in terms of the-, in changing the insurance model. SK: Can you just give us a quick overview of what Founders Factory is? Because-, AS: Yeah-, SK: It’s one of those names that you hear quite a lot, but it’s not something I know about in any great detail. AS: So, yeah, so, founded by Brent Hoberman and Henry Lane Fox, serial entrepreneurs, lastminute.com, made.com, etc., it is a corporate accelerator and incubator. We run both programmes with them, and we are one of their corporate partners, the only financial services partner. We work alongside the Guardian, EasyJet, Holtzbrinck, a number of those really big names, and what we basically do is we work with around seven startups a year, either on the accelerator programme, or through the incubator, where we create new businesses from scratch, and those businesses are created out of, kind of, real customer problems that we’ve identified, either in insurance, or just through research that we have done. An example of that being OnCare, which is our first incubator business, which, actually, on the skin of it, doesn’t have any, sort of, real relation to insurance, but, deep down it does, I won’t get in to that today, but it’s all about digitising the care industry. So, something that is very relevant to our customers, we have our, kind of, aging, kind of, demographic, we’re slightly leaning towards the older portion of our population, and it’s-, but it’s something that we think is the right thing to do, and we are, kind of, bringing that to life, through Founders Factory. CW: It’s exciting. So, it’s bringing in learnings from other businesses, and other arms of the business, and seeing what you can do with it, then-, AS: Exactly. Yes. CW: You know, there will be a connection to insurance in there somewhere, because-, AS: There is-, CW: It’s data. So, the minute you’ve got anything to do with data, it will be useful for you in some way, even if it’s how you manage it, or collate it, or distribute it. AS: Exactly. AA: Yeah, I think technology is really making us rethink, as a business, what it is that we do, what we provide for customers. So, in the past it was very reactive, someone has an accident, or some kind of incident, and we try to put it right, and now there’s a huge focus on things like prevention, which is really interesting, so Colin could talk a lot about Cocoon, but the idea that, you know, if we know a pipe’s going to burst in advance, we would just fix the pipe, and we wouldn’t have to deal with the outcome from that. And it might change, completely, the kind of products that we make and offer. And though we don’t make as many pure insurance products as we used to, you know, we do different things, maybe we’re there to serve customers in different ways. But Cocoon’s a really good example of that, Colin, I don’t know if you want to talk a bit more about that? CR: Yes, sure, so, it’s-, with Cocoon, obviously a home security product, and what we’re trying to do, from the absolute outset, is to make people safer at home. And that has a really good affinity with what insurance, insurers do, because, ultimately, what we are trying to do is prevent the bad things from happening, by either slightly nudging people’s behaviour, or by giving them things that will physically prevent these sort of intrusions from happening. And we’re definitely seeing that, we’re seeing that mirroring of your strategy, and our strategy, and that coming together, certainly in the customers that we are helping, we are finding that our devices are protecting customers, they are preventing intrusions from happening, and, also, and when they do happen, they’re also being used as evidence in court cases, to lead to the convictions. DB: So, what are the devices? So, just, sort of, talk us through that a little bit more. CR: Yeah, so we created a home security device that’s everything you need in a single unit. So, we try and make it as easy as possible to protect the home, because, one of the biggest problems has been that it’s so difficult to get home security in to your house, and that’s why most people don’t have it. It’s like, 70% of homes don’t have home security. So, by doing that, we’re able to then monitor the home, and we use a combination of sound detection and AI to do all the hard work for you. So, it’s like having a security guard at your home, looking after it for you. SK: It’s like a much more modern, updated version of a burglar alarm, basically, is what we’re talking about-, CR: Definitely, absolutely, yes, but it’s like having a person there, thinking about what’s happening in your home, and making a judgement call on whether you should be alerted or not. NW: And is it-, so, I’m-, I’m a massive, sadly, connected home type character. I love what the Neos guys are doing, it’s unsurprising if you look at my-, CW: You’re in the right room. DB: Nigel, no. You? No? NW: I’m in the right room. But-, but the anxiety that goes-, so, I’ve seen the positive sides of this, and the negative sides of this, and, for example, my wife-, between my wife, and David’s mum, they always end up on the show somehow, but my wife had a-, one of the internal cameras, just being tested out on a trial, earlier in the year, in the hallway, and it gave her such a level of anxiety that she felt there was some-, whilst it’s great to have a security guard in the house, it felt like that she was being watched all the time, and she didn’t like the level of intrusion. Whereas things outside, like a traditional security alarm, with a traditional wired bell, and whatever else-, how soon do we think customers are going to be ready for this? Is this a small part of the population today, and it’s going to grow over time, or? CR: I mean, it’s growing now, and we’re not even at that, sort of, apex point. It’s-, it’s on a trajectory upwards. So, it’s going to continually grow throughout the next decade. This is just going to be a normal part of our lives. If you were to look, two or three years ago, it was-, it was Dropcam, and then, that was it, right? And now, there’s a whole multitude of different products, solving different problems, in different ways, and the adoption is, as we are seeing in our sales, is fast. So, we’re pretty happy there. But, to your second point around-, or, sorry, your first point, about people feeling comfortable with it, yeah, it-, it can be unnerving, if you’ve got this little light, this little camera staring at you. So, what we’ve tried to do is just to take that away, so, instead of having lots and lots of cameras around the home monitoring you, like A Space Odyssey: 2001, we’ve-, we use sound. So, that, in itself, means that you don’t have to have lots of devices-, DB: Yes. CR: It’s just this- this system monitoring the air flow in your house, and working out if there’s an intruder or not. NW: And how do you-, how do you then carve a niche, when you’ve got the Nests of the world, you’ve got the Neoses, you’ve got the Dropcam? I mean, there’s literally a gazillion things out there that you can go and get. How do you carve the niche out, and what makes it different when you tie it together with insurance, which I think is when it starts to get quite exciting, right? CR: Yeah, so, I-, so, first thing is, I don’t think there’s any one particular player out there that’s-, that’s won, so, it’s still quite an open market. If you were to look at home security, ADT probably do more in a year than everybody else combined, right? So, it’s still really quite a competitive place to be. What we do is, we just try and provide the absolute best service that we can, in the easiest way possible, so that everybody can use it, and we see that in our customer reviews that come back. So, people are really happy with what we’re doing. Everything that we do is geared around the customer, like, absolutely everything. So, if we can provide a new feature, we will do, if that’s adding new users-, but we’ll try and do it in the simplest way possible, so that it’s-, it’s so intuitive, and nobody has to worry or think about it. NW: So, if we go back to the insurance angle, then, how-, what’s the link between Aviva and Cocoon, then? So, if I buy Cocoon on its own, versus Aviva on its own, what’s the difference when I buy the two things together? Do I get a better outcome for me? A lower price on my policy? Back to how you talked about how we change our pricing, for example. What’s changed? CR: So, right now, nothing. We’re an investment, as part of Aviva Ventures, but hopefully, in the future, there will be something that we can work together with. Like I said before, what we do, it nudges the behaviour of people, so they become more aware of their-, their home security, and they then become safer. But, even if they don’t, by having the device, it’s protecting the home. And so, we would hope that that would change that relationship, from being cleaning up the mess, after it’s happened, to actually preventing it happening in the first place. DB: I think that’s the thing, isn’t it? The more data you can have, the more preventative measures you can put in place, usually the less problems that are actually there. You know, that seems to be the-, the, sort of, trend with all of these things, and I think that’s, you know, definitely, Nigel, in the stories we’ve talked about over the last couple of, maybe three, four months now, that seems to be the reoccurring thing, really, is more data, more protection, really. NW: Definitely. And I think the-, the fact you have a device in your home, or your workplace, wherever you choose to get to, actually indicates the intent to the insurance organisation that you’re prepared to share that data, and then, ultimately, price that risk slightly differently, going forward. So it-, you know, once you start to join the dots together there, I can start to see a really strong proposition. CR: Certainly, and it-, and it all has to be for the best interest of the customer, anything that you would do with this. So-, so, to that point, you know, by providing these devices, and then them being more secure, hopefully what you would imagine is that you can price that risk better, and then provide that benefit back to the customer, because you’ve already received a benefit, as an insurer, yourself. SK: So, from the perspective of you guys, from the insurer’s perspective, as well, is this, kind of, how you look about changing that customer relationship? Because I read some brilliant statistics, a couple of months ago, about how many people defraud their insurers because they really don’t care, they think insurers are bad people. I mean, they don’t seem to have the understanding that, actually, if they claim when they don’t need to, their policy’s going to go up, but, like, the perception of insurers is, to a certain extent, the same as some of the big banks, and people who-, your average customers, your consumers are-, they’re not overly fond of you. So, you know, if you’re going to start putting things in their home, you’re going to have to have some kind of pivot on the customer relationship. Do you see this as, kind of, a way of doing that? To go out there and say, “Okay, we’re going to-, we’re going to help you, you know, we’re actually going to not take your money, we actually want to save you money.” Is that, kind of, how you start driving that change? CW: So, we’re definitely working on building that customer relationship. It’s a really interesting dichotomy, that people have a dislike of financial service providers, and yet, the big brands, the big names, they have more trust in than some startup, and-, and they know that they have to have things like insurance, and what not. So, yes, absolutely. We’re looking at building those relationships, and there are particular things that are quite sticky in terms of interactions. So, one thing that we’ve seen, that’s quite interesting, is that our customers log on all the time to check their pension balances, because it’s really rewarding to see a pot of money growing, that you can’t dip in to-, SK: I really like that [laughter]. I can-, I watch the little arrow, I am a bit obsessed with it. CW: Yeah, exactly, it’s great, and so what we started to do is think, “Well, how do we build out that relationship?” So, we built a pension tool, which allows people to create what their day to day lifestyle would feel like when they retire, because the big problem we have at the moment is that people don’t save enough in to their pension, and they don’t understand that they need to save more, and you’ve got to present that in quite a positive way. And, from that interaction, when they’re repeatedly logging in, and they’re using those tools, and they’re seeing that you’re being helpful, that’s when you can really start to leverage that relationship, and then start to build that trust, start to show them the other things they need in their life, and-, and that’s a really helpful way of, sort of, communicating with them. DB: Is that-, I guess that’s a-, probably a good point to make, really, is that, generally, and as you say, insurance is, kind of, a grudge purchase, really. You know, apart from the ones where you absolutely have to do it, like, if you want to drive your car, or something, then most people kind of do it out of, probably out of spite, really, you know, and the problem, really, is that the relationship is predicated on an annual, sort of, ask for money. Do you, sort of, see fintech and insurtech being a way of, kind of, changing that-, that, sort of, process? You know, the more frequent relationships, or the more frequent positive engagements you can have with customers, kind of, the better you can build a brand? CW: Yes, absolutely. So, and I think that’s something that we’re looking at, in how we can be more rewarding to our customers, how we can get them to interact with us more regularly. Alex is working on a-, a proposition, at the moment, which is also quite relevant to this question. DB: Go on, Alex, tell us. AA: I’ve been set up for an answer. Yes. [Laughter] AA: Yes, I mean, I think, in the past, we were very much, “How can we improve the way we cross-sell, or up-sell?” We were, kind of, measuring ourselves against these messy kind of metrics, and actually, it’s much simpler now, because we’re just trying to create products that customers really like, and we think that, if they come to us, and they want to use our stuff, then they’ll naturally think of us, when it becomes time to buy something, and that just feels like a much nicer way of approaching it. And one thing we’re looking at, at the moment, is Aviva Drive. So, Aviva Drive is a product we’ve made, since, I think 2014, and, at the moment, the way it works is that you drive for 200 miles, and we assess your driving, and we give you a score out of 10, and if you drive really well, then you get a discount, and if you don’t, then you don’t get anything. Um-, DB: How do you position the “if you don’t, you don’t get anything” to people? Like, is it, like, a, “You’ve failed your driving test”? Because, like, having failed my first driving test, I was pretty upset about that whole thing. I mean-, AA: No, we just-, we just give you a score out of 10, and if you just-, you don’t score your 7 or above, then you get nothing. You don’t get penalised in any way, but you just don’t get a discount. SK: I think that not being penalised thing is really important, if you’re going to start talking about on-demand insurance [laughter] because-, and-, sorry, usage based insurance, because, the minute people see that, they think, “Oh, it might go up.” So, again, that follows on from what David was saying, about that, you know, if you have a regular relationship with your insurer, you’re more likely to, kind of, understand where they’re coming from, and what they’re after, as opposed to if once a year they go, “We want, you know, £200 from you, and, by the way, we want you to take a driving test,” they’re going to be like, “Uh, no thanks!” AA: Yeah, and I think it-, in a small way, it contributes to the idea that we don’t treat every customer the same, we don’t, kind of, bunch everyone up, and say, “You’re all, kind of, the same as each other.” We give you an ability to change your price, and how we view you, and get to know you as a person better, and I think we’ll be doing a lot more of that over the next few years, this idea of, kind of, segment of one, underwriting for the individual, rather than just for lots of people at once. And I think that’ll really help to improve the relationship we have. But obviously, it is difficult, because, you know, we only really speak to our customers once a year, unless something bad happens. We, kind of, punish you for using the product, which is strange, because we don’t do that anywhere else. And I think that it’s just about showing the value that we can bring, and the protection we can offer, in lots of other ways, beyond just the-, the traditional products that you might expect. NW: So, isn’t this a fundamental shift, then, in what insurance actually is? And the fact that Cocoon are in the room, as well, is a really interesting combination. So, you talk briefly-, you mention briefly the discount you get, based on the score that you have. And that’s, traditionally on a motor product, which people want to go as cheaply as possible, more often than not, the cheapest possible price with the best possible brand they recognise. However, I’ve moved from cheap price, to services to protect my life and my family, and the two things there are often in-, are not often aligned. So, actually, I would pay more for more protection for my life and my family and my kids, and whatever else. Therefore, how do we get away from the discounting, just on your good behaviour, to something much broader than that, i.e. a services business for insurance? AA: We were actually the first to do the, kind of, smartphone telematics thing, so, we did it four years ago, or so, and since then, pretty much all our competitors have copied it. And we’re thinking now about what’s next. So, the world of, kind of, autonomous vehicles, and connected car, and so on, is-, is really relevant to everybody, but we still think there’s a lot of interest in-, in retrofit, because we know that manufacturers tell us that from making changes to a vehicle, it can take seven years to actually see those reflected on cars you can buy on the forecourt. So, adding things to people’s existing vehicles is really compelling for us, whether it’s, you know, satnav, dashcam, ADAS features, whatever it is, we think there’s a lot of things we could do to improve people’s driving experiences generally, and that’s something that we think Aviva Drive is going to be a really great vehicle for us, no pun intended. SK: [Laughter]. I guess you tie it in to, like, if you’re a safer driver, if everybody else is a safer driver, if you’re a better driver, you know, and then that ties in to the new tools that are coming in with the cars, which are, you know, “We will stop you before you crash,” I think it’s the Volkswagen that has that-, that new feature on it, that’s like, “We will stop you if you’re too close to whatever,” so, actually, maybe that’s how you tie it in. maybe that’s the, kind of, the-, “We’re your insurer, we’re nurturing, we’re looking after you, we’re going to help you drive safer, we’re going to help everybody else drive safer-,” NW: Well, it’s a segment of one piece, as well-, SK: Yes. NW: Which-, where you get to proper pricing, but then the flip side for that, I mean, there’s always a pro and a con to all these. The pro is that, actually, any of us around the table get unique scoring, for the fact I drive once a week, David might drive seven days a week, and Sarah doesn’t drive at all, just saying-, DB: But only one of us was, like, sideways with our kids in the back this week in the car, right? So-, [Laughter] DB: Fails that-, NW: Also insured by Aviva, there we go [laughter]. But you-, but, you know, we get this-, this true, unique pricing, but the flip side of that is, those that are not so good at driving, either you deselect that risk, by saying you can no longer afford insurance, and you create, ultimately, a-, either a society issue or a political issue, or an affordability issue, and they’re all-, they’re all linked somehow. But you get to, through data, through data through the house, or car, or whatever else, get to choose the best risks that are right for you, I guess. CW: I think you’re hitting on more ethical issues within the industry, which are things that I think we’re all working on ironing out. I think that’s a pretty big question, around how you-, you work that pricing model, as the consumer base grows. DB: And I think it’s the same question for lending, it’s the-, it’s insurance, really. It’s-, as the data gets better, then actually-, CW: Private health insurance-, DB: Where’s the line-, CW: Yeah. DB: Where it starts being almost prohibitive, as you say. NW: Completely. I mean, if you live near a waterlogged area, these days, and try and get insurance, again, there’s government schemes in place now to make sure that insurance to live near those areas is affordable. DB: Norwich. Beautiful for fintech, flat as a pancake-, [Laughter] DB: Flooding everywhere. AS: I think ultimately, like, the message that we’re trying to get across to our customers is, we want to remove uncertainty from their lives. Whatever that product is that they have bought from us, or whatever uncertainty could be in their lives, whether that is an illness, or, you know, it could be they might crash their car, they might get ill on holiday, these are, kind of, all things that we want to remove, and just make people’s lives a lot simpler, and a lot more stress free. So, just how-, how we deliver that, and it’s just that there’s a number of different ways that we can do it, and I think just tech has-, has helped us not only do that, but increase the, kind of, touchpoints and engagement with our customers. DB: Yeah. It’s gone from a-, you know, a broker-style relationship, kind of, years and years and years ago, and I think people don’t-, people don’t want policies anymore, they want services, and, actually, if you can stop selling policies, and start giving people services, like, as you’re describing, then, actually, it just feels like that’s a-, a completely different place to be. AA: I think it’s a natural progression for financial products, or companies that sell financial products, to-, to grow in to-, to services-, AS: Yeah. AA: Because what you don’t want to do is be a utility. You don’t want to be commoditised. Because, as soon as that happens, it is just price, and, over time, you’ll lose customers. And one thing, speaking as an outsider, that Aviva have done very well, is to-, is to, sort of, nurture other companies, or even projects internally-, AS: Yeah. AA: That are innovative, that can be then added as a service that’s beneficial to the customer-, CW: Yeah. AA: And-, and I think if you do that, and when we talked about the ethical issues around policies, and pricing that, there’s definitely an ethical question, if you’re keeping the risk the same, but if you are better informing the risk, and providing a-, a benefit (? 29.15), and-, and reducing your cost, I think that’s a win/win situation. But there’s always a moral question. It’s one of the good things about us not being controlled by AI, you know, we are people, and we’ll make those decisions as they come. AS: Yeah, and I think-, I hate to be cheesy about it, but, I mean, there are services, but I think more than that, we want to offer, kind of, relationships, because, you know, we touch our, kind of, customers, at times in their lives when they’re going through really, really crap experiences, and, if we can use tech or innovation, to make that experience a lot better, then that is an absolute win/win for everyone, and that’s, kind of, what we’re here to do, and have been here to do for the past 300 years. NW: I mean, I-, I love the message, removing uncertainty-, AS: Yeah. NW: And I think, if we keep pushing, or you keep pushing on that message, I think you’ve got the-, one of the most unique opportunities, not only because of your size and scale, with 30 million plus customers, not all the insurance companies will cover life, health-, AS: Yeah, we are-, NW: I mean, that’s very unique, right? AS: One of the only composite insurers, yeah, yeah. DB: So, this is going to be a fun one. About six months ago now, and you’ll probably see how much you squirm in your chair, when I go through this one-, CW: Okay. DB: So, Mark Wilson, the Aviva CEO, said that he wanted to turn Aviva in to a fintech. And we’ve heard quite a lot of bank CEOs say this, you know, that, “We’re not a-,” “We’re not a bank, we’re a technology firm,” and-, CW: Yeah. DB: And actually, some of them, we’ve seen real purpose in making those changes actually happen-, CW: Yeah. DB: You know, they’ve put it in to effect, they’ve made significant cultural changes, or investment changes. How has that manifested itself? AA: So, I remember working at the very first hackathon Aviva ran, it was 2014, I think, and we managed to get Mark along to judge it, at the end, and he’d never seen anything like it. Because he came in at the end of the weekend, and it smelt of, kind of, old pizza and Haribo-, [Laughter] AA: And you know what it’s like, and he couldn’t believe-, he couldn’t believe that people had worked all weekend for nothing, just to create things, and he kind of, just, he got it, as a-, as a vision, that if you give people a vision they believe in, and give them work they’re passionate about, then they’ll actually deliver for you, because they want to, not because they’re paid to. And I think that, for me, working for Aviva in the longer-term, it’s really about letting the customer choose to interact with us, in the way that they want to interact with us. So, as we’ve said, it’s a really diverse range of things that they might want to talk to us about. They might be at the side of the road, after they’ve had a car accident, they might be claiming on their life insurance, which is a really awful thing to have to do, they might be trying to change their address, and digital might not be a good solution for all of those things, or, it might be a great solution, but what we want to create is a company that you can interact with in a, kind of, omnichannel way, and you can choose how you engage with us at different times, and you can pick up your journey as and when you’d like to, whether it’s through the app, or online, or through the phone, or so on, and I think, to me, that’s kind of what the company should be about. It’s about giving customers options to interact with us the way they want to, and giving them that, kind of, customisation, so that we treat everybody the way they want to be treated, rather than just a blanket approach to everybody. AS: Yeah, I agree. I always find this question quite funny, because if we’re not going to be a fintech, then what are we going to be? Like, are we just going to do everything by paper and pen? Um-, CW: [Laughter] typewriters in the back. AS: Yeah! Exactly! So, I kind of-, I feel like, I mean, that is the only direction we can go in, if we want to survive. DB: I think it’s the “if we want to survive” but, isn’t it? Because I think at any, sort of-, AS: And we do. [Laughter] DB: Just to-, just to make sure, yes. AS: We would like to survive! DB: But, I think it’s like any-, any, sort of, and there’s the, sort of, Nokias, and the Kodaks, and all the, sort of, examples that you can, kind of, throw out there, but I think at the point where there’s any particular big pivots in industries, people can choose not to do it. You know, in the way that I can choose to smoke 100 a day, and have a fry-up every morning, if I really wanted to. [Laughter] DB: It’s not going to do me any good, I’m definitely not going to get health insurance-, CR: Your life insurance will be very expensive. CW: Bad idea-, DB: Yes, I don’t do that, just in case you’re listening, by the way, but-, but I think it’s like, you can choose not to do those things-, AS: Yes. DB: And, actually, choosing to, and, you know, actively, kind of, investing in places like this, or-, or startups, or really, sort of, looking at changing the culture to one who can adopt technology-, AS: Yeah-, DB: That’s the step, isn’t it? AS: Yeah, and I think we have definitely taken that step. I think we have the-, the approach that we’ve taken to innovation has been quite diverse, and in, kind of, comparison to our main competitors, we have taken a lot of different routes, and, so, for example, one of our main competitors, kind of, only invests in startups. We do that, we co-create with startups, we bring them on as-, or procure their services. We do a number of different things, and I think that’s, kind of, evidence that we’re taking it really seriously, and that we-, you know, we want to survive. NW: Well, it’s that curiosity, as well, isn’t it? Because we often talk about those three methods, whether it’s co-investing, whether it’s the corporate venture fund, with the team that are here, whether it’s the establishment of the digital garage, or digital facilities around the world, no one answer will necessarily be right in each geography, but the fact that you’re being curious about all three might mean nine out of the ten fail, but the one that succeeds actually changes the game completely, whether it’s home services, services for life and pensions, or elsewhere, but, actually, the fact you’re exploring all three, I think is actually quite exciting. SK: The question there, though, and just to play devil’s advocate, is how sustainable is that? Because I-, I-, we see so many different approaches to innovation across financial services, and you’re absolutely right, you get the scattergun approach, “Oh god, let’s do everything,” you get the people who are like, “No, we’re doing this one thing, that’s how we’re going to make it work.” I mean, what’s the long-term vision here? Are you just going to keep doing everything? Or is the plan eventually to go, “Right, now this one’s working, so we’re going to stop doing X, and we’re going to stop doing Y, and we’re just going to do this”? Because, presumably, whilst you guys can do a million and one really exciting things, Aviva is big, and it’s going to take a long time for that one exciting thing to disseminate through the company. So, what-, what’s your vision here? Where do you see this going? AS: Well, I will caveat what I just said, by saying that we don’t just chuck money at stuff. [Laughter] AS: Um-, CR: It would be great-, it would be great if you did. [Laughter] CR: For all startups-, AS: We do chuck money at Colin. CR: For all startups, it would be fantastic. [Laughter] AA: I mean, we take our time, with some stuff. So, we could have quite easily started a-, an accelerator incubator relationship much earlier than we did, and the reason we didn’t was because we were waiting for the right opportunity, really, and when Founders Factory became that option, it’s really, you know, it’s Brent, and working with Henry and so on, it gives us that, kind of, compelling proposition, and reasons for startups to engage with us. So, it’s about, kind of, being ambitious, but not being careless and, kind of, reckless, in terms of the way that you approach it, and I think we’re pretty good at that. AS: I mean, we’re quite risk averse. In the best way possible. NW: But that’s insurance full stop, right? AS: Exactly. CW: Exactly. NW: So, if I now say, close your ears, and say, on the flipside, working with an insurance organisation, is it the same old, we’re running-, it’s too slow, it’s too conservative? Or don’t you see that at all? CR: No, so-, so, back to Mark Wilson’s statement, right? You know, “We want to be a fintech company,” which is a-, a statement of intent. So, the world is moving very quickly, and insurance has, historically, moved glacially slow, for good reasons, as well as bad, but what you don’t want to be doing-, what you don’t want to happen is to be caught out. You don’t want to be displaced by someone who just got off the mark quicker. So, I think that isn’t the case here. Things have, at least what I’ve seen, in the, sort of, two years that we’ve had a relationship, things have moved very quickly, and my-, my impression of working with Aviva has been-, has been very positive. So, we get a lot of support, as a startup, both in terms of help with assets and strategy that we wouldn’t necessarily be able to develop ourselves, because we’re still learning. You know, we’re five founders, but-, and we’ve got experience, but we’re still learning, and gaining access to that, but also, gaining access to talent within your organisation, which we would otherwise have to pay for, which-, that is-, that’s very positive, rather than just, hands off, “Here’s some cash, go away and do a business.” NW: And, of course, the opportunity to have 30 million customers on your next-, CR: That would be fantastic. Yeah. [Laughter] DB: So, that-, that all sounds awesome, and, like I said, clearly this is an awesome place to be, as well, in terms of the garage, but, what’s left? What’s next? What’s to do? AA: I think it’s around the execution, really. So, this building looks great, and it’s really nice being here, and so on, but it’s really in how you execute some of this stuff, and become quicker at, you know, meeting a startup, being first to market, finding ways to test with them, and get that learning in, and so on. It can be-, it can be difficult at times, you know, especially depending on what they want from us, it can be quite difficult, and the other thing is that, getting past this idea that all these little startups are lucky to work with big old Aviva. It’s not really the case, anymore, actually. Much-, a lot of these startups are highly rated, lots of investment, lots of hype and interest. They can choose who they work with, and everybody has a garage now, everybody has people trying to do what we’re trying to do, and we have to find ways to be compelling and attractive to these startups, to encourage the next Cocoon, or whoever it’s going to be, that we’re the right partner for them. And I think showing that we can execute well, and quickly, and deliver great results for them, and for us, is probably how we go about doing that. The buildings look great, obviously, but it’s just a starting point, to creating the-, the culture to deliver on that. AS: Yeah. Yeah, we’ve sort of-, we’ve-, we’ve built the spaceship, we’ve launched the spaceship, and now we need to, like, turn on the turbo boosters. Like, we need to-, DB: Sci-fi references! AS: Yeah-, NW: There’s a Star Wars analogy coming, isn’t there? AS: It’s that Star Wars chat. Um, but yeah, we need to now, kind of-, we’ve-, we’ve got the foundations, and we’ve got an amazing network, we’ve got all the relationships, but now we need to do it faster, we need to do it better, and hopefully, all of the successes will continue to roll in. AA: And you wouldn’t believe how much boring stuff we’ve done in the last couple of years, that no customer will ever see, but will massively improve their experience. AS: Yeah. AA: Things like, you know, aggregating databases, and all sorts of boring backend stuff like that-, NW: Give us your best boring bit. Come on. AA: Oh, I-, I don’t think any listener would possibly want to hear about it. SK: No, but they are so important. Like, we have this backend/frontend conversation all the time, and, like, you can’t deliver anything shiny on the frontend, if the backend won’t talk to the other systems, right? I mean, to put it in its most simple terms. So, that’s really interesting to hear, as well, is that you’re not just focused on, “Oh, look, a shiny new tool for our consumers.” AS: Oh, no. No, this-, it’s been pretty much our-, our focus, for the past, kind of, two years, has been fixing the stuff in the backend, that needed to be fixed, before we could then go and build the shiny stuff. SK: And that enables you to go faster, presumably, now. AS: Yeah, 100%. SK: Now you’ve done the groundwork, which is-, which is fascinating, because we see so many large FIs that try and do it the other way around. AS: Yeah. Mm. SK: They try and build a shiny new toy, and then go, “But it doesn’t talk to anything.” So-, DB: So, we’re coming to the end of the year, and actually, probably the end of the podcast, pretty soon, as well. So, what-, what does 2018, sort of, look like from you guys’ perspective? What are you expecting to happen in insurtech? What are you happening in-, in Aviva, generally? AS: In Aviva, generally. Well, I-, I would like to be building some great businesses, with Founders Factory, as the person that, kind of, liaises with Founders Factory, that’s my main role. I’m excited to see what comes out of that. Um. I don’t know about you guys. CW: So, internally, we are, as you say, focusing on better, faster, more efficient, so, looking very deeply at our ways of working. AA: Yeah, we have some really interesting stuff going on with connected car, that we can’t talk about yet-, SK: Ooh! CW: Yeah, there’s lots of stuff we can’t talk about, unfortunately-, [Laughter] CW: There’s lots of great stuff-, DB: You tease you! CW: That is the buzz-, those are the two buzzwords of the moment, the connected car, but I think they’re-, with reason, I think there’s a lot of stuff coming there. DB: Well, you’ll-, you’ll have to come back soon, and tell us all about it. AA: Oh, I’d love to. AS: 100%. NW: And if you had to choose a part of the business that’s going to change the most, then, over the next 12 or 24 months, is it life and pensions? Is it health? Is it general insurance? Is it something else? AS: I think probably health. It’s-, there’s a lot of ethical debates in health, I think are going to make a real-, NW: Genetics-, AS: Yeah. NW: How we can use genetics and the data that goes with it-, AS: Over the next few years, I’m sure. NW: I mean, it’s still banned in the UK, from my understanding, right, until 2019, therefore we can’t do anything with it, but when that changes-, AS: It’s going to take a long time, I think, to debate the-, all of the elements of that, so, I think that’s going to-, NW: And if we thought we had moral and-, and ethical challenges in the previous conversation-, AS: Yeah, exactly. NW: This is just going to get a whole load more complex, right? AS: Yeah. Yeah. AA: Yeah, it goes back to the point around trying to be fast versus being-, being reckless, and obviously, being reckless with people’s data, being reckless with people’s information, and their trust, and so on, it can have a really negative impact, as well. So, it’s about trying to move quickly, but also being responsible, at the same-, the same time. DB: What about you, Colin? What’s going on in 2018 for Cocoon? CR: Yeah, lots of exciting stuff. So, we’re really focusing on the, sort of, AI component of our products, and making that smarter, and learning quicker, and adapting to your home faster, as well. So, that’s a-, one of the big things that we’ll be doing. There’s so much on the roadmap for such a small team to get out, but the team are great, and we’re really excited about that. And then, we are already in, by proxy of selling through Indiegogo, and a few others, we’re in about 65 countries around the world now-, DB: Wow. CR: So, there’s definite expansion in to other territories, and we’re now growing in retail. So, apart from the exciting tech stuff, there’s the business end, which is really important, so, yeah, hopefully, we’re maturing in to a fully-grown business now. DB: Very, very cool. Well, that’s all of our time, unfortunately. It went by really quickly, it got very dark outside very quickly. Christmas lights looking nice outside, but, unfortunately, that is all of our time to go. So, thank you very much for joining us. So, it would be good to get a bit of a view of where everybody can find you guys. So, Claire, where can people find out more about you? CW: Yes, so, I’m on LinkedIn, I’m on Twitter, @sinclairezx. DB: @sinclairezx? Damn. CW: Yes, as in the-, the computer, yes. DB: Somebody must be trying to pay you a lot of money for that one. [Laughter] DB: I know where to find you. Anna? AS: I’m on all the usual social media channels, under @annafloss. AA: Yes, and I’m also on Twitter, @alexjallen. DB: Colin, where can people find you? CR: You can find me on LinkedIn, that’s probably one of the best places, and also on our blog, Cocoon.life. DB: Very, very cool. And why don’t we do it for you guys, as well? Sarah, where can people find out more about you? SK: Probably on a podcast [laughter]. Um. I’m on Twitter, @SarahKocianski‏. NW: @NigelWalsh, Twitter. Nice and simple. DB: Everywhere. Find Nigel everywhere. And that’s it. Remember, if you like what you’ve heard, please leave us a review on iTunes, we love listening to those reviews, and if you liked the chat, come and talk to us. You can find us on Hello@11FS.co.uk. Until next time. Thanks! Bye! End of Audio