In the final episode of Season 5 of Making Risk Flow, host Juan de Castro sits down with James Platt, Co-Founder and Operating Partner of Trimstone Partners, a boutique strategy consulting business focused on supporting major strategic change in the insurance, asset and wealth management industries. James has an illustrious career in operational transformation and technology innovation, having played pivotal roles as a consultant and partner at Boston Consulting Group and as the CEO of Digital Solutions at Aon.
Together, Juan and James discuss why James believes the combined ratio is the worst thing that ever happened to the insurance industry, the reasons why the industry hasn’t evolved as successfully as the mortgage and asset management sectors have, and why data, digitisation, and decision-making can be the levers for change.
Listen to the full episode here
Juan de Castro: Welcome to another episode of Making Risk Flow. And as I was reflecting on today's episode, I thought as an industry, we often talk quite a lot about either the generalities of the challenges of the industry, or we get very deep into technical discussions about data technology. And in today's episode, I wanted to bridge both of them by bringing a guest with intimate knowledge of both the strategic future of the industry and how technology and data enable that transformation. But almost as importantly, somebody who's been in the trenches. I think often things seem easier from the outside. Today's guest has been there, led the transformation, been a senior executive in the industry. I'm referring to James Platt, who brings an impressive background, that intersection of technology, strategy, and data. So James, thank you so much for joining me today.
James Platt: Juan, thank you. And it has felt like I've been in the trenches quite a lot over the last few years with Aon. Just stepped out, Juan, now to actually start my own consulting business, Trimstone, but I still want to be in the trenches.
Juan de Castro: Absolutely, you briefly touched on your Aon role, can you give us an overview of your background? You've bee in many different roles in many different places. So give us an overview of what you've done.
James Platt: Yeah, sure. So actually, I started my career, Juan, in the military. I don't know if I told you before, but I was a military engineer and then became a consultant, which I know, for many of our listeners, is probably a hated profession. But I spent quite a long while, 40 years at BCG. And then Aon was one of my clients. And I like what they're doing. I loved the team at the time. With BCG, I'd been leading data analytics for them globally and doing a lot of insurance work, and Aon said, “Come and join us, lead our data analytics in the risk space, and lead Inpoint, our consulting business.” So I did that for a while. And then actually, it became clear in Aon that the challenges were how we changed ourselves. And I was lucky enough to work as CMO there, and as you say, lead what I think was quite a great transformation. Albeit with its challenges, it's always an ongoing thing. So lots and lots of mistakes, which hopefully we can learn from. And then about a year ago, I left and have recently, I say, founded a new consulting business, because I feel the current consulting models probably don't give us all what we need and we can think about how we support clients in different ways.
Juan de Castro: Yeah, and probably leveraging that experience of having been in the industry for a number of years. And so both of us have been management consultants in the past. So almost like in the pure management consulting style let’s start top down, right? And almost start with an overview of, in your perspective, what are the biggest challenges of the industry?
James Platt: Can't believe, Juan, you've admitted that we've both been management consultants before; at rival firms. Look, for me, on some level, the big issues for our industry are obvious. The biggest is cost. And, you know, if we take a dollar of our client's money and we actually burn nearly half of that in the transactional costs. And I think that is hugely telling. And I think of all the issues, all the challenges, if we could reduce that significantly, we could perhaps tackle the other issues. But what I say on cost, though, is I think the combined ratio is probably the worst thing that ever happened to our industry. And the number of things wrong with it. One is it spreads costs over very dissimilar parts of people's books, and so it's taken a long time for us to understand cost properly. The more I thought about it, Juan, the more I looked at combined ratio, we focused entirely wrongly on it. If you think about the combined ratio, most insurers I've worked with or work with try to drive the loss ratio down. It seems a sensible thing to do. But if you look at it from a client point of view, it's entirely the wrong thing to do, you know, can you imagine saying to a client where it's great and they only give you 40 cents back on your dollar? So we are driving the loss ratio the wrong way completely. And the reason, obviously, is that our expense ratios are too high. But imagine a world where we have an 80% loss ratio and a 15% expense ratio. And I'd love to come back to that a little later. But cost is, to me, the biggest issue. If we could actually challenge our transaction costs, we would change. But service alongside cost, it takes policies hundreds of days to put out invoices. Cash reconciliation in many places is disastrous. And look, maybe our claims performance, we've focused on that, I think as an industry. I actually think our claim performance is better. And then lastly, all the issues that everybody knows, relevance. You know, as we've moved from this world of going back 50 years from physical assets to intangible assets, we have not followed. Whether it's cyber or reputation, our ability to protect intangible assets, close the catastrophe gap, you know, and I always cheer, I think it's 1983, which is the year where we had the highest relevance to be measured in terms of insured losses as a percentage of GDP. So ‘83 was a highlight for the insurance industry. But I'd say overall, I mean, there's a great quote by Oscar Wilde, and he says the cynic, and I'd put the insurance industry, is in danger of becoming that cynic, knowing the price of everything and the value of nothing.
Juan de Castro: That's why I really like your controversial statement on the combined ratio, right? Because it almost feels like we've just accepted that the industry is inefficient, which is the expense ratio, right? And said, “Okay, well, the only thing left then is the loss ratio.” But I think I really like your perspective on, from a client perspective, you're almost focusing on the wrong thing. The customer wants to transfer the risk effectively and then get back as much money as possible. So honestly, as we think, okay, that's a fantastic summary of your view on the challenges. The first step to then try to solve it is understand why is that the case, right? Why are we in this situation?
James Platt: I think this calls for us to look at us compared to other industries to understand why. And maybe two, if you can bear with me, I'll do two analogies, which both I think are relevant. If I went back to the ‘90s, and I look at what I thought was the most analogous process, it was mortgage applications. My wife started her career in banks doing mortgages, so I knew the pain in the ‘90s of doing mortgages. Hugely complex process, lots of stakeholders, paper moving around. You have to make decisions. In terms of the mortgages, I was a bank manager at the time, it looks really similar to commercial insurance. But if you look today where a mortgage process is, it's digitised. It's almost instant. You get a result very, very quickly. Your experience today is massively different from the ‘90s. You look at commercial insurance, and it looks pretty much the same. We’ve started to say, “Hey, why do we have a cost and service problem?” But there's maybe one industry that I think we can learn from. And it's certainly not a paragon of virtue and something that people would say. But if you step back and think about the asset management business and the progress they have made. I've looked at this and looked at the numbers, I think they're star, you go back to asset management in 2000, this is a 7% return business, roughly at the time if you talk equities, and the cost of the consumer investing in equities in 2000 was broadly, you'd be paying about three percentage points. Today, the return, you can argue, is up or down. I'm certainly looking forward. But the return's about probably 7%. The cost of investing in equities today in asset management, somewhere probably, depending on your portfolio and your willingness to have passive, 0.5% to 1%, a 70% reduction in costs. Imagine, going back to what I think about the combined ratio, imagine we'd done the same thing in that period. Then we would have an 80% loss ratio and a 15% expense ratio. So they have done it, and we haven't done it. And you've got to say, well, what did they do? And then you reflect those against insurance. So first of all, they standardised products. Are our products standard? No. They consolidated massively across large parts of that industry to generate scale. Have we consolidated massively? No. They brought in new technologies that really did impact expenses. If you look at asset managers' expense ratio over the last 20 years, they've halved from efficiency, from expenses. But then they did a couple of other things. They moved to platforms for distribution purposes. So suddenly distribution costs fell down and advice became something that you needed to pay for if you really wanted it. And then they shift from active to passive type investments. I wouldn't make that slightly analogous to portfolio versus individual risk underwriting. The combination of that reduced cost by 70%. If asset management can do it, why can't we do it? And what's fascinating about insurance, it should come under the medicine of issues, but insurance can be innovative. I laugh about the insurtechs, Juan, because everybody acts like, oh my word, all this stuff coming out of Silicon Valley. It's really interesting. What about Cardiff? More innovation, I think, has happened in the UK motor insurance market than almost any other digital play. The emergence of DirectLine originally on the phone, the aggregators, Hastings, Admiral, how they change models, how they digitise. So insurance can be innovative, but we haven't cracked it at all, even asset management has.
Juan de Castro: I think that takes me to when you use this type of analogies, okay, similar or adjacent industries have done it, why haven't we, right? And there are so many similarities. There needs to be something that is different about insurance, right? And I think you mentioned a couple of drivers about standardisation of product, we haven't done it. Consolidation, we haven't done it. Distribution. So what's your hypothesis? So first of all, why? And second of all, will we ever?
James Platt: Well, yeah. I mean, Juan, good question. It's easy to find issues, but harder to somehow solve them. So if you look at the difference, and I've spent quite a lot of time thinking about, well, why is it proven so difficult? Because it's pretty embarrassing that our expense ratios look like they did in the ‘90s. It's pretty embarrassing. So first of all, I think it comes down to maybe two things. One of them is Darwin. And I think if you look at banks and how they've improved, any individual bank improving its mortgage processes got the benefit and therefore directly was able to benefit from improving their technology, making the process faster, and beat the competition. If you compare that to insurance, that hasn't really been the case. If you improved your processes, the end-to-end was still equally difficult because you live in an ecosystem that the banks haven't had to deal with, not the same way that we do. And so I think the fact that the end-to-end, to make a real difference, it's lots of players, that's really held us back and made it more tricky. And if you look at asset management, not only have they had competition, I think the regulators have also driven a lot of that change because it's very much, I've talked about a consumer-focused market, and I think we have been somewhat shielded. If you really, really looked at it and said, you know, the amount we're taking, I think at some point regulation probably will push. But those two things together, Darwin being at work, not having an ecosystem, and some heavy pushes from regulators made a big difference to that. But the exciting bit is I think it is shifting. I think, you know, we talk a lot about Generative AI and I'm sure we can come onto it and how it's going to change things. But what it means to me is that you can now get real gains changing your bit of the ecosystem and it's easier to do than it was before. I think the client pressure now has shifted. You know, if I'm a client, I'm looking at my personal life and what I do and the fact that I can do my grocery shopping online, the fact that it's really simple, my banking's online and quick and convenient. My mortgage process is instant. I'm getting my asset management done on platforms and I come back to my world insurance and it's not. And now I'm saying, well, that's just not acceptable. And the client pressure. So I think this is a need to drive service and is going to put pressure on us to change as an industry. But last thing I'll say, I don't want to, it's very easy for me to sit here and go, this is all really easy. Matching risk to capital. Is not an easy task. It is not really like mortgage applications. I know that. But I don't think doing asset management is easy either. But, you know, there are some nuances that we do have to overcome.
Juan de Castro: Yeah, because that was exactly what I was thinking as you were describing it, right? So at least the mortgage example, sure, I'm not doing justice to the mortgage industry, but I would think it's a simple product, right? In the end, you want money to be able to pay your house and the bank needs to assess the risk of you defaulting, right? So whereas if you look at, especially mid-market and large commercial insurance, the risk has many more facets.
James Platt: Yeah.
Juan de Castro: And I guess just to prove my point, you look at the more commoditised segments of insurance, right? So like car insurance, home insurance, where products are more standard and it's easier to understand the risk, that's happened. So I guess just to make it do justice to the industry, right? I think there's some reason why it's probably slower. So in a world where products are more complex, what should we do?
James Platt: Yeah, I think it's a fair pushback and it's very easy to not think because you're saying that to your point, there are parts, personal lines, motor in the UK where there's been huge innovation improvement. So yes, at some level, I think, what do we do? Well, if the definition of insanity is doing the same things over and over again, expecting a different answer, it's not what we've been doing. I mean, I think that's clear to me. You can't keep doing the same thing. And a bit like the issues, I think the levers you need to pull are somewhat obvious. The real challenge is twofold, how do you pull them? And then how do you actually make that happen? Because the levers to me are data, digitalisation, and decision. They're key levers. Everybody knows what they are. But the challenge for us is doing that together and doing that in an ecosystem. It's interesting. I've listened to a number of the podcasts that you put out before. And these topics, actually, you have covered a number of them in quite a lot of detail. So I'll try not to just repeat other people's podcasts, which I could do. But let me maybe just go through them and sort of give you my take on those. Data. All our industry does, it's really funny, right? All our industry does is move data around and create documents on the top of it. Now, if you look at it that way, it really is all we do. Yet we're bad at moving data around. And we're bad at it because we don't have and really adhere to common standards. And you had Clive Buesnel on here a little while ago, I think, talking about the need to create a small amount of common data that we all use and then accepting that the data around that will never be fully connected, et cetera. You know, I listened to that. I totally agree with that way of thinking about it. But we together have to define that core and have to use it. You compare this to banking again, they move a lot of data around through their transactions. They have a common system. If you want to go to a Canadian bank, it's a common system. It's very clear. There's no losses. It's absolutely clear. You try to do the same thing in insurance, it's not clear. We have allowed that to happen, you know, as a set of different players. So look, the work that's being done in Lloyd's now, their new Blueprint will help in Lloyd's. But is that going to follow around the rest of the world? Because it has to. We're an international business. But Clive covered that in a lot of detail. I think the one thing I'd add is I think again, Generative AI allows us to bring in lots of data. If you can get that core out, Generative AI allows us to think about data and deal with fuzziness in a way that we never could before. And that's to me quite exciting. Second step. I obviously, you know, a little bit about that. I should say. Second step is digitising our processes. The cost of doing this historically was huge. No code, low code to me, I think changes the cost of digitisation for us dramatically if people accept it and bring it in. So I actually think digitisation has become much, much lower cost activity. But the third bit is really the ask to me is how we decision. And I think we have to look at ourselves closely and look, it seems I was an intermediary. I'm always going to not underwrite it. So it's all about risk decisioning. Actually, I think decisioning and underwriting is a cost that we don't need to bear. You know, I look at it a bit like, you know, how often, Juan, do you use a map book? You know, I started using SatNav a while ago. I accepted that maybe SatNav could make decisions better than me when it came to finding routes. Clearly needs a bit of oversight. I have to put in where I want to go and I have to give it information, but I still think I'd prefer that to going back to a map book. I struggle that we really feel we need as many people today as we do to do this activity. And I think you go back to asset management and you ask yourself about active versus passive and what's our equivalent and how do we do this? So that's one area. I know it's a sensitive area, but I think we've got to look at it really carefully. But the one that's the real one is more an intermediary issue, but it's an everyone issue, which is how we match the risk to the capital and the process for doing that. And I think our value chain is brilliant, but I think it was designed for a period where we had no data. It was designed for a period where you had to spread risk against many players to manage everybody's risk, but you didn't know a lot. So you took a bit, you passed them off. You pass it on through intermediaries and they pass it on to another risk carrier, and that sort of went up the value chain. It is highly expensive to run. There are many, many mouths to feed on that value chain. I think anybody looking at how it works today would say that is not efficient. And what we tend to do is create more intermediaries. You know, suddenly we have the MGA world popping up. Now, MGA has a lot of value to add in certain areas, but it's another link in the chain. Retail, wholesale brokers, reinsurance brokers, multiple carriers. Couldn't we just find a way of understanding a risk, raking it into pieces and giving it to the capital it needs? Now, the capital would have to tell us what it needed, which can't be somebody going, I like that and I don't like that. You'd have to eventually do that in a more systematic way. So this is certainly not just brokers, this is everybody. But I do think if you've got that right, you could get 20 to 25% out of our transaction costs, which is obviously massive. And then that would allow us to have better service. And that would allow us to tackle some of the risks that we struggle with today because our costs are too high.
Juan de Castro: It's funny that you mentioned the number of steps in the value chain, because that is something that those of us who come from other industries and eventually join insurance, that's one of the things that took me the longest to even understand, to take a US risk all the way, how many steps are there? Is it the retail broker, the wholesale broker, the London market broker, and the insurer? To your point, the reinsurance broker, the reinsurer, the retro. So in each of those steps, obviously, I mean, they need to survive, right? So there's commissioning for each of those. There's a total raking of data. Each of them have a different way of defining risk. So one of the things I was thinking, so you mentioned obviously standardisation of data, which I'm a huge believer in. I just wish that had happened many years ago. But at the same time, to be honest, I'm becoming more sceptical about our ability to do it. Again, going back to the point about how many players there are in the value chain, you need every player to adapt to those standards. It sounds easier said than done. Adapting standards really means an insurer or a broker changing legacy systems and investing money in technology. At the end, you're going to almost drive efficiencies through the standardisation, but you're going to add a lot of cost in systems to be able to adapt to those standards. So to me, it's slightly less clear how long it would take the industry to actually kind of adopt standards end-to-end. And almost I'm thinking now, especially with Gen AI and large language models, is should we? This is one of those problems, but is it more efficient to tackle the problem of standardisation or is it nowadays better to just leave it as is and use technology to overcome the efficiency challenges?
James Platt: Well, I think that challenge is a great one. And I think that Gen AI allows us to tackle it in a way that we couldn't before. I mean, to your point, I mean, and it may make an excuse not to. I think however you think about it, though, we need to create end-to-end systems that are more efficient.
Juan de Castro: Exactly.
James Platt: And you're right. The idea of common data that runs across our whole industry, it's never happened so far. And actually to your point, Gen AI actually makes it almost less likely because now maybe you don't need to. And I mean, that's a very, very fair challenge. And look, I don't have a perfect answer, but I do suspect that, you know, there will be some players that come along and start to think about capital and risk matching in new ways. I think some of the large intermediaries, which own the client relationship will come under severe client pressure, and I think that will make them start to think about the end-to-end, going back to this let’s increase loss ratio and decrease expense ratio, and I think that will force some different behaviours across the industry because whoever cracks this and is willing to really revolutionise and really offer that back to clients in different ways will force big change. Maybe regulators will look at it as well.
Juan de Castro: I think, I mean, to some extent, I was playing a bit of devil's advocate, right? But we are just thinking about, whether we are trying to solve it in the traditional way of solving this type of challenge, or is there a better way? And only, I think, history will tell what's going to be right.
James Platt: No, it's a great chat.
Juan de Castro: But I think your core concept is about simplifying the value chain, right? And streamlining it so that, in the end, the client is not paying for 20 handoffs from one player to another.
James Platt: It sort of says, right? It says simpler value chain, more complex transaction. And in some ways, you know, AI and some of the tools are set up to maybe do that in new ways. But yeah, you've got to make the capital, you've got to make the risk provider understand what parts, what volatility, what correlations, et cetera, et cetera, the risk is wanted, and then play it back. And so this is certainly complicated. And it comes back to your point around why mortgage purchases might be good today and insurance hasn't quite got there.
Juan de Castro: So we've talked about the perspective of the whole value chain, right? But then if we go almost one level down, which is what is the role of an individual broker or insurer? How should they be going about this? And obviously, you've been a COO before. What would be the tips on how individual players should be thinking about?
James Platt: So I spent, I mean, I spent a lot of time trying to think about this, both, you know, as a COO, but also different types of consults to other businesses over the years. And I think what has changed now is how you get scale and how you build speed and create technology change cheaply. And in the past, you tended to try and build scale into technology, especially big organisations. Now, maybe little organisations or smaller organisations have always been more than that, they've always done it this way. But large organisations would really try to centralise, would have large technology teams, or would bring in large technology providers and would try and generate scale internally. Technology was pretty well understood and they would build these monolithic platforms, which frankly, as we all know, were extremely painful to put in place and never quite got to what they wanted to do. But what's interesting now to me is, A, the new technologies we have and the speed of development of them means there's no way you're going to do that internally. There's no way you're going to do the speed of learning you need to do because you don't really know what's going to work and what's not going to work. You need to get the scale and you need to get the learning from outside. You need to work with fast and nimbler organisations, by the way, many of which will have failed, but the ones you'll try to work with are the ones that didn't fail. So they've already done the learning. And if you can find a way to bring them in. And to deploy their technologies, and to integrate those technologies, I think you have a much, much quicker, faster, lower cost way to change and drive. And the beauty again is going back to things like low code, no code, Generative AI, I think you can integrate in ways you never could before. And I think you can bring these things in ways you never could before. So that's the mindset. I mean, that's where you've got to go. And I look at some of the remarkable firms that are out there at the moment providing some of these capabilities. But to one story just from internally of us trying to change, right? So I won't say exactly who, but we decided a few years ago that we wanted to bring in a digital insurance capability. We felt that we couldn't build it fast enough, there were firms out there that had this digital insurance capability, and I got introduced to the CEO of one and was impressed by what they were doing and thought I'll partner with them. And we'll bring them into Australia, we'll put them in the US, and we'll start to use this firm and partner with them. And the second you do that in a large corporate, you start worrying. You start worrying about, hold on a second, what if they run off from us and they go to our major competitors and they take all the IP that we've built together? What if they collapse and fail? And we've had problems previously with smaller firms that had failed. How can I be sure? How can I really trust a small firm to deliver this thing? We're a big firm. They won't have the capabilities. Those are really good questions, and they're not easy ones to answer. Our solution was to buy them. It was the only solution we could find. I remember talking to them. The only thing I can think of, we want to work together, we need to acquire you. And we did, and it was pretty successful in many ways. But you can't always buy a firm. So there are a bunch of issues that aren't technology, which are real around risk and around complexity and confidence and commercial confidence that you need to solve if you're going to use these verbs. So, you know, I don't have the perfect answers here. In fact, most of the stuff I've done has gone wrong as much as it's ever gone right, but I do think the only way you're going to deal with this is with new technologies.
Juan de Castro: Yeah I'm now curious is that company one with a Spanish founder.
James Platt: It may have had a Spanish founder. Yeah, no, I mean, having to deal with Spanish founders, is obviously tricky. They're an impressive organisation, but it was challenging.
Juan de Castro: Yeah, so a couple of thoughts to build on what you just said. So one is, you're an advocate of bringing external help, not trying to deploy monolithic solutions to solve everything, divide and conquer, right? And saying, let's bring different partners for different parts of the value chain. And that is something that I talk about quite often with clients. And two questions on that. One is, how do you structure that programme of change, right? Because you need somehow a target state and a target vision, but they always start somewhere. And related to that is, where do you start? Yeah, I would love to hear your thoughts on those two.
James Platt: I think the one thing is you do it. And the starting point, at least for us, as we started to think about this, and I don't want to pretend that I'd solved this in my prior life. I certainly haven't. But finally, if you come back all the way to data, if you want to make this work, you have to have a strong view on data internally, because you've got to integrate it into something. And if you're not integrating, if you like, into technology, you're integrating really into the data. If you have a strong data foundation, clarity on at least your own data. We talked about industry data before and how hard, but if you don't do that internally and have the same data structures, at least, in the core everywhere, and you haven't thought about how to move that data around, it's very hard to integrate anybody. I mean, that to me is part of the starting point, is really thinking about, to your point, how's your architecture? How's your firm going to bring these other organisations in and do it in a way that is easy? And of course, the beautiful thing now is that actual API technology, et cetera, is progressing massively. And so if you've got that strong data foundation, it's actually quite easy to integrate into it. And you can integrate legacy and the new world together around that data. It's always fascinating when the one thing for me that is, I think every leader, myself included, has a view of technology 10 years back. It's very hard to have a view of technology today, right? You always imagine the projects that went wrong, and most of us have about a 10-year life cycle. And so, you know, I think what's possible now is pretty amazing, but we're all still looking back 10 years that it was difficult. But the other part is people. And what makes our industry, I think, wonderful, and maybe people have to, I mean, this podcast, maybe it's wrong, but, you know, it's all about, hey, we can replace people with technology. But it's the people, whether that's an underwriter, a broker, an actuary, whoever, right, a technologist. And I think the barriers to really doing a lot of this, they’re natural change barriers. There's a great book out there, if anybody ever wants a good read, called ‘Uncommon Service’, and it talks about the importance of people in an organisation who can get stuff done. You know, when you have a difficult organisation, you have this person alongside you who can always get that invoice through the system. You know, get the document out on time. And really, these are what I would call service heroes. They're the people that you know that can go in and do it. They're a disaster in most organisations because they're not replicable. They're not scalable. They don't scale. So, you know, in many organisations, people don't want to change. I tried to get rid of a lot of these types of people. They're phenomenal people getting things done. People don't want to let go of them, because they're the only way you can get stuff done. But if you don't get rid of them, or at least bring them together in a different way, you can't scale. So they’re natural change barriers is what I'm trying to get at. But I think if we think about change, the current two systems, neither of them works. One's programme-based change in an organisation. You build a plan. You deliver the plan. You treat people as stakeholders to get them on board for your big plan that you're going to deliver. I mean, we've proven pretty well that that stuff doesn't work very well. And so everyone says, no, no, it's great. It's great. We're going to do agile product-based change. We're going to create a lot of features. We're going to have metrics that we're going to work against. And frankly, if you've got a big technology platform, that works pretty well. In a people-based business, it doesn't. And you go, well, that's both the main methods of change. What are we going to do? Look, there's no easy answer. But I think if you start with people and their objectives, you have a great chance of driving change. And how do you motivate people to do it? One of the things that I was always keen on when we were transforming parts of Aon was building what we call business services. I wanted people to feel good, and so we banned the term back office because who wants to be called back office? It's a terrible term. It makes it sound like people are at the back. Actually, the people in the back office of most firms, Juan, are serving clients every day. They're the people getting the documents out. They're the front of the firm. But they're called back office. But objectives, starting with people's objectives. The last story maybe I'll tell you. You're going to tell me to stop fairly soon. You've heard too much from me. But the best thing I think I ever did, in at least my recent work life, my memorable working life, was deep in COVID. We decided that we'd run an Innovation Olympics. And everybody in my team, every leader, everyone thought I was mad for doing this Innovation Olympics. It's COVID. It's really tough. People just needed to be-, I've run one as well before and it'd been a bit of a disaster because you had 6,000 great ideas and one winner, and so 5,999 upset people because they didn't win. So we called it Innovation Olympics because we thought we'd have a lot of winners. Because what we tried to do was to enable teams. And we got a lot of people to come up with their own ideas. We gave them support. We gave them training. We gave them coaching. And we gave them agency to deliver against their own objectives and across about 12,000 colleagues who could take part, we had about 200 teams, maybe 10 a team, so maybe a couple of thousand colleagues involved. When I left the firm, I got messages, not about, sadly, not about how great a leader I was. I wish I did, but I didn't. But I got people saying, we really like the Innovation Olympics. It's the best thing we ever did. But to me, that was just this point around, if you want to drive change, you've got to get people engaged around their objectives and delivery. And if you can do that, you can cut through a lot.
Juan de Castro: That is a great example of leaving a legacy, right? So definitely you should be proud of that. And just bringing a number of the things you just mentioned, which is absolutely fascinating, together. You've talked about focusing change on what actually is helping people and getting people on board. You've talked about the challenges of data flows. And this is something that we see more and more, obviously, insurers focusing on is, what a good place to start making change, thinking about it. What are the activities humans are doing today to data transformation, but those activities that they hate, whether they are not providing much value, it's just a necessary evil, and start using, bringing Gen AI to start removing them. So almost, if you start doing just digitising data and work goes up front, that's it to leave out a number of the objectives you've described.
James Platt: So Juan look, I mean, I think what you're describing, what you're saying, I think it's absolutely spot on. I think it's amazing, isn't it? That we bring in these new systems, or we have them for years, these great digital systems, CRM, or a new data entry system, or a new thing that's going to make your life wonderful. And then we ask people to use it. And suddenly that means a couple of things. It means we've got to train them on that system. They, oddly enough, aren't always intuitive. It means that they've got to type information into the system, right? I've not met anybody who likes doing that ever, pretty much. And it's interesting in most organisations that how many times do you find senior executives really using those systems themselves. They don't. Why not? Because they have a choice. So they don't use them themselves. They're very happy to have them. So to your point, to me, if you can take away the burden of having to actually input data, particularly, and Generative AI, I think, gives us a chance to do this. So we can input data from anything now. We don't need to. People want the value of a system but they hate putting stuff in. So to your point, I think there's a stack of tasks that you can go about now going after really, really quickly. But you have to, I mean, as much as we pretend, people generally don’t like workplace digital systems.
Juan de Castro: That is a fantastic last message to wrap up the episode, James. It's always a pleasure. I think I opened up the episode mentioning that you bring this absolutely incredible intersectional strategic perspective down towards, how to make change happen. And I think the last 30, 40 minutes have been a fantastic reflection of that. So all I can say is thank you so much for having joined.
James Platt: Well, thank you, Juan. And genuinely, I'm serious, can we get our transactional cost out at 15%, right? Let's all put our shoulders behind doing that. And I think we'll be amazed at what we can achieve. But thank you. Thank you for inviting me.
Juan de Castro: Thank you, James. Making Risk Flow is brought to you by Cytora. If you enjoy this podcast, consider subscribing to Making Risk Flow in Apple Podcasts, Spotify, or wherever you get your podcasts so you never miss an episode. To find out more about Cytora, visit Cytora.com. Thanks for joining me. See you next time.
