CXO: The investment side of insurance

About CNP Assurances

For 160 years, CNP Assurances has been protecting people against the risks of everyday life. Deeply rooted in the public sector, CNP Assurances designs and manages life insurance, pension, personal risk and protection (term creditor insurance and health insurance) products. France’s leading personal insurer, CNP Assurances also has operations in other European countries and in Latin America, with a significant presence in Brazil. Its ambition is to insure all our futures.

The global investment management industry faces many challenges. In this recurrent CXO Corner relay column, we ask top executives to point the way ahead, sharing their views and best practices for meeting the challenges.

Journal: Thank you for taking over the CXO Corner relay from Clare Flynn Levy, CEO and Founder of Essentia Analytics. To begin, could you please give us a little update on your role and responsibilities at CNP Assurances (CNP).

Michel Bois: I am the Group CIO and my role here is to manage and oversee the entire firm’s technology, application delivery, architecture, and infrastructure functions, as well as business analysis. I’m responsible for 450 employees, but we also draw on numerous external competencies, as we try to concentrate internally on expertise, core-business and monitoring of resources. I am also a member of the Executive Committee, which shows the level of importance placed on the role of IT within the company. Before joining CNP Assurances I was CEO of Caceis, where IT also played a vital role. 

Journal: As an executive committee member, do you find the alignment of business and IT strategy is becoming increasingly important? And how is it ensured?

Michel Bois: The alignment of IT with business is an essential point and one of my key duties. When one of our business line is under stress or at the leading edge of the business, it needs to be able to adjust to market demand and maintain a speedy time-to-market.  It is our role to give them the tools needed to get the job done. I see technology as an enabler of our business goals – not the other way around. Our role is to provide the tools and technology that are required to meet customer demands and adapt to these as they change over time. As the business monitors and discovers new trends, we must be fast in adapting our products offering. This takes agility and I think this is where IT can be the driver of competitive advantage. 

Our role is to provide the tools and technology that are required to meet customer demands and adapt to these as they change over time ... This takes agility and I think this is where IT can be the driver of competitive advantage.

Journal: This must require close collaboration between business and IT?  

Michel Bois: I make a point of insisting that we do not develop IT tools alone, but that we always collaborate with the business side. That requires strong stakeholder management as well as a culture of working together. We may be the technology experts within CNP Assurances, but we are not as knowledgeable about the insurance and investment industry as our colleagues on the business side. As a result, we really rely on them to ensure that the products we work on are relevant and useful.

Because we are a large organization, we constantly have a portfolio of projects in play, meaning that we need to be selective as to which ones we prioritize. We find that the more we align with the business side, the more customer-oriented we become in the solutions we develop. Keeping our customers and business users top of mind when putting new solutions through stress testing, we make sure that the technology is reliable, user friendly, accessible, and fast.

Journal: When it comes to technology, how do you see the insurance industry in general – do you think it is a technology leader or laggard compared to banking for instance, which is becoming increasingly customer- and relationship-oriented?

Michel Bois: In property and casualty (P&C), there is no doubt that many insurers invest a lot in different technologies, such as the internet of things, big data, or mobility. They are known to push the boundaries of what may be possible from a technological point-of-view. In life insurance on the other hand, progress is very spread out, and not so obvious. Nevertheless, we are convinced that major changes are coming, and that’s why we continue to transform our digital footprint. Our digital transformation aims to transform the company so that we are closer to our customers, more responsive and more efficient. It is an on-going process and, in a number of areas, we are already ahead of some of our competitors. Ambitious projects have been undertaken to digitalize the customer journey (electronic signature), paperless exchanges with our partners, a big data project with multiple applications, as well as the launch of a 100% digital company in Brazil with a goal to start operations in 2016. 

Our digital transformation aims to transform the company so that we are closer to our customers, more responsive and more efficient.

Journal: Would you say that the insurance industry is getting closer to the customer in order to meet more individual needs? And do you see new players entering the field in order to disrupt traditional insurance companies and the insurance industry? 

Michel Bois: Time to market is top of mind for us. We operate in an industry that is putting increasing pressure on us to be able to rapidly change to new client demands and offer new products. We need to be sure that the development time of new solutions is consistent with the needs of the market and the business. In that sense, yes, we are always trying to get closer to our customer. 

We are starting to see new players enter the market, using new technologies and touching customers directly through the internet, as well as new actors such as aggregators. Both cases could be considered as possible threats for us, which is keeping us on our toes.

Journal: How do you see globalization as a trend impacting the future of the insurance industry? 

Michel Bois: Globalization is not a major trend in the life insurance industry. Life insurance remains a rather local business, specific to countries because of differences in regulation and taxation. So the investors who buy contracts from us, such as savings contracts or protection, are national customers, not international.

In terms of globalization and IT, there is strong alignment in terms of regulatory compliance. Solvency II for example, will affect all insurance firms, and requires that we can calculate our risk ratios and produce all our reporting at a group level.

We are a global operator¹, but we are locally focused in our operations. I would say that the aspects of globalization that affect us are, for example, interest rates, digitalization and regulation. We have a large operation in Brazil, but actually, there is very little overlap/sharing of resources on an operational level.

Journal: CNP Assurances is a French company, can you tell us what the most relevant and impactful French regulatory challenges are when it comes to compliance and reporting requirements that add to the complexity and demands on your IT platform?

Michel Bois: It is mainly Solvency II, IFRS, and a long list of other EU regulations that impact all insurers operating from or in Europe. On the pure French side, however, we are most heavily impacted by accounting regulations. The French GAAPs are very specific, especially on the asset side of our balance sheet, which creates a great level of complexity for IT platforms to cope with. Being able to support multiple accounting frameworks is important here.

Journal: Global institutional investors like CNP Assurances need to navigate an increasingly complex world – how do you see your IT platform as a competitive advantage when it comes to succeeding in the long-term?

Michel Bois: You won’t be surprised when I say that IT is a key element and key differentiator when carrying out the strategy of the company. In my mind there are a couple of core factors that we try to achieve with our IT platform:

1. The ability to move fast: That is a question of architecture and keeping things as simple as possible. In our world we have to be able to move fast. Our investors, the people we insure, the markets, the interest rates, everything changes very fast, so having an agile IT platform which is able to adapt fast is a key element. On the asset side of our business, operating on an integrated system has given us the required agility.
2. Ability to be operational on a 24/7 basis: As mentioned earlier, this is a key point for our business, so having a stable and reliable IT platform that we can trust day-in and day-out is important.
3. Enable people to focus on their core business and competencies: While I am in charge of the IT side of the business, we are first and foremost an insurance company, and must therefore also have a lean IT platform that does not divert attention away from our core business and competencies.
4. IT platforms should not be able to do everything: If you try to do everything then you risk stretching your resources too thinly so that you can no longer be agile. To avoid this, we concentrate on what really matters and on what will really matter in the future. As people increasingly use smartphones and tablets to interact with us, and customers want to interact with us from their living room, we are investing heavily in mobility solutions. There are dozens of other projects that we could work on as well, but it is about staying focused on what matters now and in the near future.
5. IT platforms are used by people: We place a lot of emphasis on training and up-skilling our workforce so that they can get the most out of our IT platform. You can have the fastest car in the world, but if you don’t know how to drive it, then you’re wasting valuable time and resources. We know our future relies on our staff, and therefore we do everything we can to help our staff boost their knowledge.

Journal: Thank you for your insights. To continue the dialogue, whom would you like to hand over the relay to in the next CXO Corner?

Michel Bois: I would like to hand over the word to Klaus Holse, CEO of SimCorp, whom I’m sure with his considerable professional experience will have some interesting things to say about what he views as the biggest challenges and opportunities facing the industry going forward.

1. Our head office is in France, and we have offices in Spain, Portugal, Poland, Germany, Ireland, Brazil, Argentina and Luxembourg