In 2019, AIG celebrates its centenary. What started as an American insurance company in Shanghai is now an international giant. AIG arrived in Bulgaria in 1996. Today it is a household name and the centre of innovation including BPO and industry digitisation.
We are talking about AIG's past, present and future with Christina Lucas, General Manager for Bulgaria. Previous posts included roles in Asia and Latin America.
What did AIG achieve in Bulgaria?
AIG was the first insurance company on the Bulgarian market owned by a foreign strategic investor, dating back to 1996, and led the market in providing innovative risk solutions for over 20 years. In 2014 we stood up a multinational Centre of Excellence in Sofia to serve our European customers in policy administration and claims settlement.Today the centre comprises about 500 professionals speaking over 15 different languages and providing services to thousands of AIG customers across Europe and the 100+ Network Partners around the world.
What makes you different from the other BPO organisations?
A critical differentiator for an insurance service centre is its ability to cope with the complexity of the insurance business. We support core business activities like claims settlement and policy servicing, which require a great deal of professional expertise and product understanding to deliver superior customer service. This creates numerous opportunities for everyone on our team to learn and grow professionally. As part of our Career Development Framework, our colleagues can subscribe to a variety of training courses and programmes customised for their individual development needs. The framework is our commitment to the growth and development of our people and their careers within AIG, and was recently awarded third place in the category Best Career Development Programme in the 'Employer of the Year' national competition organised as part of the 'Career in Bulgaria. Why not?' initiative.
We also distinguish ourselves through our capabilities as an AIG Centre of Excellence. The CoE's perspective is focused on the AIG customer, and we are partnering with internal stakeholders to deliver the best customer experience. We focus on building technical expertise and we actively seek opportunities to enable end-to-end process standardisation and automation. Our internal Process Excellence team has been amazing, running several major process improvement projects at the regional and global levels which have delivered a significant return on investment. In reality, I would define AIG's Sofia Centre of Excellence as a regional business hub more than a BPO, as we are creating a culture of knowledge sharing, problem-solving and collaboration independent of geography.
The outsourcing industry in Bulgaria has grown substantially over the last years. Do you believe that this process will continue?
Bulgaria offers a unique set of external factors that make it particularly attractive to companies that would like to outsource their operations or transfer some of their business processes to another country – favourable legal environment and operating costs, political and economic stability, and a talent pool of well-educated, multilingual people, ready to acquire new skills and competencies. According to the latest annual industry report, by 2021 outsourcing will almost double its turnover both in value and in terms of share in the national economy. I believe that if the government, the academic institutions and the business community work together to address the growing demand for people with technical and professional skills, the positive trend will continue.
However, there is a finite labour pool in Bulgaria and we may soon reach the point at which demand exceeds supply. As industry executives, we need to decide how outsourcing can better serve the Bulgarian economy and society by continuing to create jobs at sustainable rates.
What can companies do to attract and retain talent in this competitive labour market?
Companies should evaluate their employee base to better understand their needs and expectations. In Sofia, we have about 500 employees with an average age of 32. This age group is motivated and innovative in their thinking, and want to be empowered to make a difference in not just the work they do, but in the community around them. At the AIG Centre of Excellence, we always encourage our employees to dedicate time to Six Sigma improvement projects or sign up for volunteer activities to promote internal engagement, and we organise our operations in the best way to make that time available for them.
The millennials also want to see a clear capabilities-driven career path on how they can ascend within the company, in contrast to the more tenure and experiential-based promotions of the past, which is why we created the Career Development Framework that I mentioned earlier. And finally, leading a multi-generational organisation requires a broader set of management skills to develop the best out of each demographic, which we are investing in through enlisting an external executive coach for our senior leaders and developing several layers of management training academies to give our people the skills for 360-degree leadership.
Tell us something about yourself? What motivated you to come to Bulgaria?
I used to work in consulting, and what I enjoyed most about it was the different types of business challenges that I encountered. It's been even more so at AIG. The challenge of stabilising a new and growing services operation in Sofia during times of organisational and socio-political changes, and taking it to the next level through a period of transformation, appealed to me.
How will the insurance market and services change with the advance of artificial intelligence (AI) and other high technologies?
The widespread use of digital devices and internet is putting enormous pressure on industries for digital transformation, and the insurance industry is not an exception. From the new cyber risks which require innovative risk protection, to customers' expectations for a new digital experience during the process of buying insurance or settling a claim, to the growing need to quickly capture and analyse relevant data, the insurance business is facing major challenges and opportunities. The market is already changing and the customer will be the big winner.
Customers will benefit from lower insurance premiums, reduced time to receive their policy documents or settle their insurance claims, and an improved overall customer experience. For example, telematics solutions in auto insurance are already being used to make more accurate risk assessments based on recorded information about one's driving habits like speed and braking, allowing insurers to financially reward safer driving behaviour. Video footage from dashboard cameras, which are widely used to record traffic incidents, can be used as evidence in motor claims and easily shared via cloud technology to speed up claims resolution. In property insurance drones can conduct pre-insurance and post-event inspections and surveys, especially in dangerous or hard-to-reach sites or areas, again reducing the cost and handling time of policy issuance and claim processing. But the real added value to insurance clients will come from insurers applying machine learning and artificial intelligence not only to improve internal processes, but also to provide their clients with real-world data and analytics reports to guide them to the right insurance products or help them reduce their risk and prevent incidents.
What other challenges do insurance companies face today?
The insurance business needs to be more agile to offer flexible insurance products to meet our customers' changing needs, but the insurance customers themselves like consistency in the sense that they do not frequently shop for new risk carriers. As such, internal business growth is a challenge, and requires a significant investment to gain market share. In order to make significant growth, to move the needle, acquisitions will be key. You can see it in the market now with the recent mergers of ACE and Chubb, and AXA and XL Group. Under the previous AIG CEO, the focus was on divestitures to reduce costs and exposures, including our Eastern Europe insurance portfolio. Our new CEO, Brian Duperreault, has balanced a continued review of expenses with acquisitions of strategic partners, such as Validus and Glatfelter.
However, the challenge with acquisitions (and AIG is reaching its 100-year anniversary of growth, which was mostly through acquisitions across the globe) is that you also acquire a book of business that is on numerous unique IT platforms. The standalone systems give us a segregated view of a customer's history of coverages and claims, making it difficult for us to aggregate that information into customer analytics. The drivers for proactive risk management, better pricing, and lower operating costs comes when we are able to consolidate customer insights into a global view to make business decisions. And this again highlights the need for bold action for digital transformation in the insurance sector.
Is AIG prepared to overcome these challenges?
AIG is a company that has a long history and traditions and in 2019 we are celebrating our centennial. The year 2019 represents a rare milestone to recognise and appreciate everything we've achieved since 1919 because of the hundreds of thousands of talented and dedicated individuals who have worked for AIG over the years. And yes, this also means we have the experience, courage and dedication that will take us into the next 100 years and beyond!