COVID Chronicles: Adapting to a New Normal with Arlind Mucaj, HSB, a Munich Re Company

Digital Transformation, Insurance Industry News & Views - May 28 2020

The coronavirus pandemic has had a profound impact on every facet of our lives – and it’s likely that we will be dealing with the aftereffects of COVID-19 for some time to come. With some countries and US states taking their first steps toward opening up their economies, we wanted to know how the insurance industry is rising to the challenges of COVID-19. To kick off our new interview series, we caught up with Arlind Mucaj, MBA, HSB IT Intelligent Automation Product Manager and Chief Experience Officer at InsurTech Hartford. Arlind shares his perspective on the short and long-term impacts this crisis will have on the insurance industry and insurtech.

Arlind, many in the insurance industry have been working remotely for the first time. Leaders have been managing distributed teams and everyone has had to learn to collaborate 100% virtually and stay focused and productive. How has your team stayed connected and what are you finding works (or doesn’t work) during this new normal?

COVID-19 has not spared any industry. In the insurance industry, companies are trying to figure out what the new normal is. I started in insurance over 12 years ago and have observed that some functions have had prior experience working remotely due to the digital business transformation that has been taking place. However, the extent to which the COVID-19 pandemic brought remote working upon us was unprecedented, and many insurance companies were not prepared to be effective and operative immediately upon government-mandated lockdowns. Prior to the impending lockdown, our technology leaders met with our business leaders to determine the best options for keeping the company operating. The initial focus was on the basic technology needs (i.e. connection to internal network, access to various applications, etc.). Once we made the decision to work from home, we scheduled daily calls with our management and the rest of our teams for two reasons: (1) to understand how everyone is doing,  (2) to see what issues if any were being observed by our teams. At the slightest chance of an issue, we scheduled a SWAT team call including our Business Product Owners to assess the issue, quantify impact, develop a plan for resolution and create open lines of communication.

How I Have Been Working Arlind Mucaj

How I've Been Working: Arlind Mucaj, IT Intelligent Automation Product Manager at Hartford Steam Boiler (HSB) and Chief Experience Officer at InsurTech Hartford.

P&C carriers and brokers’ business continuity planning and operational capacity has been put to the test during the pandemic. While it may not be business as usual yet, how well would you say the insurance industry is doing in adapting and rising to the challenges of COVID-19?

There is no doubt that COVID-19 presents some challenges to the industry, just as we've seen with many other challenges in the past. What differentiates the insurance industry is the need for flexibility and to rapidly adapt to the circumstances as the needs of the consumers have changed. Agents still have access to systems and can still write new business. Consumers still have access to products. What has changed consumer and market preferences in the short term? Commercial P&C relies heavily on agents for distribution, and underwriting has slowed down because many of those offices are temporarily closed. Companies are scrambling to understand business interruption coverages and endorsements as part of the products they sell to determine what is covered and what is not covered. On the auto insurance side, the frequency of losses has decreased as people are not driving as much, which has opened capacity for claims adjudication. What people need to realize, and it goes for both insurance and other industries, is the fact that everything that existed pre-COVID will exist after-COVID. It will likely be amplified. The hope is that insurance companies are well underway with their digital business transformation initiatives to quickly adapt and rise to the challenge that COVID-19 presented.

The pandemic will inevitably force carriers and brokers to rethink their IT and operations priorities. What impact will this have on Insurtech, which has been a catalyst for digital transformation? What areas of innovation will continue, or gain momentum, and which Insurtech investments do you believe will help hasten a broker or carrier’s recovery post-Covid-19?

Interesting that you ask this question. One of my mentors, Stacey Brown, the Founder of InsurTech Hartford, and I were having this conversation awhile back when we kicked off the InsurTech Hartford Innovation Challenge in April of this year. The purpose of the innovation challenge is to draw out ground-breaking ideas from entrepreneurs, with ways to enable forward momentum beyond the end of the contest. In the insurance industry innovation occurs in three main areas: (1) Distribution, (2) Risk Management/Mitigation, and (3) Reduction in Operational Expense. With distribution insurtechs will find different ways to increase premiums. This is a supply and demand game affected by availability of capital and market conditions. The market generally drives innovation in distribution, and given our current business environment, this area would be the least impactful in the short term. In terms of risk management and mitigation innovations, various insurance companies are scrambling to understand their book of business and their exposure to business interruption coverages. There will be some opportunities for investments in this vertical, but this might have a longer tail when the economy starts recovering. With that in mind, cost-driven investments and reduction in operational expense will be the most meaningful in the short term. Automation of internal processes and various aspects of the insurance value chain will command the insurer’s interest in the Insurtech scene.

What do you think the insurance industry will look like in, say, two years after the coronavirus crisis is behind us? What lessons will we have learned from COVID-19 and the experience of living and working through this pandemic?

Just like many other crises that we have faced in the past (i.e. hurricanes, tornadoes, 9/11, recessions), the insurance industry will learn from and adjust to the challenges and opportunities that COVID-19 presented. At the very least, many insurance companies will pay a lot more attention to their business continuity plans and expand technical and operations efficiency efforts. Cybersecurity is one of those areas that comes to mind that is a big part of crisis management, because it tends to open additional vulnerabilities during a crisis. This will lead to insurance companies investing more internally on security programs that will fortify their access to core systems, and externally on ways to prevent threats to the customer base. I think the office environment will change, and there will be additional flexibility for employees to work from home, limiting the number of people at the office. Employees face many challenges due to disruption to income in the family, members getting sick, etc.

What gives you inspiration or hope in these anxious and unprecedented times?

Opportunities are made during times of uncertainty and economic downturns. Therefore, I hope that even though the endless opportunities to invest in start-ups might have closed, there will be still be plenty of those startups that will continue to disrupt the insurance industry. If we have learned one thing from this pandemic, it is that companies with an effective digital strategy have not missed a beat. I am optimistic that companies that employ good people and leverage technology as a differentiator will become even stronger and persevere in the marketplace.

What’s the first thing you’re looking forward to doing when you’re back in the office?

Reconnecting with colleagues and my team. It has been so long since we have met in person. I have employees all over US and look forward to meeting in person to resolve issues, or even go through a backlog grooming session. In addition, I cannot wait to restart my morning routine of chatting with my colleagues and business counterparts over coffee, lunch, or a quick visit to their office. 

Arlind Mucaj, HSB

Arlind Mucaj, MBA is IT Intelligent Automation Product Manager at Hartford Steam Boiler (HSB) and Chief Experience Officer at InsurTech Hartford. A dynamic professional with 12+ years of experience in various technology, operations, strategy, process improvement, and business relationship building roles, Arlind has continually leveraged his management skills in consulting and client services to create operating plans, develop strategies and drive execution. He is passionate about digital innovation, product development and entrepreneurship. Throughout his career, Arlind has been focused on getting to the root cause and solving business problems by leveraging systems thinking, agile, and PDCA tools. Arlind has his Bachelor’s degree from UCONN and Masters from University of Hartford with SAFe Product Management certification.



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