Interview: LV Insurance Group's Gavin Drescher - 'We needed to do something very different and quite radical'

Insurance firm's delivery director talks us through whys and hows of LV's ongoing technology-driven transformation

In 2007 the ailing mutual insurance group Liverpool Victoria underwent a major restructuring, including a £2 m rebrand which saw the name Liverpool Victoria relegated to subtitle status, while the visual customer-facing image became LV=, the ‘V' in the shape of a green heart. The message was clear. No longer was this a fusty firm filled with spreadsheet wielding actuaries, but instead it was a caring friendly society that exists to "help you look after what you love".

The restructuring and rebranding was a success. The mutual's financial fortunes were turned around, and LV won a series of awards, including most trusted insurer in 2017.

Becoming a more a customer-facing company requires more employees to become ‘brand ambassadors' including those responsible for technology. Certainly, Gavin Drescher, delivery director for general insurance, talks a lot about love, enjoyment and togetherness in a way that might seem slightly incongruous. However, that would be a sign of backward thinking, he says.

The sector is being disrupted we need to be ahead of that disruption

"Please don't think this is just a cobweb insurance traditional industry. The sector is being disrupted we need to be ahead of that disruption, and we're the enjoying the challenge that disruption provides."

As the world of insurance has moved from high street shops to aggregators like GoCompare and Compare The Market, so LV has had to transform itself once again.

The last two-and-a-half years have seen tens of millions of pounds invested in the new skills and digital platforms that LV hopes will keep it ahead of the competition. More about that in a moment, but first a bit about Drescher's background.

After completing a geophysics degree in at Liverpool University ("three years of blowing things up in a desert"), he became a technology analyst at NatWest bank ("a bit more sensible") before moving to a directorship at PA Consulting Group. His first role in insurance was a period at Direct Line, before diversifying into retail as an interim director at Marks & Spencer. Drescher then returned to insurance, joining LV in 2015 as IT delivery director, becoming delivery director for general insurance (GI) in the restructured firm in December.

"I'm really delighted with the people I've had the privilege to work with, and LV is no exception. We've got a fantastic group of people and a very ambitious agenda, so it's fun to be a part of," he said.

The goals of the transformation included consolidating existing insurance products and introducing new ones, making internal systems easier to use and navigate for customer-facing staff, providing new management information (MI) systems, improving data quality, increasing flexibility and agility and building a platform for future developments which may even include non-insurance products. It's vital to keep a weather eye on the future, Drescher said.

"We do challenge ourselves about not being the fittest dinosaur. It's really important that we look at placing appropriate bets and potentially in new markets."

Customer focus

During his stint in retail, perhaps the leading sector in the digital charge, the importance of building a good relationship with the customer through technology hit home, he said.

"We definitely acknowledge the fact that we want to be like retailers. We would like to have a much stronger relationship with our customers, not the traditional boring conversation about insurance. We want to say we'll look after things you love and we are here for life's inconveniences, so we build up a position of Britain's most loved insurer."

Self-service is an area of growing importance for the firm, enabling customers to update their policies online, for example adding a named driver to a motor insurance policy notification of a change of address. Despite being a UK-only insurer, LV needs to provide a reliable 24×7 service.

"We check our site stats every day, and there's always someone on the web in the middle of the night. You might be surprised but people are looking to buy something all the time, every day of the year," he said.

"Things have moved on massively with the advent of aggregators some years ago now but even more so now. The channels are digital channels, so aggregators and direct, so we've got to be 24x7."

LV's Bourmouth offices

Out with the old

The firm has already achieved many of its strategic milestones, delivering the programme at breakneck speed, something made possible by rigorous planning and bold decision making. There has been a complete overhaul of the technology stack, a new data centre and the introduction of new ways of working.

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Interview: LV Insurance Group's Gavin Drescher - 'We needed to do something very different and quite radical'

Insurance firm's delivery director talks us through whys and hows of LV's ongoing technology-driven transformation

The migration is ongoing, a lift-and-shift replacement being practically infeasible, and in some areas the legacy infrastructure and applications are still running, with customers being gradually migrated over to the new platform as they renew their policies.

Like many organisations of its size (LV employs 6,000 people and serves more than 5.5 million customers) and vintage, for many years it ran its operations on mainframes. Rather than tinkering around the edges, the company decided to do away with this infrastructure altogether in favour of a mix of managed services, in-house platforms and cloud.

We decided we needed to do something very different and quite radical

"It was hard to get stuff done [using the mainframe-based systems], particularly new things it took a long time. We decided we needed to do something very different and quite radical," Drescher explained.

One part of this approach was to make judicious use of partners, but it was decided not to employ the services of a systems integrator. This, the company felt, would have taken the heart out of the endeavour.

"We didn't want to be two steps away from the action, we wanted all the leadership team close to the action throughout, and that sent a message of commitment to the teams working on it."

While the companies guards its rating algorithms ("the secret sauce") carefully in-house, anything that is judged to be ‘commodity' tends to be moved out to suppliers. LV favours a best-of-breed approach, selecting sector specialists including Guidewire for customer and policy records, SSP which provides database services, data enrichment, validation and quote orchestration services and Commensis who look after document provision and fulfilment services. Hexaware was also employed to do a lot of the testing of the new code during the change.

Drescher said one of the lessons his team learned early on not to tinker with building add-ons in-house when the specialist providers do that for a living: "Why do we think we could do better than the product owners themselves?"

As well as judicious supplier management, much of the success of the project has been down to the quality of the teamwork Drescher believes.

"One of the golden rules around the way we approached it was that there wasn't 'IT' and ‘the business', there was a team. We smashed down the silos, and that really helped. The commitment was extraordinary. There were 300 people on the programme, and we had full steering groups every two weeks, and the leadership team met every single day for over 18 months."

Because of this commitment to project governance any problems - and because of the complexity of the programme there were many - were quickly nipped in the bud.

The firm also introduced new agile ways of working, although given the continued presence of some of the legacy systems a gradualist approach has been taken. However, by the middle of next year, all of the customer data will have been migrated to the new Guidewire platform, and LV will be able to switch off its mainframes for good.

The benefits of the new platform are already apparent, said Drescher.

"It's the biggest transmission LV Financial Services has ever done, and in the middle of that was the decision to create the GI business, and also - non-trivially - a new MI and a new data centre to go with it, so it was a colossal transformation."

As well as new products, cleaner data and a new platform for growth, life is much better for the call centre staff, he said, meaning their capabilities can be expanded.

'You used to have to be an air traffic controller' - Drescher

"You used to have to be an air traffic controller to run the old-style works, but now it's a much cleaner journey, so the conversations with the customers away stronger. We can talk about payment terms and renewal terms which we weren't able to do previously."

The algorithmic future

Looking to the future, Drescher mentioned an increased focus on machine learning. Much of the data that was siting on the firm's mainframes has been uploaded to Azure and together with external data sources this makes a valuable training set.

"Machine learning is really exciting. There are so many propositions it's just about which would you pick first, but we have opportunities to test and learn on that, and that's how we'll approach it."

LV is already experimenting with machine learning around first notification of loss (FNOL), fraud and image analysis with customers able to upload images of damaged vehicles for example. Example applications should be in production within the next 18 months he said.