Digital Transformation:
Innovation in the Insurance Industry

Michael Krigsman: Everybody is a blockchain expert, right? Everybody is an expert in fintech and the financial system. But, today on Episode #279 of CxOTalk, we are speaking with somebody who genuinely is an expert and who is genuinely doing something about it.

I'm Michael Krigsman. I'm an industry analyst and the host of CxOTalk. Today, we are speaking with Alexander Bockelmann, who is the chief digital officer of UNIQA Insurance Group, which is a large insurance company, over 200 years old, based in Europe.

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Without further ado, Alexander Bockelmann, thank you for being here. This is your second time on CxOTalk.

Dr. Alexander Bockelmann: Michael, thank you for having me. It's always a pleasure being here. Thanks a lot for that very emotional start and kickoff into the talk. I think the audience is cheering me on. I don't know how I can ever meet that, you set the bar very high indeed.

Michael Krigsman: Well, you know, I need all of the cheering on that I can certainly get. Alexander, you are the chief digital officer at UNIQA Insurance, and so please tell us about UNIQA Insurance and tell us about yourself.

Dr. Alexander Bockelmann: All right. As you said, I have the pleasure of being the chief digital officer at UNIQA. UNIQA is a multi-country, multiline insurance company offering all kinds of insurance services from life, health, P&C, commercial, [and] small industrial. Our regional presence, we have our headquarters in Austria.

You said we are based in Europe. Yes, we are one of the largest groups, insurance groups, in Eastern Europe. Outside of Austria, we have about 16 other countries, most of them in Eastern Europe. That ranges from Poland in the north to Albania in the south to Russia in the East. You can easily think of UNIQA as being an Austrian company with very strong ties to the Eastern European markets.

Michael Krigsman: Okay. Now, Alexander, you are the chief digital officer. Previously, you were the group CIO. Please tell us about your role.

Dr. Alexander Bockelmann: Yeah, it changed a little bit. I joined UNIQA in 2013 to build up a new, centralized IT service company, so stabilizing the IT as a basis and also it was part of our UNIQA 2.0 strategy to get our ducks in a row for further innovation and further ideas that we had down the road. One of the building blocks was to actually build a new IT service company across our regional footprint. I did that with the team for about two and a half years.

The middle of 2016, UNIQA basically announced a major multiyear, 500-million-euro innovation program how we wanted to change our company going forward. As part of that, I had the pleasure to start building up a digital team. That responsibility grew over the time of 2017. We also decided or, kindly enough, the board decided to ask me then to take on the responsibility as CDO for the group starting in January of this year for both the Austrian and the international markets.

Michael Krigsman: As Chief Digital Officer, what are you responsible for? What is the scope of your work?

Dr. Alexander Bockelmann: The scope of the work is basically in three pillars. We build our digital team, not around technology. We build our digital team about the customer. At the core of our digital team and, actually, the founding starting members, the first three employees of our digital team, were the core of our customer experience team. That is essentially at the core of our endeavor in the digital space.

Around that, we built what we call a very innovative name. Team Digital, it's called, where we build basically three pillars. One is the customer experience. They decide what are the customer journeys. They do the customer research. They involve customers in product development.

Then we have a second team there, which is the digital solutions. They work on front-end solutions from chatbots, apps, portals, customer relationship management, everything. As a techy, you could say everything upside of the enterprise service bus for sales and customers.

The third pillar in that team is a new data team, a data scientist team that is helping us with predictive analytics, machine learning, and those topics. But, that's only one part. That's the traditional part of the CDO role creating, essentially, new customer journeys and experiences.

We added two additional pillars to that that we can maybe touch on later on, which is the topic of open innovation and the topic of our UNIQA Ventures team.

Michael Krigsman: It's also fascinating that you're a board member, which I suppose reflects the great importance of this digital work for an insurance company that's 200 years old.

Dr. Alexander Bockelmann: Yes. We have a very proud history, over 200 years, as you mentioned. I also mentioned before our innovation program. In 2016, our group CEO, Andreas Brandstetter, basically announced that his opinion and our opinion is that traditional insurance will not be obsolete but will reduce its competitiveness in the traditional model over the next five to ten years. When that was basically announced and decided, you need to take action what to do with that.

As part of that, multiple roles were created. One is basically the CDO role. In Austria, we also introduced an additional board membership for market management, customer and market management. That symbolizes two things: one is that we are shifting from a product to a service company and we have a strong focus on changing, essentially, or expanding our portfolio based on a very strong insurance knowledge basis more into customer service, holistic customer service development. Then also, to realize that there are multiple trends out there that change the insurance market, which is new technology, new customer expectations, and the shift from buying the best product to buying the best experience.

You could say that products like Apple and Tesla might not be the best phone or the best mobile car, but they create an ecosystem of services, which is amazing. That is a strong selling proposition. Something similar is happening in the insurance space where there is a move away from pure risk-based products to more predictive, preventive, and holistic service deliver.

Michael Krigsman: You'll have to elaborate and explain on this because, as a layman, I look at insurance, and I see it's all about risk. You're talking now a shift away from that towards customer experience. Please connect the dots for us how that works.

Dr. Alexander Bockelmann: If you think about health, for example, you could say a traditional insurance offering was to reimburse you, your medical expenses after something happened. The only touchpoint you then have is basically buying the insurance and then sending your medical bills to an insurer to be reimbursed.

More modern insurance companies, they're focusing also on the aspect of making sure that you stay healthy, so the preventive services. How can you basically do enough sports, do healthy activities that you never, or as minimal as possible, get into the position to require medical aid? Moving from making you financially whole aspect, to keeping you healthy aspect, is one thing.

In Austria, for example, we traditionally already have a very expensive service offering outside of pure risk-based health services. We integrated private hospitals. We integrated now a new service where we have an emergency room service outside of the regular working hours, so overnight and on the weekends. We have health trucks that go to companies to do preventive medical screening for the employees.

You could think about it. You could also add a concierges service to that, so when you maneuver in the health ecosystem of your respective country that UNIQA could be there to keep you healthy if something happens to manage that process very conveniently and efficiently for you so that you get all the medical help and attention on a first-class basis, as you deserve, and then get healthy as quickly as possible and stay healthy again. Over the whole course of that journey, UNIQA could provide you services instead of just being a traditional reimbursement company. That's the difference between customer journey and experience and traditional health insurance.

Michael Krigsman: You know it's interesting. We had on this show the chief marketing officer of Aetna. He was talking about giving discounts on, say, Apple Watches to engage their customers in their own health. It sounds like you're following a similar kind of approach or at least philosophy.

Dr. Alexander Bockelmann: It's basically to provide support and attention to a healthy lifestyle. Our vision and our mission is to provide a longer, better, and safer life for our ten million customers. Those are actually aspects of that, but you touch on an interesting topic. That's why I'm dodging the bullet there: what are you doing with that health tracking data?

I have a health tracker, so I'm gathering that data on myself. I share it also. But, do people feel comfortable sharing it with an insurance company is an interesting topic. Then also, the concept of insurance is that you have a portfolio of risk where you balance the risk between those that are higher risk and lower risk.

If you now gather individual data from people, being it on health, on mobility, on behavior patterns, you get into an ethical discussion how to use that in an insurance context. That’s why currently we are not using that in the health aspect like some other companies. However, in mobility, for example, we are, for years now, very active in the telematic space. But there, it's basically part of the service to be able to be there in an emergency or in a case of need with your telematic box in the car.

Michael Krigsman: It sounds like you are looking across your product line and your buyers to determine the various points at which you can collect data so that you can then have greater insight into what's going on with that insurance purchaser. Is that a correct assumption that I'm making?

Dr. Alexander Bockelmann: Yeah, it goes in the right direction. I would add to that that we are very conscious and we are very focused on making it transparent what kind of data is used where to our customers, following basically the philosophy there that it's the customer's data and they need to decide when and where they want to share it. That is, you need to have a convincing reason to use the data to get a customer value-adding service delivered.

In some cases, it's part of the service. If you want the service, there is a certain data sharing you need to do. But, we want to be very transparent what data is used where and when so that our customers always have an understanding of what's happening and there is no big brother effect where suddenly some insight in popping up and you don't know where that comes from.

Michael Krigsman: The ethics and the considerations around privacy and how to use that data, it sounds like, is baked deeply into your thinking around being a digital organization, digital company.

Dr. Alexander Bockelmann: Exactly. Nowadays, you have a lot of capabilities and opportunities to gather more data, being it from sensors, from IoT devices, [or] from smart cars, homes, whatever. You need to be very conscious which data you are using and for which purpose, and you need to be very transparent about that. That's a focus topic that we are very conscious of.

However, you are touching on another interesting point, which is, insurance companies in the past are a little bit like medieval castles. They let down the drawbridge when they sell you a policy, and then they pull it up again. You are in there, and your data is in there. There is no data sharing with anybody.

The essence of digital is connection and networking. If you want to play in a digital world, you need to open that medieval castle curtain wall, be more permeable, and share information and data across your partner network. Also, if you want to provide that holistic set of services that we've discussed, you need to build also a service ecosystem, which is sharing information and data. That is a new capability that you need to build, from my point of view, in our more and more digital world.

Michael Krigsman: How do you do that in a company or an industry which, as you said, traditionally is like a medieval castle where the data comes in, it never goes out, and it's not shared and, at the same time, in a company that has a rich, over 200-year history of operating a particular way? How do you drive that kind of change?

Dr. Alexander Bockelmann: I think, driving the change, it doesn't matter if you're an insurance company or if you have a 200-year-old history or a 100-year-old history. I think new business models and digital transformation is always approaching or leading to the same resistance in the organization. The resistance is often coming not because people are not believing in the change because, in the personal life, they are using some of the advanced services, potentially. But, people are creatures of habit. If you want them to change their habits and work differently, it costs energy.

Obviously, you need to provide a reason why they should invest that energy and get to a new mode of operation. There are different ways how you can approach that. One is, culture is only changing when you change experiences.

To get away from PowerPoint, rotate people into digital teams. Let them experience new ways of working, new methodologies, and then rotate them back into their organization. With that, build a community of change agents because transformation and change is also a team sport. You cannot do it alone, and you need to build a critical mass to get to the tipping point. That would be my comment to that.

Michael Krigsman: It sounds like you build a structure or a plan that was based on a number of different elements: the pillars you described, the change plan, the data privacy aspect. It sounds like you have had considered the ecosystem aspect, considered many, many different dimensions as you are trying to drive this really deep transformation inside the organization.

Dr. Alexander Bockelmann: It's basically a stepwise approach. The first step was to build with the not quick wins but with building the basics, meaning there are just some table stakes you need to have nowadays to compete in the market. You need to have a customer engagement platform. You need to be able to engage customers in a mobile-first way.

The next wave around the corner is the voice first topic. Maybe after that, we get into virtual assistance further down the road. You need to basically build some components and basic capabilities as building blocks, as legal blocks so that you can reuse them for new opportunities and business models. That is where we started. That's the digital team working on mobile, on chatbot, on portal, on what everybody else is doing. But, that is not the end of the story. That's just building the basics.

The second topic then in parallel to that is, a company has often not the capability and the intention to radically reinvent themselves. Companies are usually focused on evolutionary change, making the day-to-day more efficient, more effective. But, that's only one out of five dimensions that we think you need to tackle when you think about the digital.

The overarching one, we already touched, which is changing the culture. The second one is not a new one. Everybody is doing it since the invention of IT, which is using IT and automation to standardize your internal processes and procedures. That's the internal focus: first, culture; second, internal focus.

The third dimension is the external focus. You need to shift the perception away from internal efficiencies and towards customer experiences because your solutions will look differently if you basically switch into that role. If you are brave enough to encourage customers to participate in the product and solution development, that's a very interesting experience. Then that's the third column.

The fourth one is the data aspect where we were historically very good to understand the past. In some cases, we were able to predict the present, but we were not very good to think about the future. But, if you want to have preventive and predictive services, you basically need to do that. One of the learning is that you most likely need other data than the one you have used in the past. Data science, machine learning, AI: that falls into the fourth dimension.

The firth one is then the cherry on top. If you combine the first four, you actually might have the building blocks in place to build new endeavors, new opportunities, and business models.

Michael Krigsman: In fact, we have a question from Twitter. Arsalan Khan asks, "Regarding your movement towards AI, how is UNIQA using AI and also considering these issues of customer privacy and avoiding bias in the data as well?"

Dr. Alexander Bockelmann: That's a great question. I want to touch on the last aspect first because that is one I think that is actually a bigger scale challenge. If you follow down the AI path, you give more authority to a machine. The machine is only as good as it gets trained. It gets only well trained if you have the right data. But, if there is an unintended bias in the data, your AI machine will also have that unintended bias and your decisions will be biased.

I would never say that we are perfect in our data cleansing and data preparation, but we are very conscious of that danger. We are using the usual statistical and control group approaches to see if we have an unintended bias in our data. That was the last aspect.

What are we using AI for? We also went through a learning curve, and maybe sometimes it's good also to share what's not working. [Laughter] What we tried to do is teach AI picture recognition, which doesn't sound too difficult, but we wanted to do it for basically automating claims when you have glass breakage: a table, your cooking field, your Ceran cooking field or whatever. However, I learned a lot about that because it's not trivial to differentiate fake and true pictures. It's not trivial to differentiate different severities of damages. AI is a great tool but never underestimate the training efforts.

Also, we use it right now in automatic bill checkups in natural language processing capabilities for our chatbot and in related internal activities. The next thing we are thinking about is actually personalizing customer journeys based on AI algorithms. That will then be an interesting endeavor as well.

Michael Krigsman: Let's talk about these customer journeys and customer experience. It's certainly related to one of the core pillars you were describing earlier, the shift from being a product to a services company. Maybe talk about how you think about that customer experience and these customer journeys you were just describing, please.

Dr. Alexander Bockelmann: In the past, I think many companies, us included, we sometimes try to move an old business model on a new channel. We moved our existing processes and products on an online channel and, like many of those endeavors, that was not too successful. What you really need to do is you need to satisfy what the customers are expecting in the journey. They are expecting that it's relevant for them, that it's in the right context, that it's transparent, that it's easy, and that it's enjoyable. If you take that into consideration, your solution will look differently than if you take internal process efficiency as your primary target.

For example, in the past, we had some templates that were asking questions where you really need to be an insurance expert to answer them correctly. If the customer would have answered that question correctly, it would have been easier for us to route it to the right expert and give a very fast and responsive service.

However, for the customer, it's not relevant. They're in a moment of need. They want help. They want a reimbursement. They want claims or benefits. They want to have it easy. All the complexity, you need to mask out of that, and you need to think about the complete customer experience lifecycle.

We started just thinking about purchase. You just put something online and think, cool, e-business. There's a product out there; they will buy it. But, you need to think about all phases of the customer journey, getting an awareness of the product, informing them about it, then actually doing the service, then the purchase, then think about the after-sale experience, and so forth.

Customers want different information at different stages in their journey, to have that automated, that we understand in which context, from where is the customer coming to our webpage. Has he been there before? Is he already looking for a product or browsing? You need to provide different content, and then you will also have a different conversion and customer experience.

Michael Krigsman: Is this way of thinking about customers very different from how UNIQA and the insurance industry, in general, thought about customers in the past?

Dr. Alexander Bockelmann: I think, actually, that is true for insurance and that is true for many other industries. The consumer electronics and the services that emerge with the usual suspects like Netflix, Amazon, or others, they provided a level of service and immediate gratification that many others did not. That's why nowadays you are not only competing with your peer in the industry from a customer perspective, from an experience perspective. You are competing with the best in the mobile world out there. That is setting a totally different bar. To stay relevant, you need to engage that gain, play it with your team, be successful, and open yourself up for new approaches. That's why we have that second pillar in our digital CDO realm where we're basically saying we talked about the first one, which is the customer experience and the solutions. The second one is the one of open innovation.

I already said that it's usually quite hard for companies to reinvent themselves. We are now opening up ourselves to also engage different sources of innovation. We are partnering with the universities. We are partnering with startup accelerators. We are a founding member of Central and Eastern Europe's largest startup accelerator here in Vienna. We are working with nonprofit organizations, company building organizations from the universities just to support both our environment here in Austria and Vienna and the innovation ecosystem, but also to get experiences outside our own industry because that is what is needed if you want to move from a product to a service provider. You need to partner with other companies, and you need to find new solutions.

The third pillar in that one is then the whole topic of fintech and insurtech. Obviously, we are now talking about insurance. I think the last count by Venture Scanner in January was something in the order of magnitude of 1,470 VC funded insurance companies. If you think about the impact of that on the insurance industry, it was a radical catalyst for innovation and also competitive pressure.

I'm from Hamburg, Germany, a harbor town or city in northern Germany, originally. When you are swimming or sailing, you can read about it. You can watch YouTube videos. But, at the end of the day, you need to go out there and get wet. [Laughter] That's why we have the third pillar in the CDO realm, which is our UNIQA venture team, which is acting as a strategic and financial investor into the startup ecosystem so that we also learn there what is working, what is not working, [and] how are startups working. That's an interesting journey as well.

Michael Krigsman: I guess this explains all these pieces why you are also now a member of the board of directors of the company because, clearly, you are reaching throughout. The tentacles of what you're doing extend so far deeply through the company and its business model, its strategy, its relationship to customers, and so forth.

Dr. Alexander Bockelmann: We are seeing the digital part as an enabler for all the other functions. It's basically our approach for a matrix organization, you could even say. I do not have the biggest team. I do not have the biggest budget. I don't want both of that because, as I said before, it's a team sport. You can only be successful if you collaborate with the different functions.

We always want to have a business ownership in all our digital activity so that we also work cross-functionally within our organization. That is also a learning curve we are moving through, which is not easy because, traditionally, insurance companies are very siloed oriented. You hand over the ball from one silo to the other but, usually, you don't work very intentionally in cross-functional teams. That is what is needed.

The opportunity, obviously, to do that on a board level is a great opportunity because, A, you learn a lot, which I appreciate a lot. The other one is, you transition from a CIO role, which is often the nervous system of a company, but very much focused on the status quo, keeping the lights on in the daily business, and doing all the firefighting so that customer end services are being served. But, there is usually not a lot of freedom and opportunity to think about tomorrow or the day after. In the CDO role, I now have the privilege and the opportunity to work with my business peers to think about tomorrow, to think about our customers, what might they need tomorrow or the day after, and try out new solutions and come up with new ideas.

I would say that's also the difference between the two roles. There are many CIOs that are extremely successful, that are critical for their companies. They have evolved to be a business partner, but only part-time business partner because 80%, 90% of their work is still the day-to-day grind of keeping a complex company working.

In the CDO role, you have more degrees of freedom to work on what's next. However, you also are a change agent with a ticking timer. I don't mean that I'm going to explode. [Laughter] But, I mean that if CDOs are required for too long a time, then they somehow fail to get this new way of working into the DNA of the company.

Their role should evolve as well because there should not be such a change catalyst required after some time. Then they need to move on to the next opportunity being it--I don't know--a chief customer officer or something like that. But, the company should then work in an appropriate way for our digital world on a day-to-day basis anyway.

Michael Krigsman: That customer experience piece really is right directly at the heart of the digital transformation and digital relationship with the outside world.

Dr. Alexander Bockelmann: Well, it's in the heart of our business model. As an insurance company, we are, on a very personal level, safeguarding the life, health, and mobility, and other aspects, of our customers. Customer focus is our core value for the longest time. However, providing our services and supporting surrounding services in our time and moment right now requires to do it just differently than we did ten, maybe even five years ago.

Insurance is moving from the push relationship sale where an agent is advising you and providing you a risk product, more to an experience sale. You need to offer online and offline capabilities. It needs to be not an either/or because customers have different needs at different times. They want to be self-reliant, self-sufficient, online, on their own in one moment but, in another moment, they appreciate very much if they can call somebody to get help and service or meet with somebody.

Maybe they want to do it in a different way. Maybe they want to use the video call. Maybe they want to use a chat, maybe a personal meeting. But, if you are truly customer focused, you should not dictate how they want to engage you. They should pick and choose what they are most comfortable with. I think that's also a different approach of digital.

Michael Krigsman: What are some of the challenges associated with this journey that you are on?

Dr. Alexander Bockelmann: I think the number one challenge is that nobody knows where the North Star is. [Laughter] Nobody knows what model is actually successful in the next three to five years. Many people are trying a lot of things, but you just have to try it and learn from the different steps. That's challenge number one. It would be easy if you would know this is the equation to solve and, when I have solved it, all is good. But, that's not happening.

The second challenge is that the change, the innovation in the market and the technology space, is just picking up speed as we speak. Life will never be as easy as it is today. Change will never be as slow as it is today. It's just accelerating more and more. That is challenge number two, so the rules of the game are changing every day.

Challenge number three maybe is changing the culture in that lightspeed, that technology and markets are changing, because it just takes time. You cannot take thousands of employees and people and say, "Hooray! Next Monday, we all have red sofas, and we are working all differently." It doesn't work that way.

It takes time. You need to change the day-to-day experience. That is leading to a situation where technology is changing exponentially, but organizations are changing logarithmically. One is moving like this, and the other one is moving like that. The gap gets always bigger and, at some point, you need to decide what part of the change do you need to do outside of your company to have a new baseline to start from. That is a whole different, interesting discussion when to do that and how to do that.

Michael Krigsman: And, thus, the pillar of open innovation that you were describing earlier.

Dr. Alexander Bockelmann: Exactly. Exactly, and also the topic of UNIQA Ventures with regards to, is there a corporation partner out there that can help us close some of the gaps because they are coming from a different level, and we can piggyback on their success?

Michael Krigsman: Let me ask you. Then really the goal of UNIQA Ventures, what is that?

Dr. Alexander Bockelmann: UNIQA Ventures gives us two opportunities. One is to act as a strategic investor into interesting, younger companies that we want to strategically partner with to develop new services and business models. That's then closer to our core business and expanding our core business.

The second part is acting as a financial investor--you could say a small, regional VC approach--with the intention to observe and learn how trends are developing even though they might not directly be connected to the core business. It's more driven out of the aspects of financial return and innovation learnings. The vehicle for that is our UNIQA Ventures.

Michael Krigsman: It's the combination of both of those together, the financial return, but equally tied to the innovation dimension and helping see where the future is going and where UNIQA can go.

Dr. Alexander Bockelmann: Exactly. The key to that is then not to be greedy and to have a small minority stake because, if your stake is too high, you are already a strategic investor and your culture is influencing the startup and the young company. That is exactly what you don't want because they're on a different trajectory. You want to observe, with a more hands-off approach, how that is going and not influence them to become the next incumbent.

Michael Krigsman: Now, something that we have not talked about is blockchain. I mentioned at the start of this program that, if you looked on LinkedIn, it seems half the people on LinkedIn right now have announced that they are blockchain experts. But, you're actually doing stuff with blockchain, so how do you view blockchain?

Dr. Alexander Bockelmann: I think data scientists and blockchain experts [laughter], if you put that on your CV, your salary goes up 25% or something like that.

Michael Krigsman: Exactly. That's right.

Dr. Alexander Bockelmann: I was joking at some time that if we want to have a spike in our stock market evaluation, we also follow the trend to rename us into something like that. [Laughter] All joking apart, I think blockchain has the potential to be a very game-changing technology; not as much as artificial intelligence. I would add that that is even bigger.

But, blockchain has some very cool features, and you could argue, like some of our peers are saying, Richie Etwaru and others, that if the society accepts at some point that blockchain is something else than cryptocurrency and is saying that blockchain is offering trust, transparency, and the incorruptible truth, so to speak, then business models using blockchain could just have a competitive advantage due to the fact that they're using blockchain. An existing business model is in danger of being replaced by its clone just by virtue of using a blockchain. That would be an extreme scenario.

On the other hand, blockchain is also a mega-hype, and it's a great solution that's looking for problems to solve. Now everybody is throwing problems at it and is looking at what sticks. I think there are a few great examples out there that work well, one of which we have picked as the sovereign blockchain in the topic of e-identity and know your customer processes and procedures.

We are right now piloting with a small consortium of Austrian companies, a pilot where we are checking if we could use a sovereign-based blockchain e-identity to authenticate certain customer characteristics against each other. What I mean by that is, imagine you get a blockchain eID. Now you're going to a bank, and you open an account. The bank can then flag on your blockchain ID that you have a monthly income of X, or you exceed a certain threshold. With that, you could go somewhere else and get a loan with a different bank or so forth.

An insurance company could certify that you have a certain cover. The postal office can verify your address. You could go on with health service providers. The beauty of that is that, for the customer, he gets complete transparency about all these aspects of his person and he can, via the blockchain, in a very transparent fashion, give temporary rights to use that information or also only provide a minimum information.

For example, if you need to prove that you are 21 or older, it could just say yes, you're 21 and older. It doesn't need to say that you are--I don't know--43. That is the KYC in the e-identity space. That is the one where we are right now experimenting with blockchain.

Michael Krigsman: You see blockchain as potentially really viable to be part of your business.

Dr. Alexander Bockelmann: The short answer is yes. I think, for some of those processes and procedures like know your customer, I would definitely say yes. I think, for reinsurance or other experiments that you see out there that might also be opportunities, it sounds very easy or endearing if you think about the idea of smart contracts. "Insurance is so easy. Why can you not do it in a smart contract?" I wish it would be that easy, and maybe we find services and offerings that are just a binary yes/no and you could do on a blockchain.

I think examples will occur, but getting something like flight cancelation insurance and so forth is not the same as you'd get a holistic medical coverage or an end-to-end mobility service. That is a little bit more complex than a simple yes/no question. Building that on blockchain, people are still figuring out how to do that.

Michael Krigsman: Okay. This has been a very fast 45 minutes. We're almost out of time, but we have an interesting question from Zachary Jeans. A number of people have retweeted his question, so I think people care about this one, which is, "How do you handle resistance to change as you bring digital transformation to a company?

Dr. Alexander Bockelmann: There is maybe no silver bullet. I think what is working is engagement. Rotate people into digital endeavors to learn about the methodologies. Explain the why and the how, "Why are you changing something? How are you changing it?" because, as I said before, people are creatures of habit, so you need to explain why they need to change. Then, people usually are afraid of the unknown, so you need to explain how you are doing it and how it will impact them. Those are two of the major levers that I would suggest to follow.

The next one is, be transparent about what's working and what's not working. Celebrate also your mistakes because it might be that, otherwise, you lose the connection to your organization if you are just a satellite being out there and nobody knows what you are doing. We try to build cross-functional teams, get people on board, get them as change agents to learn the new capabilities, bring them into their respective organizations, and that is one way of engaging and mitigating those resistances.

Michael Krigsman: Okay. Finally, we're out of time, but we have a lot of CIOs that watch this show. As somebody who was a group CIO, now is Chief Digital Officer, member of the board of directors, what advice do you have for a CIO who finds herself or himself in the situation you described earlier, which is, spending their time having to maintain operations as opposed to be a value-added innovation partner to the business? What advice do you have for CIOs?

Dr. Alexander Bockelmann: I think legacy mountain [laughter] is one of those things that every CIO dreads about and is not very happy about. If you can manage to master the complexity by decoupling your backend from the frontend, you get some capabilities to get showcases in the frontend, build momentum, and show that IT can deliver things in a different way and fashion.

Then I always say it's about the five Cs.

• You need to be curious. You need to step out of your role and see IT as an integral part of the business nowadays. The boundaries are just blurring.
• The second C is you need to be caring. You need to advocate the best for your customers and your employees. Both are, basically, they want the same experience they get in their personal life from other service providers, and you can bring a different perspective to the table.
• The next one is to build change, meaning, take the ownership of a change agenda. A lot of the change nowadays is IT-enabled, at least. Team up with your business peers and engage them on their ideas, challenges, and opportunities.
• Be competent because if you are at the table and you speak with your peers, you need to build trust. Don't fall into the trap of using just the buzzwords that are out there to do the smoke and mirror thing. But, if you actually have an area of expertise, leverage that.
• Then engage the community. Most likely your company has limited capability of innovation, so leverage what's out there. Engage other companies. Engage your peers. Build networks and bring those ideas back to the table in your company.

I think those would be good approaches to bring change into your endeavor.

Michael Krigsman: Okay. Great advice for CIOs. Well, we are out of time. What a very, very fast 45 minutes this has been today. We have been speaking with Alexander Bockelmann, who is the chief digital officer of UNIQA Insurance Group, which is based in Vienna. Alexander, thank you so much for coming back and visiting with us today on CxOTalk.

Dr. Alexander Bockelmann: Michael, it was a pleasure as always. Thanks for having me. It's an honor, and I enjoyed it very much. Thank you.

Michael Krigsman: Well, I'm looking forward to the next time as well. Thank you, everybody, for watching Episode #279 of CxOTalk. Next week we are speaking with the head of the innovation lab at Neiman Marcus, the huge retail department store, together with Brian Solis, who is one of the top digital transformation analysts out there. Come back and join us next week.

Thank you so much, everybody. Oh, and don't forget to subscribe on YouTube and tell a friend right now. Thanks so much. Take care, everybody. Have a nice day. Bye-bye.