ACE Group’s Lupica on Innovation

This article is part of our insurance innovators interview series.

John Lupica, Vice Chairman, ACE Group; Chairman, Insurance–North America

John Lupica, Vice Chairman, ACE Group, Chairman, Insurance-North America

Q1: In your view, what has been the greatest innovation in the P/C insurance industry in recent years? Explain.

Lupica (ACE): Predictive analytics is proving to be a groundbreaking innovation. It has so many applications within insurance—in underwriting, claims, capital management. And the benefits to policyholders are tangible.

For example, over the two years that ACE applied a predictive analytics methodology to workers compensation claims, we saw claims savings in the millions of dollars. We just recently brought ACE 4D, our next-generation predictive modeling and data analytics solution, to market. Today, it can help claim adjusters identify opportunities to intervene and improve claim outcomes through our online insurance program management platform, ACE Worldview. However, going forward, I’m confident it will improve our underwriting and actuarial acumen and raise our game as an insurer.

Q2: Describe the greatest innovation at your company during your tenure. (It could be a product, process or service.) How did it come about? (Feel free to describe more than one.)

Lupica (ACE): Clients and brokers continually ask us to make their lives easier, and ACE Worldview, which is now celebrating its fifth anniversary, came about from this. The online insurance program management platform (available to large commercial insureds with complex property/casualty insurance programs) allows users to track the issuance of a local multinational policy, electronically select coverage selection forms, view billing online and access claims predictive analytics.

Editor’s Note: In November 2015, ACE Limited announced that when ACE’s acquisition of Chubb is completed in first-quarter 2016, Lupica will serve as President, North America Major Accounts & Specialty Insurance of the new Chubb Group. He will also serve as Vice Chairman of the new Chubb Group, ACE announced in July.

Moreover, in 2014, our clients challenged us to keep our company flat and nimble, and we responded with our Worldview Communities. These communities are a virtual underwriting and servicing portal and will bring together all the experts at ACE, with the broker and client, to collaborate and provide superior service.

ACE Worldview has changed the way risk managers and their teams approach their complex, global insurance programs. Even five years after its launch, no other carrier offers anything like Worldview.

Q3: In your view, what innovation or innovator outside the insurance industry has had or is having the greatest impact on the P/C insurance industry?

Lupica (ACE): Over the past two decades, the innovations we’ve witnessed in the transportation industry have had the greatest impact on the P/C insurance industry: GPS, sensor technology, driverless cars.

“We don’t shy away from asking questions and soliciting feedback, which is where all of our innovations begin. It’s the frank conversations with the broker and customer that prompt internal discussion and self-reflection.”

John Lupica, ACE Group

But I don’t want to discount big data. It’s early days, but it’s already proving to be a game-changer. And, just a personal observation, new technology business models are intriguing, and the disruptions they’re creating within their own industry and ours, though unsettling, are exciting. Those businesses are challenging us as an industry.

Q4: Describe one or more ways in which your company encourages innovation. (Feel free to describe any elements of the culture or process.)

Lupica (ACE): ACE is innovative because we don’t shy away from asking questions and soliciting feedback, which is where all of our innovations begin. It’s the frank conversations with the broker and customer that prompt internal discussion and self-reflection. The reason we’ve experienced such a high success rate with our innovations is because we have a culture at ACE that encourages us to ask questions, which, in turn, help make things work better for our brokers and clients.

Q5: What is the biggest obstacle to innovation within the insurance industry? Explain. What is your company doing (or what can the industry do) to overcome this obstacle?

Lupica (ACE): We are facing a climate of increasing regulation both domestically and globally. And this climate has the potential to stifle innovation while adding unnecessary complexity and costs for insurers, with little benefit for policyholders.

ACE is engaged at the state, federal and international levels on the subject of a global insurance capital standard. We support the U.S. insurance industry and U.S. state regulators in urging federal regulators, including the Treasury and the Federal Reserve, to resist changes to capital standards that would unnecessarily raise costs and hurt U.S. insurance buyers. (See related article, “International Capital Standards: A Risk Management Mirage,” by ACE Limited CRO Sean Ringsted and Patricia Henry, ACE’s executive vice president of global government affairs.)

Q6: Do you believe the next innovation to impact the P/C insurance industry will come from inside the industry or from an external innovator? Why?

Lupica (ACE): Actually, both. Inside the industry because looking at the new generation of insurance professionals today, they are probably the most technology savvy of any previous generation. And this openness and comfort with technology will prompt them to innovate in ways we have yet to imagine.

Outside the industry because that’s where the fresh perspective is, which is essential if we want to improve our processes and risk-taking.

Either way, our industry will attract new interested minds, from all backgrounds, to challenge existing assumptions and make us better at mitigating risk.

Q7: Describe your role in leading innovation at your company.

Lupica (ACE): Innovations and innovators need sponsors because they present change that not everyone is comfortable with. I make sure the most promising developments have a chance to progress and that they have support and buy-in at all levels.

I also demand bottom-line results. Ultimately, innovation has to make business sense at ACE and contribute to our success.

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John Lupica, Vice Chairman, ACE Group; Chairman, Insurance–North America