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Barbara Karuth-Zelle, COO and board member of Allianz, is captivated with driving expertise and AI innovation for a sustainable future. She’s spent greater than 20 years on the insurer—together with as CEO of Allianz Know-how, its inner expertise service supplier—and is understood for her capacity to assemble numerous groups that get issues accomplished shortly. Karuth-Zelle spoke with McKinsey senior associate Jörg Mußhoff about generative AI (gen AI), digital transformations, sustainability, and ladies within the insurance coverage business. An edited transcript of their dialog follows.
McKinsey: What rising applied sciences do you see as having the best potential to disrupt insurance coverage operations, and the way ought to the business put together for these modifications?
Barbara Karuth-Zelle: Insurance coverage is a data-driven enterprise, so it would profit significantly from gen AI, which may simplify our work. We’ve been working with different types of AI for over 20 years, and the newest iteration with gen AI has opened up a brand new world of prospects.
I see three fundamental methods for the business to make use of gen AI. First, each answer must be human-centric. In my opinion, that is the essence of our technique. That’s why we embrace the step the European Union has taken with the AI Act, which is geared toward regulating the expertise whereas guaranteeing sure moral requirements and respecting basic rights. The thought is to handle knowledge privateness, forestall bias and discrimination, and convey about transparency for everybody the place AI is concerned.
Second, our staff should be a part of the event and the story. Which means reskilling and retraining. We’re offering a primary inner ChatGPT occasion, encouraging colleagues to experiment on native and a few particular world use instances, and providing intensive AI coaching to show them new expertise, reminiscent of constructing immediate libraries. Our inner ChatGPT occasion is embedded in a accountable framework. Which means our knowledge stays confidential and isn’t shared with third events, and we’re guaranteeing the output is correct and never discriminatory.
Lastly, we have to scale key use instances, reminiscent of within the areas of claims protection, disaster prediction, hyperpersonalization in advertising and buyer relationship administration, underwriting protection checks, coaching, doc administration—in each a part of the enterprise—and, in fact, software program improvement.
McKinsey: What core success elements do you see in digital and AI transformations, significantly within the context of enormous insurance coverage corporations?
Barbara Karuth-Zelle: Digital and AI transformations aren’t primarily concerning the expertise however somewhat the mindset, the folks, and the group—together with the suitable crew to drive the transformation. We have to continuously adapt and readapt as applied sciences and practices change.
For me, the muse for a profitable transformation is the mindset of sharing, curiosity, creativity, and a can-do perspective. This goes together with an agile means of working and a various, skilled, skilled, and inclusive workforce that will get essentially the most out of individuals’s abilities.
Organizationally, it’s necessary to try for fixed simplification all through the corporate—in all merchandise, processes, and applied sciences—to ease clients’ lives by providing easy and intuitive options all over the place and anytime. This enables an organization to scale innovation shortly and undertake new applied sciences. Similar to with the instance of AI, the whole lot must have the human within the center.
McKinsey: You will have led a number of transformation tasks. Which ones challenged or excited you essentially the most? What did you be taught?
Barbara Karuth-Zelle: Allianz, based in 1890, has a wealthy historical past of tech innovation. It was constructed by means of many acquisitions, all coming with their very own histories—and tech platforms. To guide a metamorphosis, you want folks with resilience and creativity. Allianz has achieved an enormous quantity of simplification and harmonization through the years, and now we’ve got arrived at a paradigm of steady transformation.
From 2016 to 2020, I used to be the CEO of our inner expertise supplier, Allianz Know-how. One very onerous factor to crack was the collective transformation of Allianz’s whole tech infrastructure—the whole lot from knowledge networks and knowledge facilities to identification administration at our workplaces. Was doing it unexpectedly the suitable means? Onerous to say. However that call led to slicing the Gordian knot of selecting the place to begin first and what dependencies to contemplate.
Contemplating the unbelievable range of expertise landscapes we began with, it was the suitable method to first slender down the gathering to a couple shared platforms and evolve these constantly as a substitute of investing in a number of platforms with related performance, even when that first step is politically onerous and takes longer than you need. That transfer made us quicker in migrating towards new expertise and in scaling innovation shortly. For example, we consolidated about 100 completely different intranets right into a single frequent platform over roughly seven years, however after we made the choice emigrate to a brand new platform, that iteration took solely a couple of 12 months.
We additionally went by means of steady transformation at Allianz Know-how throughout my 5 years there, whilst we carried out these enormous expertise transformation tasks. The tech transformation was essentially the most thrilling journey in my profession, as I discovered a lot concerning the significance of clear scope, clear KPIs, the suitable folks, a change mindset, taking over tasks that aren’t too huge and aren’t too small, and delivering as shortly as attainable.
McKinsey: How can a COO contribute to the sustainability agenda of an insurance coverage firm in tech and operations?
Barbara Karuth-Zelle: For me, it’s by means of discovering efficiencies within the group and utilizing my private sphere of affect to advertise sustainability. Effectivity is now not nearly money and time however is now additionally about minimizing all our useful resource wants—for instance, digitizing processes as a substitute of getting them on paper.
Implementing requirements, reminiscent of paper discount, vitality use, and vitality sourcing, is a key approach to obtain this. We insist that our knowledge facilities use renewable vitality sources and that our web sites use low-energy graphics and movies, and I’m even wanting critically at large-language-model-based AI, which makes use of an enormous quantity of vitality in its coaching. The requirements themselves stem from transition targets which are a part of our group technique. We now have stated very clearly how we plan to scale back greenhouse gasoline emissions by means of sustainable automobiles or pushing for videoconferencing as a substitute of journey. With targets, we maintain ourselves accountable.
Lastly, there’s merely the non-public affect a senior govt can have. I’m extraordinarily captivated with defending biodiversity within the oceans as a result of they’re our world “lungs.” To cite an ocean activist, “If the oceans die, we die.” I take advantage of my visibility to advocate publicly and to assist arrange partnerships between Allianz and entities reminiscent of Sea Shepherd to fight plastic waste within the Mediterranean, Plastic Fischer to prevent plastic in Indian rivers from coming into the ocean, and Enaleia to turn old fishing nets into helpful objects.
McKinsey: Allianz is without doubt one of the few massive European insurers with 4 ladies on its administration board, attaining close to parity amongst women and men on the nine-member panel. What steps has Allianz taken to attain this, and what can different insurers be taught from its method?
Barbara Karuth-Zelle: I’m very proud to work for Allianz, a very numerous firm in lots of elements. There may be house for everybody as a result of we actively determined to handle this and guarantee we get extra range in management roles.
Going additional down the ladder, to present ladies a extra stage taking part in discipline for wherever they need to go of their careers, we’re asking extra questions on what they want, permitting extra versatile work fashions, and rethinking our expertise fashions and management codecs. I sponsor a collection of inner webinars that includes ladies in senior tech roles as a result of this house is usually seen as male dominated.
My recommendation, relevant to everyone: in case you want one thing, please ask for it. This opens discussions and may open doorways. Communicate up if you wish to make a change.
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