Chubb panel counsel members will want to take note of on-going initiatives to drive transformational change through technology. “Chubb is transforming itself to a company built to thrive in the digital age,” according to a Chubb news release.
In January, the Zurich-based insurance giant announced the appointment of a “Digital Transformation Officer” at the EVP level for its $41 billion global business. With 31,000 insurance professionals in 54 countries, the company is “changing how insurance operates enterprise-wide.” This transformational executive will work closely with the Chief Digital Business Officer, who also serves as the Chief Risk Officer.
The insurance industry is changing rapidly, as Chubb notes in its recently released 2021 10-K. Competitive success depends not only on financial performance, but also the adoption of increased digital capabilities across insurance processes, products, and services.
Recent competitive developments in the insurance industry include the growth of new digital-based systems to acquire new accounts, provide customer service, and facilitate claims.
The National Center for the Middle Market collaborated with Chubb and The Ohio State University Fisher College of Business in 2020 to publish a report titled, “The Case for Digital Transformation: Strategic Use of Digital Technology Paves the Way to Growth and Opportunity in the Middle Market.”
Digital transformation adds value to a business in four ways, according to the report:
- Digitization improves the efficiency, speed, and quality of operations.
- Customers and employees expect (and often prefer) digital products and experiences.
- Companies with a flexible digital platform can scale and expand operations faster and more cost effectively by replacing expensive brick-and-mortar assets with lower cost digital assets.
- Entirely new business models can be developed through digital transformation. These new business models can be in addition to and/or in place of the legacy way of conducting business.
Law firms and other businesses that want to pursue a digital transformation can consider the framework listed below.
- Our Enterprise: Business Model, Strategy, Value Drivers
- What We Sell: Products, Services, Innovation
- How We Produce It: Operations, Supply Chain, Distribution
- How We Sell It: Sales, Customer Experience, Channels, Marketing
- Our IT Backbone: Infrastructure, Security
Chubb believes that every company (which includes law firms) should migrate to a continually increasing digital environment. This focus on continuous improvement can lead to higher levels of financial performance and operational efficiency.
Digital Transformation Brings Cyber Risks
A digital operating system brings with it new cyber risks, which can be both internal and external.
Chubb notes in their 10-K that they are subject to many U.S. federal and state laws governing the protection of personal and confidential information on clients and employees. One leading example is the New York Department of Financial Services’ Cybersecurity Regulation (the NYDFS Cybersecurity Regulation) which sets minimum cybersecurity standards for all institutions, including insurance entities, authorized by the NYDFS to operate in New York.
The NYDFS requires that cybersecurity systems include the following:
- Certification requirements
- Cyber breach preparedness and response plans
- Cyber security reporting obligations
- Governance controls
- Program record keeping
- Risk-based minimum data security standards for technology systems
- Vendor oversight
The National Association of Insurance Commissioners (NAIC) also provides national guidance on cyber security issues through its “Insurance Data Security Model Law,” which requires licensed insurance entities to comply with detailed information security requirements.
Implications for Chubb Panel Counsel Members
Law firms that are on or aspire to be on the Chubb panel of defense counsel should be aware of Chubb’s key performance goals, both within the insurance carrier and its expectations for vendors.
If your law firm is making progress in a digital transformation, it is important to tell your story to current and prospective clients like Chubb. Marketing communications of this nature can be achieved through a client newsletter, firm resume, website articles, and LinkedIn social media posts.
Explain how you are resolving claims more quickly within your law firm through the possible use of:
- Data analytics
- Metrics / measurements / reporting
- Better communications with the carrier / claims adjuster / insured
- Creation of an internal knowledge base
- Remote work capabilities
- Video teleconferencing
As mentioned above, a digital environment is not without risks. The threat of a cyber or ransomware attack at a law firm is an ever-present danger. As part of your marketing communications program, you can take the following steps:
- Tell the story of how you are protecting data
- Identify specific industry standards and best practices that you meet
- Mention the use of cyber insurance, if in place
- Provide and explain employee training on cyber security topics
Related Articles of Interest for Chubb Panel Counsel
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This article is provided for educational purposes only. It is not to be interpreted as legal advice or an opinion in regard to any topic discussed. The article should not be used as a substitute for legal advice from a licensed attorney in your state. Every situation is different and circumstances vary widely depending on the governing state law, policy provisions, and related considerations.