“The word transformation can be misused sometimes,” says Barry O’Dwyer, CEO of Royal London, discussing how any change within an organisation can often be branded transformation.

Royal London is the largest mutual life, pensions and investment company in the UK, looking after 8.6 million life and pension policies, with over £150 billion-worth of assets under management, and O’Dwyer is overseeing a major digital-first transformation of the business that undoubtedly warrants the description. He says the key to delivering such wholesale change is establishing a clear plan that can be communicated to the whole organisation.

If we get 4,500 people rowing in the same direction it will be massively powerful,” he says. “The trick is to provide the direction and keep it simple so you don't need a PhD to figure out what the strategy is.”

Overcoming digital inertia

O’Dwyer concedes digital transformation in the insurance industry has been slow, restrained by the cost and complexity of migrating from decades-old legacy systems and heavily manual processes. But he says the sector must shake off that inertia.

“Customers get conditioned,” he says. “Not by other financial services firms, but the companies they interact with daily. They are becoming intolerant of being unable to do stuff digitally.”

“So we are working on a technology transformation to become digital-first and provide frictionless experiences where our customers share their data with us and we use it to improve our offering,” he says.

As a mutual, Royal London is customer owned and O’Dwyer believes customers are more inclined to support such data-driven innovations than if shareholders were the ultimate beneficiaries. 

Its customer base has also protected Royal London while it’s been getting its digital house in order.

“Some of the start-ups in our sector stole a march on incumbents because they had better technology. But the challenge they ran into was acquiring customers,” he says. “That's not been our problem. Ours was that we haven't had the best technology, but we're putting that right.”

However, there is no room for complacency. O’Dwyer says the criticality of digital transformation and data means CEOs must take greater responsibility.

“I'm probably closer to our transformation than I would have been in the past. I still rely on a large team but it's so important I give it a lot of attention. The CEO needs to understand the data strategy and how we will use data to improve the customer offer. It is now so central to where we're taking the company, I have to be close to it.”

O’Dwyer is also very aware that delivering a transformation project isn’t the end of the story.

“We will be continuing to invest in IT infrastructure upgrades for many, many years. But the way technology has moved on, modern architecture and the use of cloud means we're building something capable of frequent and rapid change.”

Building capabilities for long term success

Royal London is committed to developing in-house capability to support its transformation, and O’Dwyer believes its clearly-articulated strategy has helped with recruitment.

“There is competition for talent, particularly in areas like data,” he says. “But we have been successful because we made it clear our investment in data was long-term and we were going to do it right. We weren't looking for a quick fix, we were looking for people to join us and build something that was going to endure.” 

However, O’Dwyer says the pace of change has also demanded strategic acquisitions, such as its purchase of fintech Wealth Wizards, to add new capability, alongside acquisitions for scale, such as Aegon UK's individual protection book which added 400,000 life and critical illness customers.

A data-driven approach to sustainability

As well as powering a more customer-centric offering, data is transforming how Royal London reports on its climate transition plan, including updating on the impact it is having in influencing the companies in which it invests to take action to address the climate crisis.

“The customer has to believe you're a good steward of their retirement savings. That means maximising the return, subject to risk tolerance, in a way that is as environmentally responsible as possible,” he says. 

O’Dwyer believes playing a meaningful role in effecting change means continuing to invest - for now - in organisations many see as part of the problem. That throws up intellectual and emotional challenges but he believes pulling investment from companies central to energy transition would hamper long-term progress.

“Most management teams, even with the biggest polluters, want to figure out a plan for net zero,” he says. “So, we need to be challenging but realistic about what's possible in the short term.”

“We are still investing in oil and gas stocks, but we are investing with the intention of ensuring those companies change,” he says. “However, through our reporting, we have to demonstrate to customers that’s not just nice words and action happens as a consequence. There's a huge amount of data that needs to be collected and collated to make that happen.”

As with Royal London’s wider transformation ambitions, O’Dwyer believes having a clear plan underpinned with investments in data and technology will help to deliver vital progress.

 “There's no point accumulating a huge amount of capital if you're going to retire into a world with food shortages and constant flooding,” he says, “We want our customers to retire into a world they can enjoy.”