Fintech Finance presents: The Insurtech Magazine Issue 01

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SPEED & RISK

DISRUPTING DISTRIBUTION

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It’s not all about the meerkats

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Exploring a brave new world with 11:FS Insurtech Insider

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CONTENTS

DATA 6

Grand designs Co-founder and CEO of Concirrus, Andrew Yeoman, is busy building ‘the new normal’ in insurance – re-imagining a business model that’s less to do with demographics and more to do with behaviour

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10 Renewal time Digital consumers can’t wait for insurers to catch up. Snails won’t win this race, says Ingo Weber, CEO of Digital Insurance Group

12 Making waves Hélène Stanway, Digital Leader at AXA XL, has helped plot a new course in partnership working… and it’s paying dividends

14 Failure is not an option An insurance business making eight failed payments a day will waste £100,000 a year fixing them. There’s a lot to gain from validating your transactions, says Apply Financial’s Business Development Manager Laura Bedborough

CUSTOMER RELATIONSHIP MANAGEMENT 16 Sizing up the market Global trade credit insurance company Atradius is using insurtech to create opportunities for small businesses that were previously limited to large corporates. Dirk Hagener, Director of Strategy, explains how

THEINSURTECHVIEW

2019

Insurtech has grown so fast over the last few years that it has become an industry in its own right – deserving of its own dedicated publication.

So, here it is: the first edition of The Insurtech Magazine!

We’ve an impressive line-up of features, not least our cover story – David Germain telling us about his transformational work at RSA. And we delve deep into how Insurance can use data in an effective way, promising huge breakthroughs when it comes to both mitigating risk and improving the customer experience.

Like any ecosystem, it is all about partnerships: forging alliances between established underwriters, carriers, brokers and other distribution channels.

18 Smart intervention

LIFE INSURANCE 20 Happy endings

22 Taking a moment Swiss-based online platform Vlot is aiming to change the life insurance landscape by using tell-tale data to anticipate and respond to ‘magic moments’ in our personal journeys.

Former broker and Co-founder Daniel Schmidheiny reveals how

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It’s a trend that I had the privilege to explore with some of the most exciting insurtechs during a panel discussion at Paris Fintech Forum. You can read all about it in this edition, which also features some of the more disruptive voices in insurance, including Vlot and Benekiva… bring it on

16

According to Zurich’s Head of UK Innovation, Mark Budd, connected tech is fundamentally reshaping the insurer’s role

An astonishing number of life insurance policies go unclaimed after a death. Bobbie Shrivastav, Co-founder and Chief Product Officer of Benekiva, set out to change that

ISSUE #1

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CONTENTS

36 24 PARTNERSHIP & TRANSFORMATION 24 A New Age man

42

David Germain, Group Chief Information and Technology Officer at RSA, is the man responsible for making sure the sun never sets on one of the UK’s oldest insurers

34 Plugging into PSD2

28 Focus & transform Those are AXA’s watchwords as it positions itself at the intersection of consumer technology and financial systems.

But according to Gareth Howell, former Executive Managing Director of AXA Retail, it’s really about remaining true to its roots

30 Giant steps Roused by stones flung by disruptive Davids, insurance Goliath Allianz is beginning to flex its muscles in new insurtech markets, as CEO Jacques Richier explains

32 Lending a virtual hand Banking Circle has already proved the efficacy of its model for fintechs, payments providers and banks.

So, why not insurance? Why not indeed, says CEO Anders la Cour

46 Striking a balance

Avaloq’s timely addition to its core banking services could offer insurtechs a golden opportunity to scale, says Product Manager Esther Kaufmann

Increasing the speed of insurance transactions doesn’t have to mean raising the risk, says Melanie Tromba, COO (International) with Instanda

11:FS INSURTECH INSIDER 36 Insurtech Insider: Boldly going forth!

PARIS FINTECH FORUM 48 Paris Insurtech Forum

In its Insurtech Insider podcast, 11:FS hosts Nigel Walsh and Sarah Kocianski go in search of potential supernovas in the far reaches of the digital insurance galaxy.

DISTRIBUTION 42 Revamping the insurance distribution model

Meet les perturbateurs – the disruptors – who are entering the insurance market on a mission to make it fun, fast and frictionless

LAST WORDS 50 How to avoid extinction – and other tips for insurers

The Insurance Magazine’s Editor in Chief Ali Paterson leads a panel discussion that reveals how far channels have changed… and how far they’ve got to go

Susanne Chishti and her team of expert editors have produced a manual for digital evolution and it’s essential reading, says Will Dove

THEINSURTECHMAGAZINE2019 EXECUTIVE EDITOR Ali Paterson EDITOR Sue Scott ART DIRECTOR Chris Swales ONLINE EDITOR YASH HIRANI

PHOTOGRAPHER Jordan “Dusty” Drew SALES James Butcher Chloe Butler Tom Dickinson Shaun Routledge

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Issue 1 | TheInsurtechMagazine

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DATA

Grand designs Co-founder and CEO of Concirrus, Andrew Yeoman, is busy building ‘the new normal’ in insurance – re-imagining a business model that’s less to do with demographics and more to do with behaviour Mirror, mirror, on the wall, who’s the most innovative of them all?

Gazing down on the radical Lloyd’s of London building, designed so that all the services, including the lifts, are on the outside to allow more space for the real work going on inside, you can’t help but draw parallels with the revolutionary new digital structures that insurtechs like Concirrus are architecting.

It’s taken more than 30 years for the insurance industry to catch up with the disruptive symbolism of the Lloyd’s Building, which was opened in 1986. The first insurtech startup lab to be financed

by Lloyd’s of London opened in September 2018, somewhat behind the countless fintech labs that are well-established

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around the globe to help banks come to terms with the digital revolution.

Andrew Yeoman, CEO and co-founder of Concirrus with Craig Hollingworth, believes it – and other insurtechs like it – will have as big an impact on the insurance landscape as the Lloyd’s Building had on the London skyline. And, much like that building, they will achieve it by bolting essential new services onto the outside of existing market operators.

Concirrus takes a fresh approach to solving challenges faced by the industry through its big data and machine learning platform Quest. Developed specifically for the marine and motor insurance sectors, Quest accesses and interprets wide-ranging data sets, combining them with historical

claims information to reveal the behaviours that lead to claims. It promises ‘new insights and rating factors that simply did not exist before, the ability to better deploy risk capital, improve loss ratios and drive down operating costs’. It also allows for the evolution of more differentiated products.

Yeoman believes better customer experience is achieved by creating many more touch-points in an industry that traditionally operates in the narrow corridors of purchasing, billing and claims.

So how can an insurer create products that will match the expectations of an ever more demanding and newly empowered, digital savvy customer base while maintaining profit? And how can insurtech encourage the sector to adopt www.fintech.finance

the technology that delivers it? Here, Yeoman discusses the challenges, trends, achievements and potential that he sees in insurance. And, like the Lloyd’s Building, it’s impressive.

INSURTECH MAGAZINE: When Lloyd’s started out in a London coffee house 330 years ago it launched an industry that was seen as providing the building blocks for economic and social progress.

Does insurance still fulfil that role today?

ANDREW YEOMAN: Insurance is probably the most exciting market because it underpins society in a way that people don’t appreciate. Without insurance, we couldn’t be here today – you couldn’t have come into this office because I couldn’t tolerate the liability of what would happen if something went wrong. You wouldn’t have been able to drive to the station or get the train, or walk down the street, or use a phone because the phone wouldn’t exist – there would be no communications infrastructure.

They couldn’t put a satellite up there, because what would happen if the launch went wrong and it exploded? Without insurance, the world simply cannot operate.

IM: The industry seems to have got along fine for the past few hundred years without the need for radical technology.

In fact, just now, the incumbents are doing rather well financially. So, how do they view companies such as yours?

AY: While there’s a swathe of alternative capital that’s fuelling the insurtechs, the industry might not necessarily understand what to do with them. Do insurtechs represent a threat to the core business model? Or are they elements to be incorporated to add incremental value?

Some of the biggest challenges they face come from understanding how to interact with new business models and new sources of capital, and how the value chain in their business is going to be recast.

We can learn lessons from the past – it’s what happened in the internet boom when we saw three organisational responses to the technology: those that ignored it, those that adopted it, and the ones we’ve titled the ‘but fors’.

The ignores were those who said ‘no one’s ever going to want to do banking or buy insurance over the internet because it’s fundamentally insecure’. We can see now that was obviously wrong. Others did adopt www.fintech.finance

it and might say of today’s technology ‘I can see how artificial intelligence (AI) and big data could be used to make better decisions for me’.

Then we come to the ‘but fors’. When we look at the internet, the ‘but fors’ are people like Amazon in retail, and in insurance the aggregators that compare the markets.

For them, there is no backstop to their business models. You have to ask ‘but for the technology, can the business model be operated?‘ And the answer is that if the internet were to cease to operate, their business model also becomes inoperable.

They are very technology-centric, but when we see those business models in insurance, the market will really take off.

IM: So what does this new age of insurance mean for insurers and their customers?

AY: Almost anything that can be sensed about our environment is now being sensed. Data from so many sorts of sensors is massive – everything from how, when and where you drive, to a room’s temperature, the air quality, to where a vessel (or vehicle) is and how it’s performing. Effectively, it means that everything which was previously unknown, can now become known, and that changes

Everything that was previously unknown can become known and that changes the basis for insurance. But we need technology to extract meaning the basis for insurance. But as an individual, you can’t process these amounts of data. We need technology to extract meaning. That’s one of the things we do at Concirrus.

Once I have meaning, it’s a case of understanding what the implication is for the insured. We have norms in the industry that can be unpicked. For example, it’s been normal to buy a 12-month car or travel insurance policy. But why does it need to be 12 months? I don’t travel continuously through the year.

The third area of digitisation is how insurance business is placed and, in today’s market, it’s primarily done manually. We sit here overlooking the Lloyd’s building, for

example, where the business that’s written today is paper-based: people walk in with bundles of papers and negotiate a deal. This model can’t persist because if I’m going to have real-time insurance, I can’t have a broker standing outside Lloyd’s going ‘run – go, go, go! Get that business stamped!’.

IM: The insurance industry is seen by some as a form of gambling. How can insurtech help reduce the risk?

AY: There’s a parallel between insurance and the gambling industry in as much as both put bets on uncertain outcomes.

In gambling, we’ve seen the placement platform allow new sorts of products. Those products are the kind of bets you might want to place. Historically, I could bet that Tiger Woods might win the Open; now I can bet that Tiger Woods will put the next shot into the water. Changing technology allowed me to place that bet because those odds could be calculated in real time, which created a new type of product.

If you look at what’s happened in the gaming industry in the last 10 years, it has grown, compounded by around 10 per cent a year. More fascinating still is that 80 per cent of revenues today are in-play betting – a product that didn’t even exist 10 years ago, but which now dominates the market.

We may talk about ‘revolution’ but I’d say it’s more about displacement. How will that pan out in the insurance industry? Well, in shipping I’m not going to see products that say ‘iceberg ahead, who thinks they’re going to hit it, who thinks they won’t?’. But in today’s environment, when there’s been a storm, there’s a market that says ‘the storm could go this way or it could go that way’, so now I can see that there’s an opportunity in the reinsurance market to place that sort of spot reinsurance. And the more accurate the data I have underpinning that, the more accurate that might be.

So, we can see some really strong parallels with gaming and, similarly, it’s going to result in new products, revenue growth and profitability.

IM: In digital insurance, how important is quick payment reconciliation?

AY: It will become fundamental. In the non-digital model, it can take six months for money to move from the customer to the insurer, and from insurer to customer, in the event of a claim. In the digital world, that can and should be done instantaneously.

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DATA I think a lot of insurance companies are waking up to the fact that ‘if I can offer a superior service, it doesn’t actually need to be the cheapest, it just needs to be the easiest’. So, if I know I’m going to be able to get claims paid quickly (without anyone haggling or disputing it), that actually offers value for consumers. Insurers offering those products will be differentiated.

IM: If insurance companies adopt a big data model, how does it help them to provide a more personalised customer service?

AY: Actually, our customers tell us that they don’t want big data. They just want small, concise answers. So, signing up to big data would be a little bit like signing up to more emails. I’ve been through a stage in my life

say ‘we can see that X is going to happen, therefore we’ve done Y’.

This whole new area we would call ‘pre-claim’. It’s when we can see that events are occurring that could lead to a claim – for example ‘there’s a build-up of moisture in the loft space, you need to take action’.

IM: So, a sort of pre-emptive strike?

Do you think that proactive assurance will become more important to the insurance sector in the future?

AY: We see customer-centric future business models, whether it be insurance, assurance, proactive or reactive, along the lines of ‘I’d like you to be my insurance partner so, if you see risk emerging, I would like you to either take action to prevent it

IM: How will Concirrus be contributing to that new business model?

AY: Our biggest goal is to demonstrate a sense of possibility for the industries we serve. Where we’ve been evangelising in the last year, we are starting to see customer adoption and creating that sense of a new normal. It used to be normal to rate businesses based on demographics; it will now be normal to rate them based on behaviour. Over the next 12 months, we want to take our customers and turn them into ranting and raving disciples of this new normal – and we will do that by making them hugely successful. So, today’s customers are very excited about the fact that we can turn our artificial intelligence (AI) and machine learning to pricing models and risk models. We’ve already

Future vista: Big data will unlock a new kind of foresight for the insurance industry

It used to be normal to rate businesses based on demographics; it will now be normal to rate them based on behaviour. We want to take our customers and turn them into disciples of this new normal when I signed up to email newsletters, shortly followed by unsubscribing because I got too many – big data’s a bit like that.

Concirrus is focussed not so much on selling big data, but rather selling tools that allow that data to be ingested, understood and presented to our customers in a way that they can gain insight. We want to be able to show customers the information coming at them and what they should do about it, or take it beyond recommendations and actually take the action for them. For example, we might

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or put a programme in place so that if it happens I’m compensated for it in some way’. Putting the customer at the heart of the business model is the way forward.

That may be a bit of a challenge for some of the incumbent players but we are seeing the insurtechs doing it, and we’re seeing an increasing willingness from the insurers – and, in fact, the reinsurers – to look at how that can be done. It will require new products and technology in organisations. And even some totally new organisations.

demonstrated that we can beat their models with our technology, which means they can find pockets of money in the market.

So, 12 months from now I’d like to be saying ‘we took this customer and improved their loss ratios. Then, we took this customer and allowed them to re-segment their business and grow their book from this to this while maintaining their loss ratios.

In every case, they did that with a lower administrative cost’.

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DATA

Renewaltime Digital consumers can’t wait for insurers to catch up. Snails won’t win this race, says Ingo Weber, CEO of Digital Insurance Group “Products are dead, it’s all about customer experience,” says Ingo Weber.

The CEO and co-founder of Digital Insurance Group (DIG) is musing over the challenge faced by both insurers and banks: how to retain existing customers while also finding new ones. Insurers, if anything, are at the greater disadvantage because they do not have access to new customer segments; neither do they have as much opportunity to build customer loyalty because, as he observes: “How can you create loyalty and then trust if you only interact with your customer base once a year?”

All the while, he’s looking over the industry’s shoulder to the GAFAs (Google, Amazon, Facebook, Apple), which are both close to their customers and have their own strong technology teams. Amazon was mooted to be in talks with European insurers about a comparison site in Autumn 2018 while, in the States, it already has a joint venture with insurer Berkshire Hathaway and JP Morgan Chase, which is focussed on reducing healthcare costs.

Google has a similar tie-up in the US with insurance provider Oscar Health.

According to the Capgemini World Insurance Report 2018, getting on for a third of consumers would be open to purchasing insurance from big tech firms such as Apple or Amazon.

“If Amazon offers you a bank account or an insurance product and gives you a €20 voucher on top of it, I would bet that 75 per

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cent of Millennials and digital natives would switch to become an Amazon customer,” says Weber. He believes fighting off that threat will be the real challenge for incumbents over the next couple of years.

Simply sending a renewal bill to the insured once a year is lazy practice by comparison to the close personal relationship Amazon seeks to build with its customer on a weekly basis.

“You have to engage with your customer because then you get insights, you get data, you can improve your offering, you can solve problems for them. You create a USP and, in the end, you create trust,” says Weber. And that pretty much sums up the fundamental belief system on which the Digital Insurance Group rests.

It was formed in June 2017 when two insurtech pioneers, Knip and Komparu, united, pooling more than 70 insurance, technology and business development experts.

Knip, Europe’s first digital insurance broker, rolled out supervised robo advice to consumers in Germany and Switzerland. It was the first app where an individual could manage all his/her insurances in one place.

Komparu had launched four years earlier as an aggregator, building leading insurance portals for insurance companies, brokers and publishers.

The merger was intended to further path-breaking innovation in Europe’s multi-trillion dollar insurance industry, which – like the banks – had been held back by legacy architecture. Now, poised on the

edge of the Internet of Things era, Weber believes DIG could deliver big benefits for insurers in terms of risk reduction, risk prevention and personalised products.

“Post the merger, we built a new technology stack and since then we’ve been focussing on being a next-generation technology provider to banks, insurers and brokers,” explains Weber.

DIG offers clients fully integrated digital insurance solutions for customers at speed.

“The biggest issue the incumbents face is that they have a very complex IT architecture and building innovation – new apps, new customer portals and data-driven products – takes a lot of time. That’s where we come in. We help insurers and banks to innovate fast by building new solutions on top of their existing technology.”

Weber says: “Its shared front-end framework means we write code only once, and then we can very quickly roll out new applications, new front ends, both on IOS Android and web applications, in a very, very short period of time.”

One seamless hub DIG’s software solution arm provides a white label customer engagement suite, including a mobile app, a digital sales and comparison toolkit, and a powerful ‘data pipeline’, which aggregates and analyses external data.

The customer engagement suite enables an insurer to quote, manage customer purchases and claims and help renew or cancel contracts. It includes a CRM system that enables push notifications and automates engagement with customers.

The digital sales and comparison toolset is a transactional as well as comparison tool that enables clients to

www.fintech.finance

compare multiple insurance companies and products. The third piece of the solution is a powerful application programming interface (API) and data platform that connects to an insurer`s legacy IT, including policy admin systems and databases. Crucially, it also connects the organisation to DIG’s data pipeline.

This helps to aggregate all kinds of external data, including contextual data, such as a customer’s location and health information, which the sales organisation or the robo advisor can then use to offer more sharply targeted products.

The platform, in effect, steals a march on the Amazons of this world. For example, when geolocation data spots a customer is at the airport, it can push a notification saying ‘hey, you’re at the airport. Are you travelling? Do you need travel insurance?’.

“This is the future of insurance,” says Weber. “The data-driven approach will have huge implications for underwriting. We will see much more lifestyle underwriting and DIG helps insurers to get there.”

The DIG platform is designed to evolve as home, work and leisure become ever more connected for the average individual.

“We are just at the beginning,” says Weber. “Once 5G comes along, we’ll have billions of sensors – lots of connected devices in our home, from our washing machine through to our home security system. The entire financial services industry can take huge advantage of these

data points and use them to customise personalised offerings for their customers.”

Backed by top US and European venture capital investors, including Zurich Insurance, DIG operates from four offices in Berlin, Amsterdam, Zurich and Belgrade for clients in Europe and Latin America – although Asian insurers are also now knocking at its door.

Communication is key While DIG mainly works with banks, insurers and brokers, there is a fourth emerging client segment – corporate organisations across industries and verticals offering employee benefits in the form of insurance, which also suffer from lack of interaction.

According to a survey of more than 1,000 employees conducted by group risk insurance provider Canada Life Group Insurance, employers should re-evaluate their communication methods when it comes to sharing employee benefits. One fifth of staff polled said they had received information about their benefits and perks

The biggest issue the incumbents face is that they have a very complex IT architecture and innovation takes a lot of time. That’s where we come in

when they first joined their organisation, but nothing since.

“We see many corporates that want to offer insurance products and services to their employees,” says Weber. “For them, we have built portals that will be integrated into intranets to give employees access to their corporate benefit schemes.

They also offer advice to employees.”

Such platforms are being adopted by employers as varied as government agencies, technology firms and even football clubs.

Evolving technologies are leading to massive opportunities in insurtech for boosting customer engagement like this, says Weber. The industry just needs to be creative in its thinking, but maximising customer experience has to be the goal because it leads to trust and loyalty.

“Consumers want to interact with their insurance providers in the same way they interact with Amazon, Google or Facebook.

This points to building customer-friendly products – mobile apps that allow them to manage all their policies in one place, buy insurances on demand, manage or follow through claims, and more,” says Weber.

“You have thousands of insurers around the world, they all have the same issues, they all sit on legacy, they all know they’ve got to do something. Now is the time to act.”

Setting the pace: Insurers have been slow to respond to the digital consumer

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DATA Uncharted waters: The Internet of Things and blockchain are combining to de-risk marine insurance

Making waves Hélène Stanway, Digital Leader at AXA XL, has helped plot a new course in partnership working… and it’s paying dividends Maritime insurance dates back to the 17th century when legions of clerks at various coffee houses across London, the most famous of which being Lloyd’s, laboriously used quills under candlelight to fill in ledgers and meticulously log the movements of vessels and their precious cargoes under their cover.

Fast forward some 350 years and the insurance industry is embracing the very latest digital solutions, notably distributed ledger technology, to benefit both insurers and insured alike.

In many cases, the risks haven’t changed, but real-time information and smart contracts are transforming the relationship between everyone in the value chain, most notably in the maritime insurance industry.

InsurWave, for example, uses vessel and Internet of Things (IoT) data held on the

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blockchain, combined with the insurance Smart Contract to automate, near real-time, insurance transactions of additional and return premium.

Unveiled in May 2018, the platform was developed by a consortium that includes AXA XL, container shipping operator Maersk, risk management specialist Willis Towers Watson, and underwriter MS Amlin. It’s an example of the kind of partnerships that were way off the radar a few years ago, but which in Hélène Stanway’s view as digital leader for AXA XL, will be a key way to innovate in future.

“Everything that the digital team does is connected to a business problem we want to solve,” she says of her department’s function. “Whether it’s a problem we know about today, or one we can foresee in a number of months or years, or that we think we can create

an opportunity out of emerging tech.”

She’s a firm believer in innovation through collaboration, internally between departments and externally – even with companies that might once have considered themselves rivals – as well as with insurtechs that can bring solutions to problems it would take an organisation like AXA XL too long to work up itself.

The reason behind this new-found fraternity is summed up in AXA’s corporate mantra ‘from payer to partner’. By adopting and adapting to technology such as the Internet of Things, artificial intelligence/ machine learning and blockchain, it hopes to work more closely with clients so that it can recalculate and reduce risk (sometimes by the hour or the day), to avoid incidents happening and, by extension, claims.

InsurWave is one of the most impressive demonstrations of this approach. By www.fintech.finance

combining the digital mapping of war zones with smart contracts, it gives the unfortunate captain at the helm of a vessel the choice of whether to increase the premium for the period that the ship is in danger and cross contested waters, or plot a longer course around them, with consequential costs in additional fuel and penalties if the cargo is late.

“One particular type of hull insurance is zones – areas around the seas that are

more prone to piracy and other dangers.

In most instances, you’ve no real view of where a vessel is at any particular time, how close it is to a war zone. But within a smart contract, we give a very detailed view of what the shape of a war zone is, by latitude and longitude, and when you start using vessel GPS data to determine when the vessel is going to hit the entry point to the war zone and when it’s going to leave it, you can automatically calculate the premium,” explains Stanway.

“That changes the decision-making process, because the captain of the ship can say ‘I know this is a war zone.

If I go through it, it’s going to cost me more premium, because it’s more risky; if I could go around, it will be slower and perhaps I’ll use more fuel but it’s less risky’. It puts risk decision-making at your fingertips.

“There are many problems that this type of tech can solve,” says Stanway, “but it’s

not without its challenges.”

Improving collaboration between the insurer and the insured, and putting rivalries aside among insurers themselves to employ digital developments, is central to Stanway’s vision of the future.

“I think the reason why we have been successful so far with Insurwave, is that we had all of the parties in the insurance value chain together, and we all had a common vision of what we wanted to achieve,” she says.

AXA XL also played a lead role in the B3i initiative, a joint distributed

ledger for reinsurance transactions driven by blockchain technology, which was developed by 15 global insurers and reinsurers and is aimed at producing significant efficiencies by cutting costs for the participating companies and, importantly, their clients.

Wake up and smell the coffee Perhaps one of the most intriguing examples of how digital technology is influencing not just premiums but also the decision-making process is AXA XL’s partnership with Colorado-based Parsyl Inc. It’s a supply chain data platform that helps shippers, insurers and their clients understand the quality of the conditions that sensitive or perishable products are kept in en route.

Utilising IoT and Parsyl’s sensors and expertise in analysing data such as location, temperature, light, humidity and movement impact on the cargo, AXA XL has been able to offer clients

enhanced loss mitigation and risk prevention services.

“Interestingly, one of the learnings was that you shouldn’t ship coffee to northern Europe in January or February, because it’s just too humid,” reveals Stanway.

“And, of course, if you can prove that your coffee beans have absolutely maintained their quality through temperature and humidity sensors you can sell them for more money at the end of the day. So there’s a whole risk mitigation angle, as well as ensuring the quality of the product. With all these things you just say ‘ha, I didn’t think of that!’.”

She gives other examples of partnership working that her team has been involved in which, she says, bring similar mutual benefits. They include participation as mentor in Startupbootcamp, which is focussed on very early stage startups. “We framed it in such a way that this is a learning opportunity for both groups,” says Stanway. “The startups learn from how to work with an incumbent, and the incumbent how to work with a startup.

“It’s about how do we solve problems in a different way? What caused somebody to go and create that startup? What’s that mentality like? What’s that energy like?

Two or three colleagues have continued to mentor their startups way beyond the end of the accelerators. It gives us a good step into the ecosystem that is the startup community and we find new ideas.”

Among the new projects being investigated by her team are several to solve certain issues AXA XL faces within the US construction industry. A number of startups are involved, with contracts on the cusp of being signed in 2019.

“We asked what are the problems we’re trying to solve? What are the opportunities we could create? And who are the people that could help us get there?” she says. “We’re going to bring together four, if not five, different startups, to help solve a problem that none of us on our own could solve.

“I’m a firm believer in that as the way forward. We could not have done the stuff we’ve done without collaborating.”

I think the reason why we have been successful so far with InsurWave, is because we had all of the parties in the insurance value chain together, and we all had a common vision of what we wanted to achieve www.fintech.finance

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DATA

Failure is not an option An insurance business making eight failed payments a day will waste £100,000 a year fixing them. There’s a lot to gain from validating your transactions, says Apply Financial’s Business Development Manager Laura Bedborough The paytech segment of financial services is shedding its skin almost weekly; regtech is pushing incumbents to keep up with its pace; in banking, fintech is helping build trust, promote convenience, and put the customer in control.

All these developments are no longer news. So, why is it then that insurance remains sluggish when it comes to adopting new tech. It’s not as though it couldn’t do with the help.

“The changes in technology and consumer needs are putting a strain on the traditional insurance business models,” says Laura Bedborough, business development manager at Apply Financial. “Whether it’s insurance, or any market, people now expect everything to happen instantly, and they expect a good customer experience.”

The insurance industry is specifically faced with two major issues: accelerating claims settlement and ensuring smooth premium collections. It’s these that Apply Financial is

keen to address with a software tool that has already been successfully applied to other areas of financial services.

Making sure that premium collection, which has traditionally been carried out at annual renewal or by monthly direct debit, is right first time remains a major challenge.

Out-of-date customer details and manual entry errors in the database result in failed collections that, according to Apply Financial, cost businesses approximately £50 for every mis-matched item, when you take into account bank charges, time spent fixing, resending costs and exchange rate fluctuations. According to its research, error in inputting account numbers and bank code errors make up to nine per cent of

Rejected and dejected: Failed payments and collections have an impact on costs and customer relationships

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faulty payments and billions in damage worldwide. Approximately six per cent of payments fail because the beneficiary data is either invalid or out of date.

The errors are not necessarily anyone’s fault. How many times, for example, have your bank details changed and how often have you thought to notify every organisation that holds the details?

Less cost, happier clients Established in 2010, London-based Apply Financial created Validate, a Cloud-based software service that helps verify bank transaction data. Using an API that plugs into a payment system at the front end, it ensures that the entered payment information is valid by cross-referencing account numbers and bank branch codes.

In case of a mismatch, it stops payment, thereby avoiding an error fee being generated from a bank.

So far, the tool has saved clients more than £125million in operational costs, processing more than £100billion in payments seamlessly and without error. It has reduced failed payment charges and increased straight through processing (STP) considerably. And, because of its ease of integration with any API-friendly interface, it’s streamlined customer experience, too.

With HSBC, Barclays, American Express, AXA, Carphone Warehouse among many benefitting from Validate, it’s not just improving consumer and business transactions but also having a positive impact on other aspects of business and entrepreneurship, such as timely delivery of goods.

“We validate direct debits on initial set up using the Validate API, so people can go online, input the bank beneficiary details for their regular monthly payments, and the tool removes all the issues around failed direct debits due to incorrect beneficiary information,” explains

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Bedborough. “So, the onus to set up the correct details is on the consumer who’s buying the insurance instead of somebody in the insurance company inputting that information and inadvertently making an error.”

The Validate Data Manager, meanwhile, automatically cleanses stored beneficiary details in advance of payments.

“The issue with beneficiary details and banking reference data and payment rules is that they change the whole time,” says Bedborough. “Validate Data Manager will automatically check to see whether there have been any changes, and then notify the insurance company, which can then notify the consumer to check what the new details are. This gives the insurance companies a proactive tool to support their clients.”

The issue with beneficiary details and banking reference data and payment rules is that they change In addition to the time and resource that are squandered in fixing payment errors, there is the damage it does to trust in the customer relationship when payments are delayed, which is particularly relevant in insurance, given the emotionally critical moments that it addresses. In travel insurance, for example, the average length of time to settle a claim is 20 days – too long if you’re stuck in a foreign country with a Visa ticking down, as anyone caught up in the February collapse of British passenger carrier FlyBMI will testify.

In a report that studied the impact of transformation on the insurance sector’s claims workforce last year, PwC found that ‘the skills and talent required at each level of those working in claims has remained unchanged for some years’, which speaks to the digital journey that insurance still has to make.

On a more positive note, the report went on to predict that ‘in 2030, most claims payments will be received quickly and with little to no intervention being required by a claims handler or finance team. Claimants

(or third parties) will receive payments direct to their account, with enhanced fraud checks being in-built into the process’. While that will take some time and larger effort by the industry, mostly around sacrificing legacy systems, it is evident from experience that consumers won’t tolerate delay.

From Bacs to instant payments Worldwide, insurtech companies are already striving to expedite claim settlement and build swift payments into the system from the get go. For example, Safelite Solutions, an auto glass repair and claims management company has announced a collaboration with Ingo Money in order to provide customers same-day claim disbursements through smartphone apps. This would enable customers involved in a car accident to upload photos of the damaged vehicle and receive an estimate within approximately one hour using the app, and funds will be disbursed instantly via Visa Direct.

Safety Insurance, an auto, home and business insurer from Boston, Massachusetts has also collaborated with NACHA – The Electronic Payments Association – to roll out a same day automatic clearing house payment for insurance claims.

Meanwhile, the largest insurance agency in Japan, Tokio Marine Holdings, is collaborating with Metromile to offer same-day auto insurance payouts by 2020.

Sompo Japan Nipponkoa Insurance, another Japanese insurer, has invested in Trōv, a US insurance partner, to offer same-day insurance payouts for stolen items by the end of 2019.

And there is another pressure building.

Apply Financial is already working with big players in the insurance sector to move away from Bacs and towards instant payments.

“This means that they need to make sure that the payment is correct upfront, which is where Validate API comes in,” says Bedborough. “Validate allows clients to validate in real-time. An instant payment has to be correct at initiation. Bacs payments took three days to process, so if there was a problem, operations had time to resolve it. But with instant payments, you don’t have that luxury. You have to make sure the payment is correct upfront, otherwise it won’t go through.”

Right-first-time collection of payments can be a business critical process; speed of claim disbursement can be a gamechanger.

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CUSTOMER RELATIONSHIP MANAGEMENT

Not just for the big boys: Technology is helping to extend trade credit to SMEs

Sizing up the market Global trade credit insurance company Atradius is using insurtech to increase opportunities for the small business community by offering information and insurance propositions. Dirk Hagener, Director of Strategy, explains how Big data and online platforms are opening up a potentially huge market with low penetration: credit insurance.

Once the preserve of major corporations, which buy it to cover their entire exposure to bad trade debt, smaller businesses are now looking to hedge their exposure to customers going bust.

Global trade credit insurance specialist Atradius, which has access to business information on hundreds of millions of companies worldwide, has seen inquiries rise year-on-year as businesses seek to protect their balance sheets from the kind of shockwaves that BHS, Carillion and General Motors inflicted on supply chains. And its ability to crunch big data has allowed it to tailor policies specifically to SMEs – even down to

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the level of an individual transaction.

“Until now, credit insurance has been very much focussed on bigger customers, such as large multinationals, and sold in established markets, such as Europe,” says Dirk Hagener, director of strategy and corporate development at Atradius.

“There is a huge opportunity for credit insurance – the challenge for a company like Atradius is to take advantage of the data we hold to develop and improve the services we provide. Technology is definitely helping us to open up new opportunities in different markets.”

Such harnessing of technology will undoubtedly improve liquidity for crossborder trade, giving smaller businesses the confidence to transact with foreign firms, safe in the knowledge that potential losses from non-payment are covered.

And that’s a comfort when you consider the worrying global level of escalating corporate leverage – non-financial companies worldwide have increased their debt burden from $46trillion at the time of the financial crash in 2007/8 to $74trillion in 2018.

According to the Bank for International Settlements, the amount of outstanding debt in all emerging markets is now slightly greater than the size of their actual economies. In China, the ratio of corporate debt to gross domestic product is above 150 per cent.

Platform changes It was against this background that Atradius is upgrading its core system to allow for more efficiency and improved customer web interfaces.

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Big data is being harnessed to reduce risk, increase speed and boost policy personalisation. Atradius has also sought partnerships to develop trade platforms where participants are vetted to improve trust between the trading parties.

Hagener admits that ‘the whole process, how the industry works together with customers, can significantly improve’.

“Credit insurance products are relatively cumbersome. You have to ask for credit limits, you have to send a non-payment declaration and so on,” he says.

“Traditionally, reaching out to SMEs has been challenging for us. At present, we are still working closely with specialised intermediaries who need to thoroughly understand the proposition. But if we can simplify that, it opens up huge opportunities for our market. We are using application programming interfaces (APIs) to build a better bridge to our customers so the new default is to deal with them online.”

Atradius launched its new online application, Atrium, in 2017, a portal promising a ‘fast, simple, user-friendly solution’ for its customers to complete credit insurance transactions. The platform connects to a back-office application based on Oracle business technology, constructed on a flexible architecture.

“It really is the best in class and has been warmly received by our customers and the broker community,” says Hagener.

“Meanwhile, for colleagues in our debt collection division, we have Agora, another customer-centric tool that, like Atrium, allows customers to monitor ongoing cases.”

Hagener believes the development of new online features and APIs will be the key driver of growth for credit insurers.

“Until now, customers have spent time typing in applications and making non-payment declarations, and APIs will basically make that all obsolete,” he says.

One size doesn’t fit all Atradius is owned by Spanish insurer Grupo Catalana Occidente and is based in Amsterdam. Its 3,700 staff are spread across 50 countries, meaning the firm has experience and knowledge of the myriad of cultural, political and legal demands of the markets its customers trade in.

Traditionally, the market penetration for

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a credit insurance proposition has been very high for multinationals, for which Atradius offers a sophisticated, tailored credit management solution. Customers can buy a credit insurance policy with customised terms and conditions, serving both the parent company and its subsidiaries, or standalone policies for specific situations. For large and medium-sized customers it has a flexible, modular credit insurance policy that protects against non-payment and can be adapted to customer needs.

But for SMEs, Atradius recognises that in some cases a whole turnover offering can be too expensive and some SMEs prefer to buy protection for single contracts.

It’s a case of the commercial insurance sector catching up with trends seen in mainstream insurance, such as motor or life, where policies are increasingly being wrapped around smaller parcels of risk, such as a single car journey.

Strategic partnerships Meanwhile, Atradius is also forming partnerships with market-makers in specific segments, such as with Swiss-based Kemiex.

Launched in September, Kemiex is an online exchange that enables companies to buy and sell pharmaceutical ingredients, plus additives and vitamins for the pharmaceutical, vet, food and feed industries. By joining the exchange, a trader can connect with a global network of companies that are compliant with regulations and quality controls.

Kemiex evaluates whether a firm using the platform complies with quality standards, while Atradius analyses their creditworthiness. The insurer can then provide trade credit cover for single transactions through one click on the platform. Risk is minimised and deals between ‘strangers’ in a highly fragmented, global market can be completed with confidence. According to Kemiex, the platform offers an ‘alternative to the current

trading processes that can often be time-consuming, opaque and limited to a personal network’.

Data-centric direction At present, Atradius makes around 220,000 underwriting decisions a day and 70 per cent of those are automated. While speed is desirable, Hagener says quality and reliability of data is ‘more relevant’.

“We have data sources across the world – we are in more than 50 countries.

Everywhere we operate we have several information providers, which are providing us with the information that we process further to build specific ratings for each company.

“At present, we have 260 million companies in our database, so you can appreciate the level of traffic and data that we must process every day. For such data analytics, artificial intelligence will prove crucial and we are working with IBM Watson so that we can analyse text with the goal of helping our underwriters to make ever better decisions.

“We are continuously strengthening our analytical skills with technology and additional data sources will boost our proposition around information and insurance in the future,” says Hagener.

Looking ahead, Atradius is working with partners to examine the potential around blockchain, but Hagener says such projects are secondary to the development of APIs in the near-term.

“The idea that we can have trusted trade all over the world with blockchain as the base technology, has a lot of charm,” he says.

“We need to be part of the game and we are hooking up w ith various consortia, especially with banks looking for supply chain blockchains, and examining if we c an fit into this proposition.”

But he concludes: “APIs, the connectivity element, is where it’s happening for us right now.”

Traditionally, reaching out to SMEs has been challenging for us. But if we can simplify the proposition, it opens up huge opportunities for our market

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CUSTOMER RELATIONSHIP MANAGEMENT

Smart intervention We are being watched… not by an Orwellian super state, but more likely by our domestic thermostat or our water flow meter.

According to London-based global information provider, IHS Markit, the world market for connected home devices will grow from just over 100 million units this year to about 600 million by 2021.

And that’s having a profound effect on how insurers operate their businesses.

As our smart spaces become ever more intelligent, companies are redefining their role as socially useful institutions; collecting and analysing data to prevent the worst happening, while being there as a backstop in the event that it does.

Take Zurich. It’s abandoned the classic insurance approach to innovation of ‘let’s wait and see’, instead using technology and advanced data analytics to avoid preventable losses. It’s shifting from restitution to prevention – and even intervention – in ways it never imagined.

Head of UK innovation, Mark Budd, cites a recent example. “We were looking at leak sensors and temperature sensors, and wanted to pilot this with a housing association,” he says.

“In the UK, Zurich is the market leader in terms of providing insurance services to the public sector, so we put 10 sensors in 10 homes for 10 weeks to see if we could mitigate some of the claims we saw through water damage.

“At the end of the pilot we went to see the housing association. When we sat down with them, they said ‘are you telling us we don’t have to put a human being in

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According to Zurich’s Head of UK Innovation, Mark Budd, connected tech is fundamentally reshaping the insurer’s role

that flat, three times a year, with a moisture sensor?’. We said ‘yes that’s right’.

“Very quickly the idea moved from mitigating a claim to how we could provide services around better maintaining a property.

“The best thing about this story is that one of those flats had really low temperature and high humidity, a breeding ground for mould, which can be really bad from a health perspective. We

People don’t just want the backstop of insurance; they want preventative advice, or services before they need the insurance called the housing association and they went around to see the flat. An old lady lived there and her heating and double glazing had broken down.

So, not only were we able to help the organisation with its smart maintenance, we could do something with a duty of care lens over the top of it, which is amazing. It takes the insurer from being

not just an institution that helps after an incident to an institution that can help people and communities.”

According to Zurich’s claims data, water damage is one of the leading causes of loss across property claims, but by monitoring boilers or pipes, sensors can alert owners to potential problems, enabling them to be fixed before they cause any real harm to homes – or, as this case demonstrates – even people.

And it’s this human-centric approach that Budd believes is crucial to future service provision and profitability. But insurers need help in delivering it.

Seeking out third parties Insurers’ prospects are not only being impacted by a shifting risk landscape, but by new competition from outside the traditional insurance industry.

Having recognised this, Zurich is seeking out and working with third-party insurtechs.

“Technology is increasingly an enabler for us,” says Budd. “The progression of the Internet of Things (IoT), artificial intelligence (AI), cyber and data presents a wealth of opportunities, not only to interact with the customer but also to make some of our internal processes a lot stronger.

“Other organisations, of course, also have access to that technology and they perhaps move more quickly than we would be able to. But while they have the agility and the technology, the challenge for these new guys is that they don’t have a customer base.”

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Zurich’s preferred option is to work alongside these insurtechs to deliver the kind of smart services that make a real difference to people’s lives.

“We are getting better at understanding the environments the insurtechs operate in. And we don’t try to integrate them into our organisation, we like to leave them where they are,” says Budd. “There is a balance between the two cultures. We often bring an element of expertise to the party that perhaps the agile startup didn’t know it needed.”

Zurich stress tests its ideas by subjecting them to scrutiny from various internal departments and customers, following a ‘fail fast’ policy that accelerates its ability to release value early from the ones that go on to be adopted. Among the partnerships it has struck up so far are Laka, a UK-based ‘disruptive bike insurance product’, and FaceQuote, a tool that uses selfies to educate customers about life insurance.

Further evidence of Zurich’s aim to transform the industry is its Innovation World Championship – a global competition to collaborate with the brightest startups and entrepreneurs from across the insurtech space. Launched in September, the contest focusses on startups with established products or services, and provides

the winners with the opportunity to apply their solutions to Zurich’s customers.

“Undoubtedly, insurtechs can give us the edge in being able to build technology and get it to market,” says Budd. “Customer focus, simplification and innovation are our three strategic pillars.”

But adopting new ideas from outside of the organisation is only half the story.

In February last year, Zurich launched its UK Innovation Foundry, an initiative aimed at making it better able to meet the ever-changing needs of consumers, as well as promoting a culture of innovation throughout the company. The Foundry provides support to develop any idea, from new in-company processes to new products and technology.

“Our Innovation Foundry is a facilitation function. We tend to

start with problem areas, tease ideas out of the business and facilitate the growth of that idea, or even fail that idea fast, which is often as successful as progressing it,” says Budd.

“The trick is really for the insurance industry to work out how it can break initiatives or ideas down into their component parts, and release the most valuable thing early. Insurers need to get into the habit of doing that because the one-size-fits-all, all-singing, all-dancing products just take too long to build and by the time they are, you’ve missed the crest of the wave.”

If anything, he believes there is more opportunity for growth in the insurance sector than ever before.

“The requirement for people to be able to insure against a risk they don’t want to happen is never going to go away, so I think there’s longevity in the insurance business.

But I think, increasingly, customer demand will mean that people don’t just want the backstop of insurance; they want preventative advice, or services, before they need the insurance.

“Over time, the word insurance will become more associated with prevention, where we try to help you stop things going wrong; insurance itself will just be the backstop.”

Catch me when I fall: But in future, insurance will be more about preventing the fall happening

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LIFE INSURANCE Frustrating and slow: Life insurance claims could be made easier

Happyendings

An astonishing number of life insurance policies go unclaimed after a death. Bobbie Shrivastav, Co-founder and Chief Product Officer of Benekiva, set out to change that A mountain of important paperwork accumulates over the course of a person’s lifetime and often buried in it somewhere is a life insurance policy.

Each year, several million contracts are taken out globally to protect assets and loved ones in the event of our death but, all too often, the precaution is taken in vain.

Because, according to Benekiva’s CEO Brent Williams, only 30 to 35 per cent of policies are ever claimed back by a beneficiary.

The unsettling number is chalked up partly due to a failure to communicate the existence of a policy to a beneficiary and partly due to the long, resource-costly process of dealing with insurance firms.

Twenty-year-old Steve from upstate New York lost his mother in December 2009. “Her employers had paid into her life insurance but never sent a letter to inform me of its existence. If a counsellor hadn’t

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mentioned the idea, I would never have thought to look,” says Steve. “I sent the insurance firm everything I found in her study drawers, but they kept sending claim packages, asking for more. It took a year and was a mind-numbing, frustrating obstacle course.”

He should consider himself lucky. His mother’s life insurance firm paid out eventually. Many more fail to recoup rightfully owed sums. Commonly cited reasons include beneficiaries not having been made aware of a policy, undocumented name or address changes and beneficiaries waiting too long to establish themselves as such with insurance companies.

By law, carrier firms are obliged to do their level best to notify beneficiaries, but despite this the total wealth which seeps into government coffers as a result of escheatment has been estimated at around $1billion in the US, according to an

American independent study, and £1billion in the United Kingdom, according to the Unclaimed Asset Register.

Brent Williams smelled smoke in 2005 while working as an advisor at the Fortune 500 insurance and finance firm Principal.

“The stat felt unimaginable to me – how can so many policies go unclaimed? Due to my financial background, I believed (and still do) that life insurance companies want to pay. It’s their number one priority.”

Initially believing the problem to originate form a breakdown in communication, Brent’s research eventually pulled back the curtain on a system haemorrhaging from four far more serious problems. Bobbie Shrivastav, Brent’s co-founder, takes up the story.

“The first problem was that the industry hadn’t seen digitisation. The majority of carriers operated on paper-based workflows, so, when a claim came in they www.fintech.finance

would quote it, file it and pass it around in physical folders. They were leaving paper trails with endless opportunity for error, misplacement and loss.

“The second problem was the retainment of 'modern' legacy tech workflows and policy admin systems that are still COBAL or RPG based. This was a particularly big pain point as it was challenging to manipulate, integrate and maintain, all of which contributed to the third and fourth issues: an inability to keep up with National Association of Insurance Commissioners [the US standard-setting body) regulations; and zero support for beneficiaries. It begged the question: how could an old process on an even older system keep with up with a long process, with laws and circumstances always changing?”

Realising that he had uncovered a ticking timebomb, Brent Williams teamed up with Jason Dively and power-couple Bobbie and Soven Shrivastav to build a solution that would streamline insurance firms’ workload while guaranteeing improved payout rates and customer ratings.

After two years of research, the product was launched in March 2018.

A white knight solution Multilayer problem solver Benekiva – which stands for beneficiary (Bene) and chamber for all (Kiva) – is a software as a service (SaaS) platform that first and foremost releases carriers from paper processes by digitising all documents and forms.

“But there is more to it,” says Bobbie Shrivastav, who stepped into the role of chief product officer. “Having a 100 per cent digital claims process is a historical first.

Now, rather than fumbling with the process internally, carriers are suddenly given the tools to implement important steps like automatically updating policyholder information, better managing beneficiary information, notifying and being notified of events. They can even take the opportunity to retain the beneficiary as a new client.”

From managing the acquisition of a policyholder to speeding up processes and payouts, the Bene-Claims, Bene-Retention and Bene-Notify services found on the platform remove all prior friction.

Additionally, the Cloud-based platform can keep a perfect historical record of policyholder transactions and offer real-time updates, thanks to a private blockchain option. Apart from improving www.fintech.finance

its reputation among consumers, the real value for the life insurance industry is in realising efficiency savings throughout the claims process and offering the opportunity to retain the asset by serving the beneficiary. Ultimately, logic would say a company could retire its tech stack and use Benekiva exclusively to handle its claims.

Allowing for better compliance via proactive research was another priority.

“We honestly believe that insurance companies want to pay beneficiaries, they just don’t know when to do so,” says Shrivastav. “Bene-Notify combs through death registers and third-party sources for possible changes in circumstances that would be useful for carriers, while Bene-Compliance handles regulation. In the US, escheatment laws on assets and property is a regional affair, so we knew offering a support that kept track of all subcategories in the different states would be extremely helpful.”

Some of the features, like automation of repetitive actions, are intuitive digital upgrades, but it could also unlock 21st Century customer experience.

Customer experience has been overlooked for too long. Every step of the way, we stop and think: what about the beneficiary?

“We are especially excited about Bene-Configurator, the built-in configurator which maps data. For many firms, this allows ease of integration without having to create countless APIs,” enthuses Shrivastav.

“The opportunities are boundless, and the conditional logic document management system is particularly forward-thinking.

Instead of playing that ping pong battle, carriers can turn their claims processes into a revenue-generating engine through robust analytics, notification and asset retention.”

From its website to its YouTube videos, the team’s enthusiasm for assisting insurance firms is apparent. But perhaps the most important aspect of the entire business is how it makes customers feel.

“Customer experience has been overlooked for too long. Every step of the

way, we stop and think: what about the beneficiary? The overall claims experience should leave them feeling that they have been dealt with efficiently, sensitively and proactively from the very beginning,” says Shrivastav. “With a Benekiva partnership, policyholders can expect to feel and be proactively supported by the carrier from the moment they sign. And as for the beneficiary, they will be able to start their claims process on a desktop or mobile – because everything is mobile now – on a platform that pre-fills information before allowing them to scan missing documents with a snap of a phone camera. Once submitted, they can then watch in real time as their file is reviewed by an employee, before being paired with a financial advisor, and electronically notified. Finally, payments will occur within 48 hours directly to their account, thanks to Benekiva taking the payment from cheque to bank transfer.”

The team was conscious that if Benekiva was to be the partner of choice it would need white label capabilities and a full spectrum of integration methods.

“The future isn’t about us, it’s about helping the carriers,” says Shrivastav. “We’re all about flipping the script. If we do our job right, we look like part of the client system.”

Benekiva has sent shockwaves across the American insurance industry. Within months of its bare bones launch, two insurance carriers signed on as clients, and others – like Fiserv – joined as partners.

By adopting digital disbursements from Fiserv, Benekiva has reduced claim payout timescales from months to as little as 48 hours, with the payment portion of the process completed the same day.

While it’s focussed for now on life insurance, its model is applicable to any vertical that has a beneficiary as the end point – and most of them could probably do with some ‘bene’ digital treatment.

The Benekiva team hasn’t resorted to marketing to get the company’s message across. Rather, it hopes the authenticity of its problem-solving technology and the warmth in its #beneficiaryfirst aspirations, coupled with positive reviews, will speak to firms. While some might think relying on such organic growth unwise, Benekiva is confident in the knowledge that today’s biggest startups were built by simply taking existing businesses – like taxi hailing and food delivery – and making them irresistibly simple. It aims to be not just good, but great.

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LIFE INSURANCE

Taking a moment

Swiss-based online platform Vlot is aiming to change the life insurance landscape by using tell-tale data to anticipate and respond to ‘magic moments’ in our personal journeys. Former broker and Co-founder Daniel Schmidheiny reveals how You know you’re getting older when you consider buying life insurance. It’s probably around the time that the realities of parenthood hit you, because that’s the milestone at which many people realise they need it.

So it was for one of the founders of Vlot, the startup working to make what’s often considered a deeply unsexy product positively desirable and effortlessly simple to arrange.

Sandro Matter was caught up in a personal maelstrom – there had been a recent death in his family, he had two young daughters and he and his wife had just built and moved into their new house. A feeling of mortality hit and, after wasting time meeting insurers and his bank, he was pointed by a friend towards broker Daniel Schmidheiny.

The two hit it off and, during the conversation, it occurred to them, ’why

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does life insurance have to be so complicated?’, swiftly followed by ’so, what can we do about it?’.

The answer is Vlot, the insurtech working to simplify life cover and, importantly, keep it relevant and up-to-date as a customer gets older and their personal circumstances change.

Founded in July 2017, Vlot’s online platform for end consumers has already gone live in Switzerland, assessing a customer’s needs, their existing cover and filling any gaps. A custom-built policy can be created in minutes; Vlot then continues to track the customer through various data sources to alert the individual when changes are needed – such as when a partner stops working to care for a child.

Its B2B white-label offer for insurance carriers, banks and bank software providers is at proof-of-concept stage.

The platform is clearly cutting edge, especially in the country that spawned it

– Switzerland – where the business of insurance is mostly still carried out face to face with a broker.

Schmidheiny says: “The UK market is a long way down the road of using online platforms – getting your insurance online is normal. I’ve had ex-pat customers here in Switzerland who are not used to engaging with brokers and agents. They ask ’where is an online website where I can get insurance?’. It doesn’t exist.”

But there’s more to Vlot than smart delivery channels.

“We’re pulling people onto a platform where they can arrange cover because it’s faster and far more efficient than a manual process. But, ultimately, we believe that the distribution of life insurance will shift from the current standalone sales approach to a pull model where people buy it alongside another product, such as a mortgage,” says Schmidheiny. www.fintech.finance

Vlot is developing two lines of business.

The first is a B2B2C product that helps insurance providers distribute their policies to the market. The second is the provision of tools to an insurer or broker to improve the efficiency of their internal processes.

“When working with a bank, insurer or software provider, we sit down and scope a proof of concept, which basically means we take the minimum viable product or process they want to innovate and we use a part of our product that solves the problem,” says Schmidheiny.

“Next comes a small pilot to test the concept. Then comes the phase of bringing the solution to market. We have multiple POCs running, we’re talking to stakeholders and have the ’good to go’ from executives at the top to put our innovation into action.”

Vlot’s B2B2C offer is a platform whereby the customer enters data so the system can build a model of their needs. An individual’s existing cover, including, where applicable, their employer’s life and sickness cover and any social security benefits, is factored in and the gaps are filled with an insurer’s policy.

The platform uses artificial intelligence to analyse data that can be drawn from multiple sources, held by the customer’s bank, for example, making the revised Payments Services Directive (PSD2) particularly relevant to its model.

Vlot has partnered with Swiss banking software provider Avaloq, which provides its software-as-a-service banking suite to more than 150 banks worldwide.

The benefit of the collaboration means Vlot can potentially provide its service to those Avaloq clients through Avaloq Banking Suite, thereby avoiding the complicated business of hooking up its technology with each individual bank.

The partnership also helps to speed up the necessary regulatory processes that Vlot as a startup must go through.

Schmidheiny says: “We operate in a highly regulated market with hurdles such as data privacy to jump. We need to cooperate with technology providers and platform providers such as Avaloq.

We’re really thankful we have a partner there that we can work with.”

Look, no hands!

Schmidheiny says Vlot’s consultancy offer to insurers is particularly relevant in those www.fintech.finance

areas still reliant on manual processes to follow the customer journey.

“An insurance agent or a broker will have several separate little tools to make the various necessary calculations, but they’re rarely packed together in one tool,” he explains. “I worked for a large insurance company before I became a broker, so I know the challenges. Because of the lack of automation, firms have issues with streamlining. There’s a lack of efficiency and that has an impact on margins.

“With our technology, we can offer tools to help brokers and agents streamline services, and it also serves the purpose of helping the customer to understand the product. Instead of presenting them with charts and lots of paper, we can show them our analysis in an interactive, digital way.”

One of the USPs of the Vlot platform is its ability to keep a customer’s life cover relevant and up to date. When personal circumstances change, such as a salary increase, the arrival of children or divorce, a typical customer rarely thinks to revisit their policy. Vlot looks for what Schmidheiny calls these ’magic moments’ and contacts the customer when they occur.

We analyse their life because that’s where insurance belongs: in context “We can alert the customer to what needs to change in terms of cover,” he explains. “We give him/her a button – ’yes, I want to make that change’ – and in the background we adjust the cover, issue a new policy and put the new amount onto the customer’s credit card, so it’s all done automatically. Compare that to the present model where an insurer prints out forms to be sent and signed, then it goes back to underwriting, and the whole process takes several weeks.

“We anticipate a customer’s magic moments if we don’t have any hard data, but as soon as we have transactional data, fed to us through a core banking system, such as Avaloq’s for example, we have much more insight. We’ll see a pay rise that could trigger a different standard of living. We would also alert a customer

if they should recalculate their cover downwards, for example if they change jobs and are now in line for more money from an employer in the case of death or disability.”

In terms of data sources, Schmidheiny says his firm considered using social media but, in Switzerland at least, customers were resistant. Regardless, he says monitoring transactional bank data and customer behaviour is enough to develop a system that keeps an individual fully covered.

“A lot of insurers ask the wrong questions,” he says. “The first question when a customer enters a website is usually ’please enter the amount you would like to insure’. And the customer doesn't know. Then the second question is ’how long do you want cover for?’ and the customer doesn’t know that, either.

“Instead, we say ’we have an online tool to help you find out what you need’. We analyse their life because that’s where we think insurance belongs: in context. We use social security data here in Switzerland, which speeds up the process so a customer spends only about five minutes giving us information. If the customer is coming to us via a bank – when perhaps they are arranging a mortgage – we can pull the data from the bank’s system. The customer doesn’t want to enter his/her data a dozen times per day. It’s all sitting there; we’re just tapping into it.”

Schmidheiny believes Switzerland’s conservative insurance industry, though currently sitting comfortably with a huge customer base and big margins, is ripe for change. But he’s selective about who Vlot works with.

“As a startup we need speed, we have burn rates and we need revenues to cover the burn rate and to grow,” he says.

“Many insurers don’t yet feel the need to change and decisions are made slowly.

So, what we’re looking for is insurance companies that have proven they want to work with insurtechs, that have a track record of innovating their own processes, of picking up on changing customer needs and developing their strategy.

“We’re very positive. We’ve had signals from key players that they realise it’s time to move, it’s time to embrace that digital transformation.”

In short, it’s time for the insurance industry to have its own ’magic moment’.

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David Germain, Group Chief Information and Technology Officer at RSA, is the man responsible for making sure the sun never sets on one of the UK’s oldest insurers Successful transformation depends on deciding what you will change as much as it does on deciding what you won’t. And when you have more than 300 years of heritage and systems to choose from, as RSA (formerly Royal Sun Alliance) has, that’s a tough call.

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Since 2017, the man who’s made it is group chief information and technology officer David Germain. The first to hold that title, he has overseen the centralisation of platforms, the unification of data, the introduction of new web-based interfaces and digital experiences for consumers.

His job is made even harder by the organisation’s federated structure. One of the UK’s largest general insurers and a FTSE 100 financial services company, with capability to write business in more than 100 countries, its 12,600 employees generated net written premiums of £6.7billion in 2017. Its most recognisable consumer-facing insurance brand is MORE TH>N, which focussed on providing personalised customer service at its launch in 1996.

Germain says that, working in such a portfolio organisation with multiple brands means that ‘you’re dealing in a matrix’. As well as understanding IT operations, software delivery, the project lifecycle, working with business partners, stakeholders, third parties, and dealing with procurement teams, Germain needs to be up to speed with IT risks and cyber strategy, keep an eye on RSA’s technology as well as its budget.

“You’re dealing in strategy, architecture, influencing, driving a way of change through the organisation,” he says.

“All the while being empathetic towards execution leaders www.fintech.finance

PARTNERSHIPS & TRANSFORMATION because they’re under tremendous pressure to deliver results.”

He’s preoccupied with questions around how a business that’s expert at weighing up other people’s risks can reduce its cost base without increasing its own exposure.

“What are the elements we need to introduce into our architecture that are going to create more competitive advantage? What’s going to support our customers’ needs in the long term, but also create that operational efficiency, which is a huge lens for our business today, as it will be tomorrow?”

These are just some of the questions; but there are others.

“It’s taking that abstract view of the organisation and working at a different level, with a different group of stakeholders, but still creating a technology environment that’s fit for purpose with the RSA group,” says Germain.

His responsibilities are truly vast and underpinned by the need to deliver shareholder value. Much of it comes down to managing expectations.

“You have to have an operating plan because you need that attention around your P&L – you have to understand what those levers are, and what you’re moving towards in terms of outcomes and expectations,” he says. “We have a very strong roadmap here. We have measurements and KPIs associated with what our best-in-class metrics look like for us and for our shareholders. We have modernisation plans around creating a future architecture and blueprint, specifically around cultural changes that we’re seeing in the industry.”

Creating a leaner, more agile environment necessarily involves strong cost containment in relation to RSA’s legacy environment.

“Everything from decommissioning plans (we have running platforms where the usage is pretty low), and looking at our server and our environments; it’s predominantly about understanding what capacity we have and need – and don’t need. So, it’s about putting a stronger capacity management view across that.

Looking at our operating model in general, scrutinising it, understanding where it can be leaner, where we can leverage better partnerships, what we want to insource, what we want to outsource, and looking at the mix of our third parties. www.fintech.finance

The promise of connectivity The future lies in connectivity, believes Germain – in IoT, (Internet of Things); gamification, wearables, technology that delivers data but equally serves a broader function of enriching the brand experience and personalising the product, making insurance feel much more like a service.

From cars to health robotics, RSA’s main aim in adopting such technology is cost mitigation, although there are undoubtedly other benefits to be realised from the vast amount of data that connected lifestyles can deliver.

Its MORE TH>N Smart Wheels insurance for young drivers, which relies on a black box to record their driving behaviour, has made it one of, if not the largest writer of telematic products. Around three years ago, it took that learning and applied it to other areas, including the home, health and lifestyle insurance.

Some insurers see such devices purely as a way of adding value and getting closer to the consumer. RSA’s strategy is only to adopt them where it’s proven they can mitigate claims, allowing it offer products at a price comparable with standard insurance policies.

For example, last year it began testing a self-installed leak detection device called LeakBot, which it plans to roll out with the cost being offset by

fewer claims raised against incidents of water escape.

In 2017 it introduced its first wearable for pet insurance customers when it invested in fintech company, Pitpatpet, creators of the PitPat dog activity monitor and dog care intelligence data platform.

The monitor attaches to a dog’s collar and then prompts recommendations about the pet’s health and fitness via its mobile app to help owners improve pet welfare. They receive regular updates on their pet’s activity levels: walking, running, playing and resting, as well as calories burned.

As the largest insurer of cats and dogs in the UK, RSA was aware that Kennel Club estimates of between 30 and 60 per cent of Britain’s 8.5 million dogs being obese was not good for business.

In the most extreme example of it becoming involved in wearable devices, RSA has been funding research into exoskeletons to test the theory that health insurance claimants could be helped back to independence, and work, faster. It’s said such aids could reduce total care costs by as much as 50 per cent.

“Connected insurance is a disruptor, and there is a very real awareness that customers will expect solutions to be added to our products and service,” says Germain. “We are constantly having a healthy tension and debate around our digital agenda and our digital operating models and our customer experience.”

Connected insurance is a disruptor, and there is a very real awareness that customers will expect solutions

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PARTNERSHIPS & TRANSFORMATION “We scrutinise all aspects of our IT capability to ensure we are meeting our operating plans and our commitments.

But we also have a strategic roadmap that ensures we are modernising as we go along to ensure we’re fit for purpose and competitive in the future.”

That future is likely to be increasingly defined by usage based insurance (UBI), the Internet of Things (IoT), gamification and wearables when it comes to product development; and automation, artificial intelligence, including machine learning and data analytics, in the back office.

The better you understand your customers’ behaviour, the better you can price for the product

“RSA is one of the premier providers of telematic solutions, specifically in our UK book, because the better you understand your customers’ behaviour, the better you can price for the product.

“Moving forward, we will see a lot more usage based insurance.”

But before you get too carried away with

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the products that new technology allows you to build and price, the architecture has to be right. RSA’s lets it trade through different distribution channels and create different types of service models.

“We’re in a position to be relevant and to be fast followers based on the investments we make in our architectures and in modernising our environment,” says Germain. “The key for me is for the distribution models to be product-centric, creating a digital environment that allows us to economically integrate with other organisations out of third parties. It’s got to be married up with doing it in a safe and secure manner for our organisation, which allows us to understand what the competitive threats look like, and what it does for our commercial models. ‘“It’s about making sure you have an API economy – an API architecture that stands up to the test of disruption in the industry.

Then green shoots will start to appear as different models start to disrupt our environment.”

But he’s choosy about which of the latest technology kids on the block he’s happy for RSA to partner with.

They need to be fully assessed for the value any potential partnership will bring to the product.

“We’re really starting to see a heightened focus on technologies in the market, and how they can be exploited and deployed.

“We need to ask, what does that mean for our commercial model, does it stand the test of time, does it create a disruption in our market?

“We’re seeing a lot around Internet of Things (IoT), gamification, and consumables and wearables.

We’re seeing a lot around automation and a heightened focus on how these technologies can support operational efficiency. It’s how we’re working on aggregator sites, everything around our pricing and rating models, coupled with how we’re dealing with operational servicing requests and claims processes.

“And then you get to the customer centricity aspects, and we need to start figuring out and thinking more around ‘how do we get to that seamless interaction, and that seamless customer journey, end to end?’”

The dead hand of technology?

Insurance is a deeply human industry, says Germain

Customer centricity and UBI

Developing customer centricity depends on how RSA utilises data to better understand consumer behaviour because, at the end of the day, ‘consumers want products that really work for them’, says Germain.

And one of the lead contenders in this product race is usage based insurance (UBI). According to a report by Global Market Insight, UBI is set to grow in the US market from its current value of $34billion to more than $107billion by 2024. By the same year it is also projected that the North America UBI market will hold a majority market share of more than 35 per cent.

“The first lever we need to be aware of is UBI,” agrees Germain. “That’s the major

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Automationandefficiency The insurance industry has been slow to embrace robotic process automation compared to other areas of financial services – which is curious, given the routine nature of many of its traditional tasks. But automation in all its forms could be set to become the insurance market’s primary business strategy.

Not just because it brings about improved operational efficiency, but because it also helps to reach the right clients and nurture the right prospects.

Germain approaches it in terms of: “How we better exploit automation – how we derive a set of processes and a better understanding of our customer behaviours to understand where it makes sense to automate and where it doesn’t.”

At an entry-level, RSA had huge success when it introduced marketing automation to improve audience segmentation, delivering campaigns in a third of the time it had previously taken, while

increasing lead generation and more easily targeting individual groups and subsets.

Germain’s job is to understand the potential impacts on the business better.

He takes a measured approach.

“There’s RPA, (robotics process automation), automating your back office services, and artificial intelligence around chatbots and service requests – that’s probably the end game. The starting point is understanding your customer journeys and what information you can standardise and script, and what you can automate in your current operational environment,” he says.

“But we get excited around operational efficiency – we have business leaders who assume we can go to the end game straightaway; there’s a lot more we can do before we even reach the end game.”

And that doesn’t necessarily mean every job will be sacrificed within what has been a labour intensive industry.

move that’s going to happen in our industry.” Why? Because people don’t want to pay insurance for the (often long periods of ) time they’re not doing something that requires insurance.

Take car cover – ‘insure me only when I’m driving and for the quality of safe driving I present’. Or holiday insurance – ‘insure me when I’m actually away.’ It gives the customer what she/he wants but the trade off has to be, ‘I’ll share my personal data with you to personalise my insurance rates and enjoy better value for money.’

Telematics, or external tracking systems (‘black box technology’), were first adopted in passenger and commercial vehicles to capture data about a vehicle’s condition and the motorist’s driving behaviour. It is then analysed by car makers and insurance companies or their third party partners and used to calculate premiums that directly relate to how often and where the vehicle is used. But why limit it to cars? With the ever growing numbers of smartphones, what about other forms of transport, like bikes; holidays; and even work?

Ultimately, UBI could reduce consumers’

premium rates, and personalised insurance quotes will become the norm. Keen as he is for this happen, Germain believes that right now RSA needs to focus on exploring the value of UBI before implementing products.

“For me, the key is getting a better understanding of how UBI is going to change our industry. It’s underpinned with setting up an architecture that allows you to be agile and then improve the customer centricity, the product centricity and the digital experience over time.

“In order to understand your customers’ behaviour, you really need to understand the data, and you really need to utilise IoT, and sensory-based technologies that can be plugged in to hardware, or edge computing, or in to a systematic device.

“We’re very fortunate, we’ve got the data.

It’s how we exploit it, how we utilise that data to better understand the products, and better exploit those products in the future for our customers. That then links you back to customer centricity, because they want to have products that really behave for them as the industry continues to be disrupted.”

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“Human behaviour is human behaviour. Sometimes you just need to have staff in place. So, I don’t see an example where we’re never going to have human interaction in insurance.

It’s going to be there in some way, shape, or form. But, I think we can do a better job of how we exploit these technologies for high volume.

“We work and we trade, specifically in our personal lines business, in a highly interactive, digital environment. So, there are plenty of opportunities.”

I don’t see an example where we’re never going to have human interaction in insurance. It’s going to be there in some way, shape, or form

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FOCUS & TRANSFORM Those are global insurer AXA’s watchwords as it positions itself at the intersection of consumer technology and financial systems. But according to Gareth Howell, former Executive Managing Director of AXA Retail, it’s really about remaining true What do a smart mobility solutions provider (aka a specialist in autonomous vehicles) and a global insurer have in common?

Answer: innovation In October, at the opening of the 2018 Paris Motor Show, Navya, the leader in smart and shared mobility solutions, announced a three-year partnership with giant insurance and asset management firm, AXA. The goal is to develop insurance solutions specifically tailored for autonomous vehicles, with AXA providing customised solutions for Navya’s vehicle manufacturing business as well as its clients. It’s also an opportunity for AXA to better understand the future insurance requirements associated with autonomous vehicles, which some experts predict will account for approximately half of vehicles sold and 40 per cent of all car journeys made by the 2040s.

Data sharing with Navya will help AXA gain in-depth knowledge about this motor vehicle segment and sharpen its customised insurance product portfolio.

Around the same time, AXA’s specialist commercial insurance division AXA XL, announced it had partnered with the newly out-of-beta, Colorado-based, insurtech and supply chain data platform, Parsyl. It offers an Internet of Things quality assurance and risk management solution that helps container shippers, suppliers and insurers understand the quality conditions of sensitive and perishable products as they move through the supply chain, both in transit and storage, from source to final destination. Its co-founder and CEO, Ben Hubbard, believes that the marine insurance market could witness radical change by embracing insurtech.

Both alliances are in line with Ambition 2020, a vision document that AXA had created to chart the organisation’s path to future goals, which picked ‘Focus and

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Transform’ as its key strategic pillars for growth, achieved by identifying and then aligning with customer needs and expectations.

Gareth Howell, former executive managing director of AXA Retail, says the organisation doesn’t perceive technological advancements as threats, but as opportunities for the insurance industry to adapt and evolve while remaining true to its role as an instrument of economic and social stability.

“The new technology brings an opportunity for us to be more individualised, more personalised, in how we serve our customers, be they individual customers or large companies,” he says. “Insurance has a history of taking a one-size-fits-all approach. Technology could enable us, in a more automated, seamless fashion, to truly reflect an individual customer’s requirements for a particular insurance service or proposition. It’s a fantastic opportunity and I think that’s where we’ll see the

Insurance has a history of taking a one-size-fits-all approach. Technology could enable us to truly reflect individual requirements industry focus over the next few years, creating that individualisation.”

For the past three decades, AXA has specialised in insuring personal property such as cars and homes, and personal and professional liabilities, as well as providing tailored assistance for large corporate clients with a focus on marine and aviation. Age and size – Axa is the world’s second largest financial services

company by revenue – clearly hasn’t slowed it down. Instead, it has emerged as an agile leader in the insurtech race by proactively reaching out to partner with new-age businesses and technologies.

Redefining how the industry works by introducing Cloud, digital and blockchain, can happen only through meaningful collaborations ‘to unlock the potential that exists and accelerate transformation‘, says Howell. Target companies can be both inside and outside of insurance.

Tie-ups in tech In 2016, AXA took a pioneering step in that direction when it launched the UK’s first ‘on demand’ insurance cover through a partnership with Silicon Valley technology startup, Trōv. Through the Trōv mobile app, consumers were able to upload items to their Cloud-based inventory and purchase individual insurance. They had complete control and decision-making power over items to insure, period of coverage, etc.

In February 2018, AXA designed a path-breaking car insurance product and offered it through Brolly, an insurtech startup that uses artificial intelligence.

The new product included a cover for replacement keys and locks as well as windscreen repairs, supported by a 24-hour claims helpline.

Two months later, AXA came up with another innovative insurance product targeting vehicle owners who drive fewer than 7,000 miles a year. For this, AXA partnered with By Miles to offer the UK’s first real-time, pay-by-the-mile car insurance policy, which allowed drivers to forego hefty annual premiums and instead pay a lower fixed amount to cover non-driving risks, based on the actual miles driven, as recorded by a blackbox device known as a Miles Tracker. Drivers can access the cost of each trip by using a smartphone app. www.fintech.finance

By zeroing in on such technology partners, AXA has three core things in mind, says Howell – all worth noting if you’re a technology David looking to approach the Goliath.

“One is about the partner having clarity over its customer proposition and its relevance to our customers, be they personal or commercial. There needs to be an immediate relevance to some of the challenges and opportunities we face,” he says.

Secondly, AXA looks out for an inspiring team in the context of what they are trying to create or deliver, or as Howell puts it: “We’re looking for a group of people who’ve got a real focus and energy around the pursuit of that product or dream.”

Finally, AXA wants to see focus, energy and clarity about a potential partnership with AXA and what the organisation wants to get out of it, because: ”There are many insurtech companies that wouldn’t see it as part of their natural evolution to partner with large incumbent firms; they don’t understand the real opportunity or accelerator that would give them.”

Howell adds: “With those three things, it narrows down the field of opportunity and enables us to focus on developing partnerships and arrangements with the www.fintech.finance

ones where we think there’s going to be the most win from our perspective.”

Notwithstanding all this innovation, Howell believes the key to the future of insurance is staying true to its past. Fundamentally, that is in enabling corporations and individuals to carry on their lives by indemnifying risk. It began with sailing ships; today, it’s driverless cars. Tomorrow, who knows? But to be able to continue pushing the growth envelope, Howell believes that companies like AXA must continue to actively seek out and partner with startups that are finding digital solutions to everyday problems. From the customer perspective, this means creating smaller, more accessible and easy-to-pick insurance products that do away with tower blocks of paperwork and legal obfuscation.

Howell believes AXA is demonstrating how insurance companies can use

On a digital sprint: AXA is not just reimagining the future of insurance, it’s defining it

technology to serve the future community and foster that growth; to protect the tangible and the intangible.

But that still leaves some big questions.

“How do we embrace what our future societal role is, making it deliverable for everybody?” he says. “How can we be a thought leader and a contributor to making things like driverless cars become reality, because it’s not just the technology that needs to happen, it’s the associated policy, or infrastructure, and legislation changes that need to come with it, all of which we can be a part of.

“It’s also about how we can evolve from just being a payer of claims to being a partner of customers.”

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Giant steps

Roused by stones flung by disruptive Davids, insurance Goliath Allianz is beginning to flex its muscles in new insurtech markets, as CEO Jacques Richier explains

In contrast to the agile and dynamic technology startups that are disrupting financial industries, incumbent companies find themselves described in unflattering, lumbering terms. They’re the ‘dinosaurs’ around which the fintech challengers run in teasing circles.

Jacques Richier, the CEO of French insurance giant Allianz France, would even agree with that.

“It’s a David and Goliath situation.

We’ve been sleeping on our data and these new disrupters are a wake-up call for us,” he says.

The insurance sector has certainly taken a severe clunk to the head from a startup-flung stone. US-based disruptor Trōv, for example, is re-imagining insurance, offering a new generation of hyper-personal consumer journeys and convenience that is all very different to what traditional insurers like Allianz have offered in the past. Is Richier resentful?

No. “We should feel humbled and proud that our industry is changing in exciting new ways,” he says.

During last year‘s Paris Fintech Forum insurtech panel, the founder and CEO of Trōv, Scott Walchek, discussed his company’s metric of ‘protected days’ – a revolutionary new way to provide insurance. In simple terms, it’s micro-protection through on-demand, single-item cover accessed through an app and purchased by the day, with underwriting instantly automated through data. It’s a far cry from the year-long units of insurance that have been the industry standard for more than a century.

“The standard is no longer what your traditional competitor is doing,” says Richier, who also featured on the panel.

“We have to raise our standard in terms of client experience, as clients expect from us what they would expect from

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technology-based, digital-native startups.

“Size was effective in competing with the traditional insurers, but it’s not enough today. It’s a handicap if we are not capable of moving fast enough.

We’re slow, but we do move,” he insists.

The cogs have definitely begun to turn in the Allianz machine – an organisation that’s already the world’s leading insurer for properties, people and travel, with 85 million customers across more than 70 countries.

“In the particular case of Allianz France, you have a deep and profound culture,” says Richier. “We need to change that culture quickly – and that includes among the population of the company.”

As such, 80 per cent of new hires at Allianz are under 35 years of age. They understand the Millennial generation.

“Those in the new generation do not necessarily own a car or an apartment.

Size was effective in competing with the traditional insurers, but not any more. It’s a handicap They have mobile phones and they want to transact through them – whether it’s on Airbnb, BlaBlaCar, or whatever,” explains Richier. “They want on-demand insurance, which is not our traditional business. So, it’s a case of changing our model.”

There’s evidence of that already happening in the broad, powerful silhouette of Allianz standing behind a bunch of exciting new digital ventures across the world. Much of this diversified investment is driven by Allianz X – the group’s digital investment arm – whose motto is ‘we dare to change’.

Brave new models In 2017, Allianz X invested $96million into BIMA, the Stockholm and London-based insurtech that’s offering microinsurance to consumers in emerging markets, based on the predominant personal technology in these countries – a mobile phone.

Customers can pay for insurance via deduction of prepaid airtime credit.

An example of the benefits of a David-and-Goliath collaboration, it’s a completely new market for Allianz, which is valued at $40billion globally, and one it would ordinarily find difficult to service.

That’s because its legacy tech renders low-cost underwriting economically inefficient. But ,coupled with BIMA, which is operating in 14 countries with 24 million customers, Allianz can take a slice of that disruptive pie.

Allianz X is one strand of a strategy aimed at getting these giant limbs punching with all their weight.

“Allianz France is very open in terms of the type of collaboration we’ll enact in the future,” says Richier. “We must be pragmatic and build partnerships, which is a great opportunity for us to increase the speed of our transformation – and we’re working hard on that.”

Acknowledging what the panel at Paris Fintech Forum labelled the ‘perceived conflict of interest between client and insurer’ most destructive for incumbent companies, Allianz is also working on its image.

For example, it’s keen to promote the environment-saving benefits of its partnership with SightCall.

SightCall provides Allianz clients with a mobile app that enables live video assessments of property damage. As well as greatly improving convenience and faster claims settlement, SightCall is said to have already saved Allianz

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assessors from driving 6.3 million kilometres to check damages in person.

Then there is Allianz and Visa’s partnership, begun early in 2018, to create a secure mobile payments and loyalty app named Allianz Prime, with protection against fraud and defective, damaged or lost goods. Meanwhile, Allianz Global Corporate & Speciality’s collaboration with insurtech startup Flock provides on-demand, ‘pay-as-you-fly’ drone insurance that taps into a new and growing vehicle insurance category.

What’s clear from these disparate investments is that Allianz is no Gulliver, tied down by a hoard of tiny Lilliputians intent on seeing the giant’s demise. Instead, it’s a modernising and contemporarily-aware colossus that’s more than happy to share resources with startups that occupy, in some form, its insurance ecosystem.

“It’s important for us to be capable of working with new startups, especially in the field of data analytics,” says Richier. “We’re an industry of data and statistics. We used to know that, but maybe we forgot it.”

The disruptors have clearly jogged its memory.

“We have the data, we just need to discuss with them how they can help

improve our data knowledge and to use our data more efficiently. Some of them know our client better, some of them know our risks better, some of them concentrate on fraud. It’s very focussed.”

As with so many companies rocked by the tech revolution, it all comes back to data utilisation: how to fully realise the latent value that lies inside the deep chests of the incumbents. As Richier points out, it’s a slow process for those companies to update their legacy tech while refreshing an ethos developed over 125 years of servicing clients. But he offers a warning to the competitors: “We have begun to move.”

In Richier’s parting remarks, he reveals the true strategic urgency under which Allianz is operating. Having spent most of his career monitoring competitors like AXA, his

chief concern now is not so much the fintech Davids’ rock-slinging at this Goliath, but the inevitable clash of the titans that looms in the future between incumbent insurance providers – and who, exactly, will come out on top.

“The way I view it,” he says, “if we move faster than the other incumbents, we can grab a little more of the market. We need to understand the new trends, to be the first to offer on-demand and more collaborative insurance. We need to seize upon all the trends that promise growth.

We need to grab at those new opportunities, because the first one to do so will be the winner.”

The giant awakes: The insurance startups prodded it; now they work with Allianz France

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PARTNERSHIPS & TRANSFORMATIONS

Seeing the light: Banking Circle is applying frictionless payments technology to insurance

Lending a Banking Circle has already proved the efficacy of its model for fintechs, payments providers and banks. So, why not insurance? Why not indeed, says CEO Anders la Cour When the global banking services company, Banking Circle, decided to take a long, hard sideways look at the insurance industry’s payment processes, it made a number of astonishing discoveries.

Not only were 28 per cent of companies still using solely manual reconciliation methods, but the majority of the sector was chalking up reconciliation rates for matching receipts that were far short of the 100 per cent it aspired to – between 50 and 90 per cent in fact. And when you

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consider the size of the overall market, that means billions of pounds held up in the system; not good for cashflow, treasurers’ blood pressure, nor the customer, who’s looking for prompt, no-fuss service.

The subsequent Banking Circle White Paper, produced jointly with one of the UK’s leading industry titles, Insurance Post, and released in January, made the not unreasonable observation that ‘unless insurers can collect premiums effectively and pay out claims promptly, they risk

alienating customers and commercial partners and damaging their reputations’.

It’s not that the industry isn’t aware of the problem: only 19 per cent of responders graded their premium collection capability as ‘excellent’.

And when it comes to paying claims speedily, only 28 per cent felt able to put themselves into the top bracket. Onboarding new partners?

Only 15 per cent were completely satisfied with their performance in that department. www.fintech.finance

Banking Circle CEO Anders la Cour believes the insurance industry could benefit from highly automated reconciliation and cash flows in the same way that it’s eased the payments pain for companies in other financial sectors – including many Tier 2 banks, foreign currency payment providers and payment services providers – by offering a utility solution to their existing back office processes. All of them can help improve their customers’ cash flow through enhanced speed of settlement, while remaining fully compliant with financial regulation in multiple territories.

New sector, same old challenge The Denmark-based company has seen something of a meteoric rise. It was founded in 2013 with the aim of providing infrastructure to financial services wanting to speed up global transactions and initially focussed on the payments sector, before winning its first banking customers.

Having spent several years in development under the wing of Denmark’s Saxo Bank, it was acquired by Swedish investment group EQT in July of last year.

Banking Circle, which has offices in London and Luxembourg in addition to its Hellerup headquarters, has also recently

digitisation, according to a recent report

by EXL. By providing a utility infrastructure, Banking Circle could help take some friction out of the back office without a costly IT overhaul, freeing up resources for insurers to concentrate on transforming the rest of their business. In other words, Banking Circle can save them cost while they pursue growth.

“We have that tool set,” says la Cour.

“And we are keen to apply it to insurance because, having sorted out similar challenges for the financial tech industry, the payments industry and banks, we’re confident we can help.”

Its research showed that there are three categories of challenge experienced by the insurance industry. The first is compliance in a digital age, especially with so many insurance policies now being taken out online. The second is the need for more automated reconciliation within businesses. The third is speeding up settlement to same-day payment once a claim has been approved.

Premium collection is another key area where la Cour believes Banking Circle can help, eliminating the risk of manual error through the use of virtual IBANs, which allow companies to boost their service proposition by giving them access to

contrast, virtual IBANs avoid the need to have all collections flowing into a master account, where they need to be matched, reconciled and then paid on as necessary.”

Virtual IBANs allow a company to assign a separate account to each individual client or commercial partner. These IBANs then map to a master account, making it possible to create a full reconciliation engine and see what has been paid into the account and when it was received. In addition to receiving payments, virtual IBANs can execute payments and so any charges or commissions can be settled as necessary.

Consultancy company Accenture is already a fan. In a recent report, it noted: “Virtual IBANs are a mechanism to improve straight-through reconciliation of receivables for corporate clients. Under such an offering, a financial institution would open a series of dummy IBANs for its client.

Underlying each of these virtual IBANs is a real physical account (held in the bank’s ledger) to which the payments made to these virtual accounts are routed.

“Virtual accounts also offer improved credit control due to the availability of timely and accurate reconciliation of collection information, thereby delivering a clearer credit picture of customer accounts

We have the tool set and we are keen to apply it to insurance because, having sorted out similar challengers for the financial tech industry, payments industry and the banks, we’re confident we can help struck a deal with Chinese ecommerce giant Alibaba, as part of the latter’s bid to improve its payments business.

When it announced the acquisition, EQT said it would support Banking Circle’s accelerated growth strategy and help expand its product portfolio by giving it access to ‘both operational and financial resources to drive innovation and investments in technology development and talent acquisition’.

Entering the insurance sector, says la Cour, was an obvious next step.

“I think many of the challenges we identified a couple of years ago in the payment industry and among banks – the ability to do highly automated reconciliation and payment flows – also apply to the insurance industry,” he says.

Like banking, the sector is hampered by legacy systems. It also has something of a dog-in-the-manger culture when it comes to www.fintech.finance

international business bank accounts. By joining Banking Circle, companies can provide customers with multi-currency accounts, increasing the ease, speed and clarity of payments.

Virtual IBANs promise to allow insurance companies to deliver ‘fast and smooth’ reconciliation and a much higher, straight-through processing rate.

“Most collection and reconciliation systems rely on matching payments into and out of a master account using some form of referencing,” explains la Cour.

“In theory, this works if the references are always accurate, they are never omitted at any stage in the payment cycle and finance departments do not introduce errors manually. However, the research, as well as anecdotal evidence from the market, show this is not the case. In practice, all these issues are a daily drag on the efficiency and effectiveness of current systems. In

at both the individual and overall level.”

The value Banking Circle can bring to insurtechs and their clients is threefold, says la Cour.

“First of all, the insurtech business will be able to deliver a solution with their own tech layer and reconciliation module, that makes it easy and frictionless to do the reconciliation for the insurance business.

“Second, they’ll be able to deliver probably much faster pay-ins and payouts.

And third, they could eliminate the need for direct debits and increase their level of automated transactions handled by the insurance business.”

As a utility provider, Banking Circle’s philosophy is to never compete with its clients. Instead, it sees itself as providing the background infrastructure to support financial services, including, now, insurers.

“We are simply there to make sure that they can grow their business,” says la Cour.

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PARTNERSHIPS & TRANSFORMATION

PluggingintoPSD2 PSD2 Avaloq’s timely addition to its core banking services could offer insurtechs a golden opportunity to scale, says Product Manager Esther Kaufmann Core banking software provider Avaloq’s decision to double the size of its London office in January this year was not only a vote of confidence in the city’s continuing status as a global financial hub, but also an indication of the appetite for the company’s latest offering.

Late 2018 saw it launch a suite of services geared towards making it easy for banks to become compliant with the revised Payment Services Directive (PSD2), essentially by taking the sweat out of ensuring their application programming interfaces (APIs) were ready for testing by and integration with third party providers (TPPs).

In response to demand from its banking and wealth management clients, Avaloq's application programming interface (API)-based PSD2 software technology enables banks to install and run their IT infrastructure and applications on their premises. Or, they can opt for the software as a service (SaaS) option and have Avaloq run both the software and their PSD2 infrastructure for them. Integral to this new approach is avaloq.one, the platform to enable a marketplace that simultaneously solves the banks’ PSD2-related dilemma of how they avoid being disintermediated by TPPs, while also giving those same third parties – many of them startups – a single portal through which to present their apps to some of the biggest and most influential financial institutions in the world. Avaloq’s banking and wealth management customers can select apps that it has tested – and, through its developer community, even helped to create – and offer them to their clients through their own interfaces.

In effect, it creates a double marketplace – one B2B, one B2C. So, what’s this got to do with insurance?

Plenty, says Avaloq’s product manager Esther Kaufmann.

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Take Vlot, one insurtech whose product will be available via avaloq.one.

Like Avaloq, it’s based in Zurich, from where it offers customers tailored and transparent life risk insurance, based on a free analysis. It also offers guidance as to when it makes sense to adjust cover according to a life event; analyses existing cover from relevant social security systems and pension funds; and has the functionality to consider the status of both an individual or an entire household.

Working with a digital platform such as avaloq.one is a crucial part of Vlot’s business, particularly in terms of scalability, according to company COO and co-founder Daniel Schmidheiny. As Avaloq’s core banking system is widely distributed across the Swiss market, and also used in Europe and elsewhere,

I think PSD2 is a great opportunity for the insurance industry because it creates transparency and innovation based on that transparency reaching 150 banks, building links with the platform has proved key to expanding Vlot’s business and connections.

Plugging into Avaloq’s core banking system has spared Vlot from having to talk to every bank individually, saving time, Schmidheiny adds. And at least it means they will not turn away Vlot, or indeed other insurtechs, for fear of them being too complicated to integrate into their existing systems.

“By plugging [our system] into the core – be that on the core banking level, or maybe the ebanking level – it gives us

just one partner to talk to, the technology,” says Schmidheiny. “We can scale into different banks from there. We can actually match different insurance companies, different insurance products, with different banks and their different needs, through one plug-in.”

Overall, working with Avaloq has given Vlot a massive leg-up in the market and the company is thankful to have it as a partner, says Schmidheiny. There’s plenty of opportunity for others, perhaps climbing different verticals in personal and business insurance, to join it.

Avaloq’s aim is to be a leading new financial ecosystem for financial services.

Central to that is offering developers a sandbox to test their solutions and improve system integration via open application programming interfaces (APIs). These solutions can then be made available to all Avaloq’s banking suite clients. This means that any TPP whose solution is listed on the avaloq.one marketplace gets access to potentially millions of individual customers, immediately boosting its global reach and market potential through just one integration.

Third-party solutions, such as Vlot, are only made available as part of Avaloq’s ecosystem once they have been rigorously tested by the company itself.

As such, insurtechs and other financial services startups also get a reputational and quality assurance boost from having been selected by Avaloq, which itself is trusted by trusted entities, such as banks. At the same time, banks and wealth managers can expand their product offering and in considerably less time than through their own, more traditional, development channels.

Kaufmann describes PSD2 as offering a ‘great opportunity’ for insurers to create ‘highly personalised, customer-specific and also channel-specific products’. After

www.fintech.finance

all, the moments when people actually buy insurance cover are rare and tend to be triggered by major life events, such as getting married, buying a house or having a baby.

“You buy insurance when you actually need it, but then you want it instantly and conveniently,” she says. Cooperation between banks and insurers – mandated

by PSD2 and facilitated by the Avaloq ecosystem – could help identify, capture and capitalise on these rare occasions.

“I think PSD2 is a great opportunity for the insurance industry because it creates transparency and innovation based on that transparency,” says Kaufmann. “The opportunity lies in highly personalised, client-specific, and even channel-specific, insurance products and offerings.

The potential is in enhanced sales performance and cross-selling.

“This also creates value for the end customer because customers want cheap, convenient, simple and useful insurance covers.”

Kaufmann gives the illustration of a customer who has already granted their insurer access to their banking data, who goes to buy a laptop online.

“Once the banking client has given her consent, then you as an insurance company have access to her payment transaction

data, which you can analyse, and if that shows she has just bought a new computer for €2,000, you can instantly offer cover for it. In this way, the customer receives tailored, relevant insurance.”

Because this is achieved through her banking portal, the bank is seen to be offering a ‘holistic financial service approach beyond traditional banking’, says Kaufmann. The customer gets precisely what she needs when she needs it, with minimum effort. “What better for the customer than having everything in one portal or one shop?” adds Kaufmann.

A winning solution Avaloq already has a presence in major financial and innovation centres across the globe, including London, Berlin, Frankfurt, Luxembourg, Madrid, Paris, Hong Kong, Singapore and Sydney. And the company’s ecosystem approach is certainly getting some recognition.

Last October, Avaloq won the Best of Show award at FinovateAsia in Hong Kong, where 20 or so other leading fintech companies got the chance to demonstrate their tools in front of an audience of industry experts. Here, regional product manager Stewart Chen and head of digital strategy and innovation Bodo Grauer

outlined the workings of the avaloq.one ecosystem and how fintech startups and major financial institutions can work together to build an innovative experience for their customers.

“With avaloq.one, we’re creating a win situation for everyone in the ecosystem,” Grauer told the crowd in Hong Kong.

“You, as a fintech, integrate once, reach hundreds of banks, millions of clients.

You, as a bank, achieve a much faster time-to-market for innovation. And you, as a client, can now customise your personal banking experience.”

Avaloq was one of three companies selected by the FinovateAsia audience to win the prestigious accolade, with experts praising it for providing seamless access to fintech solutions via a double marketplace. Juerg Hunziker, CEO of Avaloq Group, at the time hailed the win as ‘another important milestone’ on the company’s innovation journey.

It’s one any insurtech out there might do well to join it on.

Plug and play: Insurtechs selected for the avaloq.one marketplace only have to integrate once

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11:FS BEST OF INSURTECH INSIDER

INSURTECH INSIDER: BOLDLY GOING FORTH! 11:FS, the challenger firm defining and building digitally native financial services, was among the first to identify a new protostar pulsing in the FS universe: insurtech.

In its regular Insurtech Insider podcast, 11:FS hosts Nigel Walsh and Sarah Kocianski boldly go in search of potential supernovas, exploring the far reaches of the digital galaxy for all types of cover, including life (but not as we know it, Jim).

Worlds collide in this first edition of The Insurtech Magazine as three expert explorers join them to probe the upwardly mobile market for sports insurance and ask why insuring art and collectables defies the gravitational pull of digital.

Tobias Taupitz Founder and Chief Executive Officer of Laka Taupitz is less an astronaut and more an alien in the world of insurance. He’s on record as saying it’s ‘difficult to design a business model more one-sided… collecting money from customers first, using it to generate investment income, and only later, after a rigorous process, providing an actual service in paying out a claim’. So, with Laka he stood the model on its head. Of all the travellers on the 11:FS shuttle, he’s the most comfortable travelling upside down.

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www.fintech.finance

James Garthwaite Underwriter for Fine Art & European Household with Hiscox Garthwaite is unlikely to be fazed by anything he meets on this journey into the outer reaches of the insurance space.

This, after all, is the man who underwrote the insurance for a Danish Bog Body – an Iron Age mummy back from the dead. If that didn’t weird him out, nothing will.

Luke Mullett Account Executive, Commercial & Private Fine Art Risks, CBC Partnership Mullett is used to treading carefully in rarified atmospheres. In his day job you’ll regularly find him rubbing shoulders with the super-rich, assessing their assets and weighing up their risks.

Such clients demand absolute trust and discretion, which makes him an ideal co-pilot on this mission, where you need to rely on expert judgment.

www.fintech.finance

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11:FS BEST OF INSURTECH SEOREHREPINSIDER US SF11

In 2017, McKinsey predicted that ‘while insurtechs have not yet made deep inroads into the sector, they are growing fast and stand to capture a meaningful share of value pools within a few years’. Encouraged by some regulators, including the UK’s Financial Conduct Authority, insurtech is now carving highways across the insurance map… at least, in most segments.

But as 11:FS Insurtech Insider hosts Nigel Walsh and Sarah Kocianski discovered in two recent episodes, while some channels are ripe for disruption, others are harder to penetrate…

SportsInsurance Tobias Taupitz wasn’t just interested in creating a better bike insurance product when he launched Laka in 2018; he wanted to change the gears when it came to how insurance is written.

His peer-to-peer model dispenses with upfront premiums, instead splitting the cost of claims every month across the risk pool, aka Laka members, who are billed accordingly. After almost a year of trading, Laka claims to have saved them around 70 per cent of what they could have expect to pay using traditional insurance channels.

Here he explains how he did it.

SARAH KOCIANSKI: What exactly does Laka do and how much interest is there in this type of insurance?

TOBIAS TAUPITZ: We call it ‘crowd insurance’, powered by the community – our risk pool, the customers. Our first use case is cover for high-value bicycles against theft, damage and loss. We group all our cyclists together and forgo the need for upfront premiums. Instead, we split the cost of claims at the end of the month, plus a small fee for us, across the risk pool.

While we share the actual cost of claims, if every single bike was stolen, customers wouldn’t pay more in a month than the advertised cap provided by our underwriters, Zurich Insurance Group.

Because we’re paying out first, collecting money afterwards, payment default, or credit risk, is our biggest threat. But what we have is full transparency; we can show what we are charging for and, hopefully, provide better customer experience.

SK: So, you’ve hit on a huge trend in cycling and people who are passionate about it; that’s key to your model?

TT: Absolutely, cycling has overtaken golf as a recreational sport; it’s a clear trend, and we are promoting that because I think it www.fintech.finance

has to be about more than providing a pure insurance experience. We are trying to engage with the community, creating content, being part of events, sponsoring them and even organising them.

As with any niche, you can break it down into sub-niches, personas and types. There is not just the road biker but also, for example, the mountain biker and the ebiker (electric biker), which is growing heavily in the UK. We have £3k, £4k and even £5k bikes on our platform. People take better care of them and fewer claims happen.

Another interesting trend for us is cargo bikes – for food catering, for instance. That’s something that’s been neglected and, while it’s smaller volumes, if you can grab market share, you can build a name there.

SK: You use geolocation, connectivity and application programming interfaces (APIs). Can you tell us a little about that?

TT: The traditional risk parameter in home insurance is underwriting by postcode, which we believe is no longer fit for purpose. If you live in a good area but never lock your bike, you are a worse risk to me than living in a bad area and taking very good care of it. So we have a very strong behavioural risk play, which uses Strava [a social fitness network and GPS tracker platform] that we can link into, with customer consent, using an API, as well as social media, to demonstrate that someone is an avid cyclist. Sportives and races are a big part of the road biker’s life; training for them on Sunday, going out early. They’re very ambitious people in our risk pool.

Clearly, the risk increases with racing but Strava allows us to mitigate that enhanced risk that another customer might not have.

We also educate our customers to help them become better risks. For instance, we tell them the risk of having your bike nicked in a semi-private carpark is five times higher than on the street, because

thieves have more time to crack the lock.

Lastly, we use GPS tracking. If we fit tracking equipment to the saddle or the tube, it could really help drive prices down.

NIGEL WALSH: The problem with home insurance policies is that generally they don’t cover you for anything over £1,000, unless you add it as a named item. Most serious cyclists have kit that’s worth way more than that.

TT: Our products start at £1,000 for that very reason. The value is one thing, the extent of cover is another. One home insurance provider only covered the bike being used in a five mile radius from the policyholder’s home! Also, home insurance covers your bike at home for theft, when our risk pool indicates that roughly 10 per cent is theft and 90 per cent is damage.

NW: The same goes for holiday insurance.

It captures the basics, but not the new experiences you want to try when you go on holiday, like ski biking, right?

TT: We’re doing research on holiday insurance at the moment. It took us a while to get a licence, to get the platform up and running, to find partners and convince regulators. But, having proven the product works, now is the time to start branching out. We inherently have a deep interest in products that are community-oriented, where people have a passion but need an instrument for it. So, any sports instrument is fair game, whether it’s golfing, fishing, rowing, canoeing, water sports. Very quickly the next question is ‘when will you go to mass markets?’. The honest answer is ‘why should I?’.

We are doing a good job on niches, and if you add enough niches and start cross-selling, that will be enough crumbs for a startup like us to grow big and profitable.

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11FS SUPERHEROES 11:FS BEST OF INSURTECH INSIDER

ArtInsurance

Individuals with vast private wealth tend to demand discretion. Driving down premiums through data sharing is of no interest to them; neither, generally, is speed of execution. So, where can tech help art insurance? That’s the question Sarah Kocianski posed to James Garthwaite of Hiscox and Luke Mullett from CBC Partnership as she entered a rarified, sometimes weird world of high net worth clients.

SK: Can we start with you both telling me what fine art includes?

JG: The definition that we work off is broadly anything that’s collectible and has a value. Probably the most unusual thing I’ve been asked to cover was a Danish mummy that had been preserved from the Iron Age – a Danish bog body. Apparently, quite a lot of these have been found over the years, and this was one of the better-preserved examples. I’ve also been asked to cover artworks that are partly comprised of organic matter – animal and meat products. That gets a bit weird as well.

LM: It’s everything from stamp collections to old letters, correspondence, books and cars.

I had one client who called me and said ‘I’d like to insure my Ferrari’, which you’d assume would be more suited to a motor policy, but it transpired that he owned Michael Schumacher’s Formula One-winning Ferrari, and wanted to install it in his house.

SK: So how much is this market worth?

JG: Every premium coded through the Fine Art Lloyd’s Risk Code would amount to about £160million. It’s difficult to estimate beyond that because a lot of fine art is rolled into larger property risk placements. So, it’s a niche but still pretty big market. What I do know is there is more opportunity out there.

SK: How do you decide if something you own needs a specialist insurance policy?

LM: Standard household policies don’t make too many provisions for what we would consider a fine art or collectible item.

With serious values, you need a product designed for what you’re insuring. There are

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areas of cover that pertain to fine art, such as defective title and depreciation in value, which a specialist policy is designed to meet. The real criteria, for me, is what do you need the cover for? What’s likely to happen to it? And is there a policy out there that somebody’s written that can respond to it? An all-risks policy, for instance, would cover anything from somebody dropping it, to domestic staff not realising what they’re cleaning – that’s more common than you’d think.

JG: On our broadest wordings, the only exclusions we really have are wear and tear, which is not something you can really insure against, and inherent vice – such as you insure an ice sculpture and it melts!

SK: Are these clients using technology, such as sensors, to reduce the risks?

JG: One of the challenges with this sector is that, while the technology has come a long way, a lot of our private clients haven’t been able to, or have chosen not to benefit from that. We insure lots of stately homes and similar properties where the infrastructure is pretty out of date.

LM: The problem is, if you’re talking about somebody with a Grade I or a Grade II listed home, the hoops they have to jump through to make any changes to it means a lot of work and, in some instances, it could be prohibitively expensive. Where technology does help is in phone apps that access your alarm or CCTV. SK: Can you give us an insight into how you assess for this type of insurance, then?

LM: So, James and I might work together to secure a client. As the broker, I am facing the client with a list of questions and information that I need at an early stage to present to James, so he can weigh up what he’s looking at, apply some rates and give me some pricings. The key things I’m looking for are physical securities – locks on doors and windows, accessible skylights, alarm systems – and asking if there is a disaster recovery plan in place where, for example, if a fire is discovered, you can get the most valuable pieces out.

JG: We don’t really work on the basis of gradings or discounts, because the

difference with fine art being a niche area is that it’s not a homogenous class of business. It might sound old-fashioned, but when we look at the risks and the physical security, we also look for clients who are generally rich, honest and careful.

That’s really our pricing philosophy.

SK: Could technology at least help in the area of valuation?

LM: Not in terms of agreeing values and setting the values because they’re governed by the market. And there are other things that will have an impact, such as the death of an artist when you can see values immediately increase. I have, though, seen companies that are designing applications and models for inventories.

JG: That’s probably where a real opportunity exists. If one technology leader comes out as having established the best inventory system on the market and they partner with an insurer, the process could be streamlined: if you as a private client were able to update your inventory and that automatically fed through to your broker or insurer and you could pay your premium accordingly. But that has to be a whole lot better than the trusted Excel document, which we all use day in, day out.

LM: Let’s not forget you’re dealing with people’s valuable assets. And a lot of these people are particularly private. If you have a client who flies under the radar, are they going to want to give you a lot of data? If there’s a product out there that can guarantee this level of discretion then these products could move forward.

JG: In terms of the distribution of fine art policies, that’s very challenging because there’s no silver bullet in targeting all these HNW individuals because they all deal with different family offices and there are all sorts of bizarre networks through which they operate, some of which are pretty well-established. Having said all that, Hiscox has worked on one product where pricing is done by a model – a click-and-buy product that’s really for targeting smaller customers who might be more homogenous than the larger ones.

The product’s called Hiscoxcollections.com.

It’s still in its infancy, but it’s an exciting new area for us. www.fintech.finance

Digital transformation for today’s challenging landscape

Our customers tell us that they need to use transformative digital strategies to remain relevant in today’s challenging financial landscape. Strategies that will allow them to improve operational control, reduce costs, build new revenue streams, mitigate risk and comply accurately with regulation.

To help you make the journey towards digital transformation, we provide a range of solutions for the transaction lifecycle. AI and Blockchain technologies are now embedded in all of our solutions, which are also available in a variety of deployment models.

Digital transformation. Reaching the summit just got a little easier.

DISTRIBUTION

Revamping the insurance distribution model At this year’s Parish Fintech Forum, The Insurance Magazine’s Editor in Chief Ali Paterson led a panel discussion that revealed how far channels have changed… and how far they’ve got to go Aggregator sites such as comparethemarket.com with its famous meerkat brand have had a major impact on the insurance distribution model over the past 10 years, paving the way for insurtechs to disrupt it even further.

The McKinsey report, Insurtech – The Threat That Inspires (2017), showed that the majority of insurtechs (37 per cent) were playing an active part in product distribution compared with 23

Our panellists

Christian Wiens, Co-Founder and CEO of GetSafe

The Germany-based innovator GetSafe badges itself as ‘insurance to go’.

It offers ‘flexible and customisable’ cover through your phone – everything from dental protection to drone liability – with a ‘five-minute’ application process and instant claims via its smart app.

GetSafe isn’t Wiens’ first experience of tech platforms. In 2011, he created one for making restaurant reservations, called Gourmeo.

Most admired company: N26 ‘a good playbook for insurance and what can happen in the industry’ Last bought insurance from: Dental insurance from Getsafe

Tim Kunde, Co-Founder and Co-CEO of Friendsurance Adopting a peer-to-peer insurance model, Friendsurance overcomes the resentment many of us

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per cent, the next biggest focus, concerned with pricing. Of those involved in distribution, 75 per cent were enablers, helping to make products easier to understand and purchase for customers.

At the recent Paris Fintech Forum, we drilled down even further, with a panel representing both the intermediary and direct areas of the market to explore about the ‘what?’, the ‘how?’ and the ‘wished-for’ in the new distribution trend.

feel at paying premiums year after year without seeing any benefit. It rewards customers with a cashback bonus if they don’t call on their policies.

Prior to creating Friendsurance, Kunde was CEO of JT Internet, having started his career at Boston Consulting.

Most admired company: Games developer Wooga ‘for creating something of substance in a really challenging space’ Last bought insurance from: Life insurance from Friendsurance

Romana Ibrahim, Co-Founder and CEO of KeepWarranty KeepWarranty says what it does on the tin, storing receipts so they’re to hand when you need to provide proof of purchase and storing and organising warranties, warning you when they are about to expire. It was founded by Portuguese serial entrepreneur Ibrahim, who saw a gap in the market for a simple to use, free app.

Ibrahim, who has previously been involved in mainly FMCG and business

intelligence businesses, was elected ‘Founder of the Year’ in 2018 by Portuguese Women in Tech.

Most admired company: Amazon ‘because it’s really customer driven’ Last bought insurance from: KeepWarranty, to test some new services

Phoebe Hugh, Founder and CEO of Brolly The London-based personal insurance app Brolly uses artificial intelligence to help users search for and buy insurance policies before storing them in one convenient solution.

Hugh was listed in the Forbes 30 Under 30 Class of 2019. She is a board member of the Insurtech Delivery Panel, co-founder and director of Ambition First and Entrepreneur in Residence at Entrepreneur First.

Most admired company: WhatsApp, ‘for building a simple product used by 20 per cent of the world’s population with a really lean team’.

Last bought insurance from: Brolly

www.fintech.finance

ALI PATERSON: In a world where customers – particularly in the B2C space – increasingly shop around for the best deal via brokers and comparison sites, does the brand matter?

ROMANA IBRAHIM: The most important thing isn’t brand but how we make customers’ lives easier. It’s having everything aggregated, then making sure each company communicates with its customer in a very personalised way.

TIM KUNDE: As a broker, I can absolutely say that brand does play a role. But it depends on age, demographic and so forth, whether you attach value to that or not. Friendinsurance started life as an experimental company with a peer-to-peer approach and there was a conversion difference depending on whether we said ‘you’re gonna do this with a big brand’ or ‘you’re gonna do this with us’. I think brand plays a role more in the purchase decision; its power of retention is diminishing, which is definitely difficult, even dangerous, for the big brands.

ALI PATERSON: Is the brand relationship shifting to the intermediaries, then, who are developing neat new portals for both purchasing and storing insurance policies?

CHRISTIAN WIENS: We started as a broker and so I can speak from both sides of the table. I’m super emotional about brands but not everybody is.

What we’re doing now, acting as an insurance company, not as a broker, is building products that young people buy.

Our average customer is 28 years old and we have a peak at 26, mostly graduates.

We go out to all the universities in Germany and they buy insurance with us for the first time. They have no negative or positive expectation [of insurance] and

I think they are able to build an emotional brand relationship with us if we give them an experience that’s worth it. That means having a companion on your phone that talks your language and that kind of stuff.

So, it is feasible in insurance and everybody should want it, because that’s what drives the most successful companies in the world. Take a brand like Apple, creating that kind of huge value should be the goal of every company.

getting people caught out on exclusions, and for this reason I hold insurance in the lowest possible regard, down there with tobacco salespeople and arms dealers’.

That really stuck with me because people feel, when they come to purchasing insurance, that they’re buying something with a blindfold on because they don’t know what’s gonna happen at the point of a claim, and I think that’s the biggest issue in insurance:

PHOEBE HUGH: We ask our customers quite regularly ‘what would you improve about insurance?’ and there was one comment that just stuck out for me. The customer said ‘the model of insurance is to rake in as many premiums as you can, and then pay out as little on claims, by

that the goals of the customer often don’t get met when they need it, and it’s that moment, when something goes wrong, when they realise they don’t have the policy they need.

It’s entirely possible to build a loved consumer brand in insurance, that you have a regular relationship with, and we have with our customers. We consolidate their insurance portfolio and we communicate with them regularly, so our retention rate is really high and we’re building the trusted relationship.

People buy into brands they trust and insurance is an industry that’s founded on trust, so it has to be there. Some of the most successful brands in insurance, companies like Hiscox, have at the very core of their philosophy that they pay out on claims and look after their client.

The brand is dead Long live the brand!

Young people have no negative or positive expectation [of insurance] and are able to build an emotional brand relationship with us

Christian Wiens

Brand recognition: It is perfectly possible to build it in insurance

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The insurance service now waiting on platform…

ALI PATERSON: What’s your view on your current distribution model, when it comes to paying out and acquiring new customers?

PHOEBE HUGH: When customers come to us, we find all of their existing and past insurance policies through them connecting their email inbox or forwarding policies to us. We’ve about 800 different insurance companies that customers have purchased from, managed through the platform. We build the relationship then because we’re holding the renewal dates, the premiums and the policy documents, it’s at the renewal point that we convert them to buying through Brolly and then partner with insurance companies, in the UK market, for various different product lines. We work closely with the insurer to make sure what the customer is buying is actually what they need.

ALI PATERSON: Do you think that the platform is a good distribution model for the future?

TIM KUNDE: Yes, the whole idea of connecting in ecosystems and platforms makes a lot of sense. We come from B2C so we have a brand in Germany, as a

broker, where we, through various channels, get people onto our platform and then advise them on insurance.

We also help them to optimise or sell insurance. And that works nicely, but we have this whole platform sitting there and then we say ‘can we leverage that into bigger ecosystems?’.

So, in Germany, we’re working with Deutsche Bank and others and wrapping our service around ecosystems or platforms, especially in banking, where it makes a lot of sense to say ‘we have this customer relationship, we have this data, we know we can digitise the customer’s portfolio, we can detect all sorts of relevant payments and events that go through the bank’. And then we can pop our service on top of that to get closer to the vision of reaching as many people as possible, and helping them to organise their insurance.

CHRISTIAN WIENS: We have another vision, which is to have the insurance app that you keep the longest, for your life, on your smartphone. Because I think insurance is the industry, compared to all the other apps you see on your smartphone today, that you probably would have the longest relationship with. That’s the opportunity we have and why, for me, it is so important

Insurance and reinsurance companies are not connected with their customers anymore; they don’t know who they are or how to get to them – Romana Ibrahim

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to have a direct relationship, to build a lot of non-insurance features and services around all the kind of important things that are being insured.

ROMANA IBRAHIM: At KeepWarranty we have two sides we are exploring.

On one side, we have KeepWarranty as a solution, with warranties that people upload in our app and we suggest insurances as a service. On the other side, we have KeepWarranty partnerships, where we work with big insurance and reinsurance companies on their big pain points. One of the biggest is the way that they are not connected with their customers anymore; they don’t know who their customers are or how to get to them. KeepWarranty works out a digital solution for them in a very customised way, to bring to the market new features that help them, and new services that make sense to their customers.

PHOEBE HUGH: Some platforms are bringing a lot of products to their customer base, but what’s lacking is depth, in terms of what they are trying to solve. The problem is that people are buying the wrong things, they are not understanding and making informed decisions about the products they’re purchasing, and that’s not solved by just finding other ways of selling them the same thing, again and again, through different distribution channels.

So we have to go deeper and address the product issues.

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DISTRIBUTION

Failfast, succeedfaster ALI PATERSON: Now to my favourite subject, which is failure! Because I think, the more things people try that go wrong, the more cool stuff starts to happen. What are the biggest failures you’ve seen, and what’s been learned?

CHRISTIAN WIENS: What we found is that if you don’t change things enough, if you make insurance digitally buyable as we tried to do – very superficially – that doesn’t really change the needle.

Of course, you can buy it a bit quicker, but insurance is super long term and what you really need to think about is what happens in the next 10 or 20 years.

How is the relationship evolving? Where do I have touchpoints?

Why should the person refer me to a friend?

We The only way is up: If startups learn from their mistakes

failed in doing this and are now changing.

TIM KUNDE: We started out as a peer-to-peer insurance platform, beautiful concept and global first, and we were really convinced of this concept and wanted to tell the world it would give them back control and transparency around their insurance.

It turned out, except for a couple of weirdos, people didn’t care. It didn’t help conversion rates, then we learned that, when we told people they could save up to 40 per cent, all of a sudden things worked quite smoothly. So we learned to really focus on the benefit for the consumer, which is very boring, straightforward things like saving money.

PHOEBE HUGH: Price comparison is dead, or should be dead. We have even learned that customers don’t know how to make those kinds of

decisions. We need to stop thinking that customers are suddenly going to be financially educated enough to be able to make complex financial decisions and accept that machines and robots can do that in a far superior way. So we are focussed on trying to automate as much as possible, with customer decision making consolidated into a single, holistic insurance product.

We’re moving away from thinking about home, car and travel insurance to more ‘who are you?’, ‘what are your connections?’ and ‘what are the things you own?’.

We had a beautiful concept, a global first.

People didn't care – Tim Kunde

Thefutureofinsurance ALI PATERSON: So, what do you want the insurance model to be in five years’ time, in terms of how people buy it?

ROMANA IBRAHIM: As a consumer, I’d like to have a very direct line of connection so that it’s explained to me, in a very transparent way, exactly what I’m buying and what it’s for.

CHRISTIAN WIENS: It’s not about buying insurance, it’s engaging with the insurance, making it useful, over time, and using it. This will decide if you can have real substantial organic growth as a company or not.

TIM KUNDE: Our vision is fairly simple.

Just to make sure that the customer is always correctly insured. We don’t have any aspiration that the customer checks in on a daily basis to his/her insurance app, that doesn’t make sense. But we do aspire to understand, and be with customers, whenever things change; to detect, from bank transactions, for example that something important has happened. Then we want to make sure they can be covered, in a couple of clicks, so they can get on with his life.

PHOEBE HUGH: I imagine a world where

if people want insurance for a specific part of their life, then they get that insurance and it’s extremely accurately priced for the risk that they represent.

I think it’s consistent across the panel, that we just want people to be protected. Insurance is one of the most important financial products that a customer will ever buy and they should never be in a position where they’re not protected when they think that they are.

I think that that’s the future everyone wants.

Insurance is one of the most important financial products that a customer will ever buy and they should never be in a position where they’re not protected – Phoebe Hugh www.fintech.finance

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DISTRIBUTIONS

A tricky challenge: But offsetting speed and risk is not impossible

Striking a balance Increasing the speed of insurance transactions doesn’t have to mean raising the risk, says Melanie Tromba, COO (International) with Instanda We know the insurance sector is under stress as its traditional business model and marketing channels get disrupted on a daily basis. Incumbents aren’t short of ideas or the experience to execute them, but they often find it hard to respond quickly enough.

That’s where using a software as a service (SaaS) provider like Instanda can help make the most of their capabilities, says Melanie Tromba, the company’s COO (International).

It offers insurers, managing general agents (MGAs) and brokers a tool to build and distribute any insurance product, anywhere in the world, across any channel.

Its self-service delivery model is highly configurable and requires no IT skills, putting control in the hands of the user.

This means that companies, particularly those with large policy administration

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systems not suited to today’s dynamic markets, can bring products to point of sale in unprecedented, fast timescales.

In addition, existing books of business can be moved across and easily modified, as required, so that providers can improve customer experience while optimising the underwriting process.

Such SaaS technology could prove vital in boosting an industry that is often hindered by legacy systems that make innovation difficult. In 2017, Zurich UK used Instanda’s Cloud-based insurance platform to bring to market a small and medium enterprise (SME) product in a record 56 days. Teams could use the technology to configure sophisticated products with pace, while business users could make quick changes to prices, rates and question sets. The project was named E-trading Initiative of the Year in the 2017 Tech & Innovation Awards, while Instanda

and insurance innovation company Ninety were also highly commended in the Technology Partner of the Year insurer category.

The way in which insurance has traditionally been sold – through complex, multi-layered distribution channels – is consistently being disrupted by insurers looking to go to market more directly, and with more transparency. GoCompare’s annual switching report for 2018 showed that 28 per cent of people switched their car insurance last year, while 23 per cent changed their home insurance for the second year running. It observed that consumers had ‘increasingly cottoned on to the fact that loyalty doesn’t pay’.

If carriers can no longer rely on customers returning year after year, for the same off-the-shelf policy, they need instead to work with distributors, such as agents and brokers, to create www.fintech.finance

fit-for-purpose, customised products.

Tromba believes that insurers need to find a ‘delicate balance’ between three factors if they are to meet the challenges of today’s market.

“The traditional market is suffering from a soft rating environment, acquisition rates and growing operational costs,” she says. The problem is that these three factors are interrelated, but ‘almost contrary to each other’ when considering how to act on any of them.

“That's quite a delicate balance for carriers in a market where everyone is just looking for a better result,” adds Tromba.

It’s all in the data capture Any insurance-related company wanting to create digital solutions has to acquire the correct data for underwriting purposes while not hurting the customer journey. In other words, robust proposal forms will help underwriters assess risks better but can be offputting for users entering the information.

“Everybody wants speed behind the underwriting process,” says Tromba. “But can you really assess the risk and price it with limited information?”

This is where she believes Instanda’s software can help by enabling carriers to create a frictionless trade environment: “There’s speed to market, bespoking of products and acquisition of data.”

Perhaps top of that list is trying to convert enquiries into quotes as quickly as possible before potential customers lose the will to live. Instanda’s aim is to enrich customer data in such a way that the insurance buying experience is made faster and easier, without impacting the quality of the risk assessment.

The company claims to offer innovations in every layer of the insurance architecture, letting businesses and customers alike self manage all policy attributes with a full audit trail and within a governance framework that is flexible and dictated entirely by the insurance organisation.

But it’s not just the customer who benefits from a smoother process.

Another of the businesses Instanda has worked with is Spanish MGA Exsel. It used SaaS technology to distribute its products digitally and remove the intensive manual processes its brokers had long struggled with. Exsel sources its capacity from syndicates in the Lloyd’s www.fintech.finance

of London market and its authority as a MGA lets it quote and bind policies using the Instanda platform, so long as they are within the syndicate’s criteria. Instanda allows Exsel to create, build and manage products quickly and efficiently, with delegated authority from their carriers.

While Instanda has fundamentally changed how users can design and distribute their products, more could still be done with data, says Tromba.

Pricing analytics, segmentation and categorisation could help improve risk selection and pricing even further, she observes.

“It’s starting to become less of a burden for internal carriers to ramp up the tech and the tools that they need to do the analysis,” she says. “Now it’s a matter of building up the skill sets internally that can properly utilise these technologies.”

Pricing actuaries, distribution agents and markets can access this data through the Instanda system. It’s then up to them to ‘use the information and analytics out of the platform, build a performing portfolio and relationships with the

Everybody wants speed behind the underwriting process. But can you really assess the risk and price it with limited information? distribution channels and make sure the product is really fit for purpose’. It’s about product appropriateness as well as the rating.

Tromba believes that segmentation of risk profile data could also help companies with their operational expense ratio. “The key is identifying when a risk can be straight-through processed and when it can’t and pushing that boundary,” she says. “Straight through processing has obvious benefits to the bottom line. Any risks that do require a manual touch can then be routed to a human agent accordingly.

“So, it’s helping with the risk selection exercise. It’s trying to find the right path for a quote to follow.”

When it comes to analytics, Tromba describes it as a process of trial and error that’s about finding that ‘nugget of information in the data, or that one metric, or that one segmentation that’s really going to make the difference’.

Companies should see analytics as a continual learning exercise, rather than centre them around one specific proposition, she says, ‘because you don’t know which one is going to provide insight’.

The insurtech revolution Looking forward, Tromba thinks that insurtechs could have the same impact on the insurance industry that fintech companies had on banking. Insurance is notoriously complex but even larger, more complex commercial risks have components that insurtechs can support throughout the process, she says. And if there is a revolution in insurance, Instanda offers the tools to be at the forefront of it.

Tromba originally worked on the carrier side of the industry and Instanda’s ability to get a product to market with unprecedented speed and the enrichments that it can make happen along the way, are what attracted her to it.

“There's a real focus on getting the customer journey right whether it's an underwriter, broker or an insured.”

Returning to the key issues that she believes are impacting the insurance sector and the role her company may play, Tromba states: “Regardless of the proposition they’re supplying or the problem they’re trying to solve, there is a case study that exists within Instanda that can answer many problems within the industry.”

So what are its goals for 2019?

First is making the platform faster, cheaper and better. Data will be a key element of that, she says. Instanda also wants to extend the support it offers within the product life cycle – an enhanced self-service option that allows the insured, or other parties close to the end customer, to administer and manage risks ‘as quickly, efficiently and easily as possible’.

“So it’s not just the acquisition,” says Tromba, “but the management of that policy throughout its life.”

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PARIS FINTECH FORUM

Paris Fintech Forum Paris, the city of light, love… and insurtech. The French capital has been quietly romancing the sector for some time, but this year it came right out and said it at the Paris Fintech Forum: je t’adore.

For the first time, the two-day event ran an insurtech track, putting the latest trends in insurance innovation under the noses of the financial industry’s top influencers.

Hosts were The Insurtech Magazine’s editor-in-chief Ali Paterson and Florian Graillot, founder of Paris-based venture capital group Astorya, which specifically targets insurtech startups and scaleups.

Florian himself was named insurtech's top influencer in a list of 100 by Onalytica in 2016. Formerly an investor at AXA Venture Partners, he has put his money where his mouth is – in December Astorya made its first investment into a startup called Zelros, a firm that builds AI virtual assistants to support insurance employees.

Among the CEOs taking part in the insurtech track was Jean-Charles Velge, co-founder of Belgium's Qover, discussing the question ‘would technology help adjacent players enter the insurance market?’.

Qover staff, meanwhile, were preparing

Meet les perturbateurs – the disruptors – who are entering the insurance market on a mission to make it fun, fast and frictionless

also seen growth concentrated in France.

Qover plans to have its Parisian base fully operational with staff supporting business development, marketing and insurance functions installed by the end of the year.

Among several topics kicked around on the Forum stage, Stefan Knoll, chief executive of German insurer DFV to move into Paris, attracted by the city’s Deutsche Familienversicherung, looked at financial ecosystem – and the fact that more designing IT systems around the customer, than half of its 100,000 clients are French.

Christophe Bourguignat of Zelros Qover develops niche insurance products and Tomas Holub of Hong Kong's CoverGo sold white-label to businesses, among them exchanged ideas on how technology a rent insurance policy for Belgian can enhance the insurance property website Immoweb's experience and Janthana users, which protects Kaenprakhamroy, chief landlords when a executive of UK-based tenant fails to pay Tapoly, explained what and provides legal difference technology can cover. Another is make to insurance for SMEs. accident cover for His company is among bicycle delivery riders, its three up-and-coming most high-profile client insurtechs that we bumped being Deliveroo. into on the way to the Forum Founded in 2016, – three among more than with delivery Taking a 100 taking part, the services across fresh approach: biggest delegation of most of Europe, A record number insurtechs so far. Here, Deliveroo of insurtechs visited is what we learned. has Paris Fintech Forum

COVERGO COVER IN AN INSTANT Hong Kong is an established insurance market – protecting against uncertainty is part of the culture and individuals are typically well covered. But with regards to technology, providers are lagging.

Covergo offers a white-label platform that includes mobile and desktop apps so insurance professionals can sell products online and their customers can manage their policies digitally.

With its client portal app, a customer can see what cover they have, when policies are up for renewal and it pinpoints any gaps in cover. There is also a customer relationship management portal and a white-label, customer-facing comparison engine.

“Our goal is to facilitate instant

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quotation, underwriting, policy issuance, claims and admin, so our platform covers all these areas,” says founder Tomas Holub.

“Hong Kong is a huge insurance market and the whole of Southeast Asia is growing fast. Companies are keen to innovate, to digitise their products, and to distribute products online, so this is our main focus.”

Holub had worked in the insurance industry in both London and the Far East before moving to Hong Kong in 2017. As

Hong Kong is a huge insurance market and the whole of Southeast Asia is growing fast

well as identifying a demand, he was attracted by the support available from the Hong Kong government.

He says: “In Hong Kong there are lots of fintech programmes and companies are investing in fintech. Another reason for the move was the sheer number of ecommerce businesses there, so lots of opportunities for us.”

However, Holub recognises there's one key area where a Paris-based business has an advantage – and that’s EU regulation.

“In Europe fintechs can use one licence in multiple countries,” he says. “But for outsiders the regulation in every country is different.

“Thankfully, because we are a B2B company, we provide the tech and the customer has the licence, so regulation is not our concern.”

www.fintech.finance

CHEKK MAKING ONBOARDING SWEET To suggest onboarding is plain boring is sadly a fair assessment of how many consumers feel when buying insurance.

So Paris-based Chekk takes two approaches – make the insurer’s sign-up process slicker and give customers a tool to save time. For businesses that means consultancy, onboarding tools such as a white-label app and web interfaces, anti-fraud checks, facial recognition software and ongoing know-your-customer (KYC) support.

For the individual, Chekk has a free personal data wallet app, though which he/she can store, manage and share data, including ID documents, bank details and insurance policies.

Founder and chief executive Pascal Nizri says: “I had observed onboarding is a major pain point. It's costly, it's long-winded, and a lot of customers

drop the process part way through because they're fed-up with it.

“Our way is more efficient and cost effective for businesses and it’s useful for the end users because they can reuse their stored data. Consumers do not want to input their data many times across multiple institutions. They want a different approach.”

Chekk raised its profile by winning the startup pitch challenge at Money 20/20 Asia in Singapore last year – first winning its own regtech stream, then conquering firms focussed on areas including AI, mobile payments, blockchain and credit.

And it has partnered with financial institutions and major tech firms to spread the word, too.

“We’re working with many people but one example is Facebook,” says Nizri. “Sheryl Sandberg [Facebook chief operating officer] and her team selected

Chekk as one of the first five start-ups they wanted to support in the identity and personal data space. So we’ve been part of their first ever accelerator, the Startup Garage, here in Paris. We’ve benefited from their support in many ways and we’ve had a lot of publicity from them. Chekk was actually on the big screen on the annual Facebook F8 conference in San Francisco a few months ago.”

Onboarding is a major pain point. It’s costly, long-winded, and a lot of customers drop the process part way through

TAPOLY INSURANCE ON TAP FINTECH FINANCE: Can you introduce us to Tapoly... what do you do and who is your market?

JK: Tapoly is a digital managing agent.

The name is shorthand for 'insurance on tap'. Like any other broker, we sell insurance, but we have the ability to underwrite our own on-demand insurance products. We target freelance staff since the gig economy is growing fast. A policy can be bought to last as little as one day for someone with a one-off need. The full product list is professional indemnity cover, public liability, employer’s liability, cyber breach response, director and officer cover, buildings and contents insurance, business interruption and personal accident.

FF: You sell both to business and direct to customers. What do business clients need to do to sell your policies?

JK: First we must ensure a client has the underwriting capabilities and necessary licence so that we can create wonderful, on-demand insurance. And the second part is to make sure that they’ve got the

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When we started, we conducted a survey that found the majority of customers want to search for insurance using a mobile phone but wanted to buy the product on a PC technology to be able to power this on-demand insurance to the market.

It is vital that we get the incumbent on board to help us with the capacity.

FF: You have a relationship with brokers but how will your business affect the industry’s big players? Are you going to undercut them or work with them?

JK: I believe in collaboration. We see ourselves as an intermediary. We work with incumbents and insurers, as well as brokers. Our platform is made so that we can connect brokers with insurers, as well as brokers with customers.

FF: What’s the main focus of your platform so far?

JK: At the moment we have a dynamic website, which means you can use your mobile phone to check information.

When we started, we carried out a survey that found the majority of customers wanted to search for insurance using a mobile phone, but wanted to buy the product on a PC. So, at present we’re focussed on making sure our website has all the necessary content, so that customers can find out what they need to get insurance.

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LAST WORDS: BOOK REVIEW

How to avoid extinction – and other tips for insurers Susanne Chishti and her team of expert editors have produced a manual for digital evolution and it’s essential reading, says Will Dove

“There is such a strong general distrust in the insurance industry that many customers still retain a desperate need to look into the eyes of a broker they hope will still be there in the event of a claim.”

These are the words of Steve Tunstall, CEO and co-founder of Inzsure, taken from his article Why Is Insurance Failing?, one of the first pieces to feature in The InsurTECH Book.

In it he explains why there is currently such a ‘reservoir of ill will’ against insurance companies, and points at the areas that firms need to communally address in order to eradicate the industry’s unscrupulous reputation (spoiler alert: those are speed, security and transparency).

For some, the title of Steve’s article may be somewhat hard to swallow. How can a 300-year-old industry, worth more than £25billion in the UK alone, be failing?

Well, when you consider that the majority of the practices employed by major insurers haven’t been updated since the early 1980s, it’s safe to say that something needs to change. At its core, the insurance industry is based upon trust – promises shared between the insurer and policyholder that, when times are tough, it’ll be there to help. How can a customer trust a company whose systems pre-date Pentium processors?

What’s needed here is some sort of

manual on how to leverage modern technology to reinvigorate insurance processes and incite digital transformation across a stagnant industry. Handily subtitled The Insurance Technology Handbook for Investors, Entrepreneurs and FinTech Visionaries, if ever there was a book to rescue an entire industry from the brink of fossilisation, this is it.

Much like its siblings, The FinTECH Book and The WealthTECH Book, The InsurTECH Book is the product of an innovative crowdsourcing model, with 75 authors from across the sector each contributing one article each.

Once again, Susanne Chishti, editor-in-chief for the trilogy, and her team of highly esteemed editors, have successfully grouped the articles into nine distinct chapters, each of which addresses a particular focal point for the insurtech revolution.

Where The InsurTECH Book differs from the others is in its broader geographical perspective. With more than 92 per cent of insurance purchases being made online in China and thriving insurtech ecosystems developing across Latin America and East Africa, it was imperative that The InsurTech Book took the time to analyse why these regions have become such a hotbed of innovation. The editors have dedicated an entire chapter to this topic, entitled ‘Internationalizing

If ever there was a book to rescue an entire industry from the brink of fossilisation, this is it

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InsurTech’, with a view to informing the book’s European and American readers of the truly global movement that’s taking place. With any luck, they may even be able to learn a thing or two from these more rebellious regions.

As we rapidly approach the year 2020, the time is nigh for the insurance industry to leapfrog the first two decades of the 21st Century and jump straight into the third. If I had my way, a copy of The InsurTECH Book would be deposited on the desk of every major insurance company CEO across the land. That way, we might finally be able to change the meaning of the ‘I’ in insurance from inactivity to innovation.

The INSURTECH Book: The Insurance Technology Handbook for Investors, Entrepreneurs and FinTech Visionaries is published in paperback and Kindle editions by John Wiley & Sons.

Great for: Insurers feeling confused about how to stop providing paltry policies and start offering cutting-edge cover.

Best read: Bit by bit whenever you need it, just like your new car insurance policy.

Good read rating: ★★★★★

www.fintech.finance

X border Payments, Real Time Payments & Card Schemes

Banking Innovation Next Gen Retail and Commerce

Disruptive Tech

Register Online: https://bit.ly/2T2HPNK

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Platform Ecology

Cryptocurrencies & Tokenisation

Join the leaders from the global giants, rising superstars and trailblazing challengers across APAC and beyond at Money20/20 Asia this March in Singapore, to discover tomorrow’s game-changing innovations and connect with the decision makers ready to do business.

The world’s leading event to unite the greatest minds in Financial Services, pioneering the future of money is returning to Asia.

Zor Gorelov

CEO & Co-Founder Kasisto

CEO OneConnect

Bin Ru Tan

Group Managing Director & Group COO HSBC

Andy Maguire

President Zhong An International

Wayne Xu

Billy Alvarado

Chief Business Officer Stripe

Dr Taimur Baig

MD & Chief Economist DBS Group

Reuben Lai

Senior Managing Director Grab Financial Group

Henry Ma

Vice President & Chief Information Officer WeBank

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