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The minnow scores:

Insurtech Vlot takes a different approach

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Vlot CEO Michael Dritsas describes how it got off the bench and onto the pitch with the life insurance premier leaguers

‘We are the Leicester City of the life insurance market’ might seem a novel way to open the discussion about the services Swiss-grown B2B2C company Vlot provides. But even for non-football fans, the unfancied and very unexpected minnow-champions of the 2015/16 Premier League season provide a useful illustration.

Like The Foxes, Vlot sees itself as a disruptor, outside of the hegemony of legacy life insurers (or established soccer powerhouses), challenging the accepted norms to put the consumer front and centre.

Vlot’s CEO Michael Dritsas, a man as gifted with descriptors as Leicester’s erstwhile coach Claudio Ranieri, fleshes out the analogy: “The current situation in elite football is a great comparison to life insurance,” he says.

“You have, let’s say, in Europe, the top 10 teams which are just behemoths. They are running a model that has been the same

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for ages, just like the major players in insurance. In football it’s TV money, in life insurance, it’s established, stable revenue streams. With the latter, in essence, it’s a simple product; you die, you get money (in the case of term life assurance). So, with such legacy platforms, where is the incentive to innovate – why change something you don’t think is broken? This might be a controversial view, but I simply don’t see much innovation in the industry.

“Innovation comes from the willingness to look at things afresh and small fry like ourselves (or Leicester City, if you like) are best-placed to bring the change customers increasingly expect. And, again like Leicester City, we brought together talented people who are not afraid to go against the grain.”

In football it’s TV money, in life insurance it’s established, stable revenue streams. With the latter, in essence, it’s a simple product… Where is the incentive to innovate?

In essence, Vlot – founded in 2017 – allows customers to access a much more nimble model that looks at their existing household income and compares this to what they would receive in the event of death, significant injury or retirement. It calculates if there is any shortfall in an individual’s financial provision and gives an honest analysis of whether additional cover is required – or not – by looking at someone’s personal circumstances, which may change for good or bad over time.

Vlot’s embedded interface, a ‘financial wellbeing tool’, operates within the existing systems of its partners – receptive insurers, pension funds, banks, mortgage brokers, companies that offer life insurance as an employee benefit – and offers a customer experience that is easy, reliable and flexible.

Dritsas says: “In the choice-driven world of Netflix and Amazon, consumers are telling us what customer experience they want. They want to be able to flip out their phone, put in their social security number, and it tell them ‘this is your current retirement pot. If you want to get in touch with a provider, click OK and your data will be transferred to ones that will analyse your situation, and you can then do X, Y or Z.

“You take your car to have a service probably every 18 months. People don’t do that with their finances. Why? Where is the quick check-up? You need to understand where you’re at; you need to maybe change your behaviour. Instead of which, the industry is still stuck with its, in many ways, outdated approach. At Vlot, we all come from the industry, and we all say the best sale is the sale where you don’t talk about the product, you talk about the need.”

That willingness to understand the very variable needs of an individual consumer is key. Vlot partners with organisations, but the underlying partnership is with the customer – establishing a relationship, whereby he or she feels comfortable engaging with their finances throughout their ever-changing lives. Trust and loyalty ideally promote frank discussions that allow the amount of cover to ebb and flow – increasing if there is a shortfall but also decreasing if the consumer has, for instance, been given enhanced benefits at work or there is a change to their marital status. Regularity of contact via more advanced technology is, in football parlance, an ‘open goal’ that the traditional institutions are failing to take advantage of, says Dritsas.

“We believe in leveraging the power of technology, i.e. workflows, the mobile phone, the power of data, data sharing, and having it all at someone’s fingertips. For example, if someone starts a new job with a benefit plan, it’s a long, laborious and often off-putting task to check out a pension fund statement. We tell our clients to implement a QR code on their new joiners leaflet, or on a welcome email. Employees can use their phone to scan it and see a personalised dataset that’s been input, through an agreement with either the partner insurer or pension fund they’re working with. It can be run through in under two or three minutes, is a much more satisfactory experience, and can typically be done in the workplace.”

This democratisation of life insurance extends to cutting through the endless associated paperwork. Instead, it offers something much more intuitive, user-friendly and faster, through a simplified three-stage process. Analysis looks at any gaps in coverage and how much it would cost to fill them. Coverage explains the bespoke offering in simple and clear terms. Life Planning provides the flexibility of coverage adjustment for life events, such as someone having a child, or, for instance if they stop smoking or lose weight. Throughout, Vlot never pushes a policy, because it does not work on a commission basis. But its partnerships with a number of insurers have increased their speed to market, driven down costs and vastly improved their customer experience.

The aim is to take the fear and fatigue out of arranging life cover and retirement

The ultimate goal:

To increase customer engagement and reduce customer stress

savings. And, to do that, it’s important to recognise where customer touch points will be. Life events like marriage, birth and death are self-evident, but it is in the workplace where, often, most opportunities arise. Increasingly, people make financial decisions when they receive a salary slip, gain a promotion or join a company.

Dritsas says: “In that moment you need something that’s intuitive, that’s rapid, that just grasps the moment of interest and passes this information on to a product provider or a partner. It’s about harnessing technology and giving the client a choice.” Dritsas continues: “We have a mission that we believe in; we want to make people financially responsible. It’s really about helping people, giving them tools to make the right decisions. Interacting with their insurers should be like a health check up – if people do it regularly, they will feel less stressed about things and can proactively take action. “We are simply saying ‘hey, take some time, do an analysis, run through where you’re at and then you’ll have the information to decide on what you need’. Money is an emotional subject, so, although it might sound a bit altruistic, we really want to help people have less stress.” But resistance to change among legacy insurers remains a problem, one that Dritsas says will have to be resolved one way or another. “Companies need to embrace what is coming. Instead of being busy investing in the status quo, they should be looking to make their IT as adaptable and API-adoptable as possible in order to partner up. Because we can’t do it without Top quotes Michael them, and we don’t want to do it Dritsas Vlot without them.” [Legacy insurers] are kind So, unlike Leicester of stuck in a Suez Canal. City, insurtechs aren’t Insurtechs need to be like the setting out to be little tugs and speedboats that giant-slayers. But… help them out. “We also see that You take your car to have a service they’re kind of stuck probably every 18 months. People in a Suez Canal,” says don’t do that with their finances. Why? Dritsas, referencing Where is the quick check-up? the Ever Given cargo ship lodged there in In Europe, the top 10 [football] teams March. “Insurtechs are behemoths. They’re running a need to be like the model that’s been the same for ages, little tugs and just like the major players in insurance. speedboats that help Top Quotes Claudio them out. But, if they Ranieri Leicester City keep telling us ‘well, no, we’re going to do It's important not to look down or this ourselves’, at some behind you. Like a climber, you need point, we’ll just moor to look up. If you look down, you go our boat, carry it ‘Oh! My God, look where we are!’. around the ship, put It's not important how many it back in the water mistakes you make; it’s about and cruise on. how many chances you create. “We feel that In my opinion, if you only there is more and show quality but no fighting more of a tipping spirit, you are half a player. point approaching.”