“Insurance is the most social product – how could one not like it?” Interview with Frank Genheimer

What does the reader need to know, that is not included in your bio?

I grew up on a vineyard together with four sisters. I really had a tough childhood. 🙂

You have worked your whole career in the insurance industry. Are you an insurance addict? What excites you?

I don’t like insurance, I love it. The idea of insurance is so simple, fascinating and powerful. Insurance is probably the most social product and so valuable for the well-being of an individual as well as the entire society. How could one not like it?

You focus on the insurance industry. There has been a lot of media attention lately on the industry that is more known for avoiding the spotlight. How do you estimate the state of the industry?

Insurance business is changing and this transformation is no ordinary evolution because it already becomes apparent that the magnitude of change is bigger and the speed, at which the change will move through the industry, will be significantly higher than ever before. It will be a fundamental change – at least a revolution – through which insurance business will reach the next level at last. The basic idea of and the need for insurance will last, but this may not hold true for each and every insurance company and the current best practice.

The status quo offers some «issues» that make life a little bit hard and that may sound the bell for an end of paradise. Indeed, insurance industry is in an upheaval and in a life crisis. The industry has to deal with several challenges on several levels. The advancing individualism of customers and the low interest rate environment in combination with higher regulations fuel the need for innovation and for processes, products and services that are more flexible. What most incumbents overlook is, that InsurTech and digitization are the solution to most of the existing problems.

What do you think are the biggest chances for incumbents to use the digital transformation? What are the biggest hurdles in your opinion?

After mastering the digital transformation, incumbents will be in the position to act faster and more efficient, to build new and better products, and finally, be closer to the customer and be a true solution provider through life. Major hurdles are from my perspective the present organization and structure, the prevailing mind-set, the ivory towers and the corresponding silo mentality. The upcoming transformation is foremost a mental transformation.

Concerning InsurTech company. Which InsurTech company has impressed you the most and why?

I will not highlight a specific company, however, I am impressed by the dynamism, the creativity and the enthusiasm that drive most InsurTech startups. This is fantastic! The insurance industry needs more of that.

In the last years now we have seen the first wave of InsurTech companies aiming at parts of the value chain. Now it seems the time is ripe for full digital insurers. Do you think this will be successful?

First of all, I think it is a logical development. It is wise to put together the full InsurTech puzzle. I am fully convinced that this is the way to go. However, having a good idea is nice and necessary but doing determines the success. It is probably not necessary to ask an oracle or to have a look into the crystal ball in order to conclude that not all of them will have success. However, the good thing is that this latest development will push the entire industry in the right direction.

What are your advice for actions for an insurance c-suite that understands that he or she needs to act soon?

It is not my job or intention to be a wise guy and to give advice from the outline. The situation for an insurer isn’t that easy but quite complex. It is not the time to rush. To follow frantic a series of random activities will end in a false start. Starting point for any activity should always be a new business strategy. I am not talking about a one-dimensional, copy & paste digital strategy from classical consultants but a holistic strategy covering all aspects and areas. Most insurer do not have such a strategy. Therefore, companies are well advised to spend some time to develop an individual road-map before they get started. Such a strategy should cover, for example, enhancements of the existing business model, improvements of single segments of the value chain and the related processes, remodeling of structure and organization of the company, and, of course, products.

What are your major Don’ts an insurer should definitely not do today?

Probably there are really a lot. I just mention some of them like just putting the existing product offer online, focusing too much on hubs and accelerator programs, selling the inforce business, focusing on core competencies, betting on a single activity or a single InsurTech, or trying to change the culture of a company at first.

What is your outlook on (life) insurance business?

Well, first of all we will see a lot of new cooperation between incumbents and InsurTech startups. This will help to bring insurance business to the next level and it will help insurers to overcome most of the prevailing issues. In addition, the confrontational InsurTechs and upcoming full digital insurer will further fuel the necessary transformation for good. I further assume that we will see in the life insurance area a fusion of FinTech and InsurTech (i.e. FinSurTech), which may lead to a renaissance of bancassurance. 

A differentiation between insurance segments isn’t natural for a customer since he has a totally different view. Therefore, we will see in the future a single insurance account. A kind of cockpit for each individual client that enables him to manage all his insurance matters. A little bit further afar this cockpit will be enhanced by all other financial aspects like savings account, credit account and others. Such an independent cockpit will, in the end, even help to overcome the financial literacy of society. 

At the end one personal question: What are your most favorite books? I am a big fan of books – even in the old-fashioned way with paper. I like works from Hermann Hesse, a German-born poet and novelist, a lot as well as pieces from Haruki Murakami. However, I do not have most favorite books, and highly recommend Sapiens and Homo Deus from Yuval Noah Harari. Yuval Noah Harari: “Spaien” in German, in English & “Homo Deus” in German, in English.

Bio: Frank is managing director with New Insurance Business (NIB), a consulting company for the insurance industry and its cooperation partners. With over thirteen years of experience within insurance business he focuses on topics such as innovation & digitization, new business strategy, product development & investments as well as cooperation management. Before he founded NIB, he worked as product developer, project manager, product manager and life actuary with different insurance groups and for several European countries. Frank studied mathematics and he is a full member of the German and Swiss actuarial association. He is a regular speaker and moderator at seminars & workshops and various other events throughout the financial service industry.

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