Introducing our newest interview series “Scouting Insurtech” where we will present new the hottest insurtech trends from different industries ecosystems.
Learn straight from the executive decision makers of various insurtech companies and organizations about their use cases and secrets for their success.
How would you explain to a 10-year-old about your products and services?
Imagine, you live with your family in a beautiful house, with a large garden and nice children’s rooms for you and your brothers and sisters. Your parents go to work every day to earn money in order to pay all the bills associated with the house. Sometimes the house costs more than they earn, so they go to the bank and the bank gives them additional money to buy the house.
Together with the bank, we ensure that you and your family can continue to live in the house, and you can continue to play soccer in the garden.
Please share the visions of your company and how do you see them next 5-10 years? What is role do you aim to take on in the insurance industry of the future?
If insurance companies want to tap into ecosystems to be at the point of need, new insurance products and new ways to interact with customers are necessary. It will be no longer enough to keep on pushing the same complex & intransparent insurance products through traditional sales channels – (digital) ecosystems don’t work that way.
If you rent an e-scooter via a mobile app there is no tied agent around to explain to you whether your liability insurance covers a potential third-party claim. Or if your existing legal protection insurance covers a potential lawsuit in case of a traffic accident. You just want to enjoy the ride through the city and be protected in case something happens – no matter what.
Or if you share a car via a mobility service, you don’t want to bother about associated risks which may or may not have to be insured in pieces. You just want to use the car as long as you need it and want the insurance to cover any associated risks for exactly that period of time. You don’t want to fill out numerous pre-quote questionnaires and read through lengthy terms and conditions just to figure out on page 38, that certain risks are still excluded.
We fundamentally believe that new approaches to product innovation, pricing, and underwriting, combined with agile product development procedures are required to be successful in that field. This requires, on the one hand, a shift in the culture and mindset because it is fundamentally different compared to how it’s been done in the past. And it requires a technology which can handle things like multi-tenancy capabilities to individualize products per ecosystem partner, A/B testing of tariffs to figure out the best supply/demand equilibrium, intelligent renewal rules, real-time pricing functionality in case of little/no historical claims data to ensure profitable products etc.
Over the past 4 years we at Anivo have developed not only a deep understanding about product designs and the B2B2C distribution in ecosystems which work but also built up the technological capabilities to provide distribution partners and insurance companies an End-2-End solution to develop, distribute and maintain innovative insurance solutions without touching their IT legacy systems.
Can you share your most compelling use cases and developments of your company over the last 12 months?
Bancassurance sees a kind of a renaissance over the last couple of months, especially in the D/A/CH region. But in our view, it is not enough to offer traditional insurance products into e-banking systems or to leverage PSD2 regulations to leverage existing bank-data to save a couple of fields in the quotation process. This is traditional “push insurance products at the point of sale” mindset.
Since April 2018 we operate a very successful bancassurance solution in Switzerland which puts the bank in a larger ecosystem framework – in our example it is the ecosystem “Home” where the bank is covering the financing/mortgage piece.
Starting with this framework, we developed 5 new insurance products (both life and non-life) which cover risks associated with homeownership. The products fit smoothly into the banking use cases around mortgage where we offer not only self-service journeys but also an individual advisory done by insurance experts via video chat in the meeting room of the bank.
And the results are far better than expected:
- 75% of all customers who apply for a mortgage or have an existing mortgage with the bank, want to have an insurance advisory. It is highly relevant to the customers because it has a clear link to the product of the customer’s primary interest – which is the mortgage to fulfill his dreams of owning a home.
- 90% of all customers who had an insurance advisory rate the customer experience good or very good. Our hybrid approach of bringing experts to the table rather than leaving the customer on their own is highly appreciated.
- 55% of all customers who had an insurance advisory buy at least one insurance product. A hit-ratio which is hard to beat even by traditional distribution channels.
What kind of partners and customers are you looking for?
On the distribution side, we focus currently on the various players in the ecosystem “Home” which are banks, property managers, home brokers and alike.
On the insurance side, we focus on the mid-size insurer who very often have serious IT legacy issues or are just in transition from their old IT core insurance system into a new one where we offer them a solution to keep on with the product innovation rather than not doing anything for 3-5 years or even longer.
And we increasingly are in discussions with Reinsurer who understood that just offering underwriting capacity will not be enough in the future.
How do you see the role of the customer and how do you react to it?
Customers for us are the ultimate decision authority whether or not a new insurance solution is a success or not. And given our continuous product development approach, we’re running with Anivo, customers are key to us to get direct feedback on the product, eg which cover options or tariffs work or not.
How do you see the future of the insurance agent and broker?
Existing agents and broker still earn a very good salary based on the portfolios they have under management. And as long as insurer pay decent commissions on customer retention, I would not be too worried.
On new business for retail customers, I think they will get more and more under pressure – maybe not within the next couple of years while e.g. motor is still a product which works but what if nobody needs motor insurance anymore because of autonomous/self-driving vehicles, convenient car sharing offerings etc. There are not that many products left which are profitable enough to justify a stationary sales force of today’s size.
For mid- to large commercial customers an individual advisory with tailor-made solutions is an absolute must. Also here I believe in the traditional agent & broker model.
On your own confidence, you think we as an industry have a chance with tech giants Amazon, Google, Apple entering the insurance industry – how and why?
As an insurer, I would have a closer look at some of the Asian players who not only understand technology but also how to establish digital ecosystems at a large scale and how to successfully integrate financial service offerings within them. If companies like Ping An and alike start rolling out their ecosystems on a global scale, I believe this would become a game changer for the entire financial services industry.
Please share your 3 do’s and don’ts in building a new company.
My 3 do’s:
- Make sure you have a good understanding of the industry you’re about to enter.
- Surround yourself with people who are from the outside of the industry to question the status quo.
- Take care about your work/life balance – building up a new company is a Marathon, not a Sprint.
My 3 don’ts:
- Don’t overrate your own opinion whether something will be a success or not – the customers are the ones to decide.
- Don’t waste too much time with potential (large) partners on potential big deals – look for PoCs quickly and continue a bigger conversation based on them.
- Never give up, as long as you have ideas left where to take your company towards.
What piece of advice can you share young people and startups who want to enter the fast-spinning world of Insurtech and Fintech?
I think we have only seen a fraction of the changes to happen in the Insurance industry so far and I believe the opportunities for new companies in that field will increase. I am very happy to step out of Consultancy (where I was before) to not only advice insurers from the sideline what they should do but to have skin in the game and to be part of the change.
Please your top 3 books everyone today needs to read and top 3 tech gadgets one needs to have?
My 3 books:
- “Bad Blood”, John Carreyrou (available in Germany, in the US, in the UK, in France, in Italy and in Spain), on what not to do while starting a company.
- “How to win”, Mark Cuban (available in Germany, in the US, in the UK, in France, in Italy and in Spain), on persistence.
- “Quiet Leadership”, Carlo Ancelotti (available in Germany, in the US, in the UK, in France, in Italy and in Spain), on how to lead high-performance teams.
My 3 tech gadgets – not very interesting since I am not a gadget guy:
- iPhone (available in Germany, in the US, in the UK, in France, in Italy and in Spain), to stay in touch while on the road.
- iPad (available in Germany, in the US, in the UK, in France, in Italy and in Spain), to shorten continental Europe flights with a Netflix documentation.
- Kindle (available in Germany, in the US, in the UK, in France, in Italy and in Spain), to always have a good book at hand.
Before starting ANIVO in 2015 together with his co-founder Werner Flatz, Alex Bojer was a Manager with Accenture and a Principal with The Boston Consulting Group (BCG) for more than 12 years, supporting insurance companies in Europe and Latin America. He is a certified insurance broker.
Thank you Alex agreeing to our request even in a short notice, for your time and efforts you spent to share your thoughts and great insight. More power to ANIVO, Cheers!