What is your analysis for the digital insurance ecosystem? What kind of trends and new use cases do you see?
Digital Insurance will become a market standard in the long term. With generation y and x, we have online-customers seeking for easy and customer-friendly apps, platforms products and services. I think P2P was a major trend when we started with it, back then.
As the pioneer of peer-to-peer insurances we still bring back trust and community sense to the business. Since then at least 30 copycats all over the world adapted this model already. A rather new trend which gains lots of awareness on the fintech market is digital bancassurance. We expect that in Germany alone, the market volume of digital bancassurance will grow to around 23 billion Euros in the next ten years. I see great potential for the insurance industry in big data and AI to automate processes.
Tell us more about, how you would define bancassurance and why you chose this topic.
When talking about Digital Bancassurance, or Bancassurance 2.0, we mean the distribution and management of insurances through online banking channels, like the customers online-banking portal. A concrete example can be given by our project we have with the Deutsche Bank. In future, the banks private customers will be able to manage and optimize their insurances through their portal. This also includes a nice overview, claims management, consulting, automate tariff comparison and also insurance exchange.
How we came to digital bancassurance is quite simple: We offer most of these services on out digital insurance platform to our own customers already. And we saw how banks want to extend their digital offer and bring additional value to their online banking. Therefore, it just makes sense for us to offer our platform to partners and make better insurance services available to an even larger target group.
Please share the current state and vision of Friendsurance. You receive a lot of traction – also international – what are the USPs of your company. What is your “friendly” approach?
Thank you! We receive great feedback for our P2P model since we launched it. This model enables a cashback, which rewards customers for staying claims-free. What is extra-special about it: Even if there are claims, our customers are always fully secured and have no additional costs – but always the chance to get a cashback. So far, over 80% of Friendsurance users have received a bonus. In the composite sector, the repayment averaged nearly 30% of paid premiums – depending on the respective insurance segment.
But also, our Digital Bancassurance approach is unique. There has never been such a deep integration of an insurance platform into any online banking. And we see further ways of integration: Especially for insurances and their customers or distribution partners. As our service is and the Friendsurance-platform is modular and flexible in their usage, there are no limits.
Having nearly 150,000 customers and managing over 30 million euros, do you think, how digitation on #InsurTech and #FinTech influenced your company in maintaining/ improving such numbers?
When Friendsurance was launched in 2010, fintech was just at its beginning and insurtech didn’t even exist. But the words meaning – the technical development of finances and insurances through digitation – is the basis of our daily business. We perceive ourselves as less as an insurance company and rather as a tech firm. Our goal is it to make insurances more customer-friendly and easy. This wouldn’t be possible without digitation.
Can you tell us more about your claims-free bonus initiative? What mutual benefits does it provide both for insurance companies and customers in Berlin?
Centuries ago, people protected each other in small groups. In village communities, the individual got support when his house burned down. This was trusting and efficient. However, the financial possibilities were limited. Today, insurance companies can carry damages of any size. Unlike in earlier village communities you have to pay in advance, nowadays. The money is gone even if the insurance was not used. With this in mind, Friendsurance has developed a peer-to-peer insurance model for its customers, combining the strength of large insurance companies with the benefits of small groups, rewarding staying claims-free within those groups, and making insurance more affordable. And as already mentioned before: There’s no risk for the customers. They never pay more as before, but can receive up to 40% of their paid premiums each year.
The claims-free bonus not only creates added value for assured people, but also for insurance companies. Currently, we cooperate with 175 insurance companies in Germany. These benefit from increased customer satisfaction and customer loyalty. At the same time, they save costs: As the claims-free bonus rewards staying claims-free, the customer gets a perceptible consideration for fair and prudent behavior. This creates positive incentives against insurance fraud and thereby lowers the damage frequencies.
You handle IT, Product, Customer Support, CRM, Marketing and Communications for Friendsurance. How many teams you have and how you manage such responsibilities.
The team of 100 people in our headquarters in Berlin Kreuzberg is divided into 12 departments. Each department has at least one head. Some bigger departments, like customer support and IT, are evenly divided into multiple teams. In this case, there’s an additional team leader, for each team. The departments I’m responsible report to me on a weekly basis and quarterly goals which we are working with make the achievements saleable and clear.
This structure makes it possible for me not to stay in close contact with the departments I’m responsible for without micro-managing them. And I can keep an eye on the big picture.
What are your predictions about the usage of digital #bancassurance solutions and how companies and customers would react? How Friensurance would comply with this improvement, what are your current and future programs?
We recognize a huge interest on both sides: Banks (or insurances) AND customers. A representative study in Germany we made in August, revealed, that 52% of online-banking are interested in digital bancassurance offers. They would like to view, optimize and manage their insurances in their online-banking portal.
If we’re going to base on your analysis, why France is anticipated to lead in the bancassurance in Europe even though the country has the smaller population?
Bancassurance has its origin in France. People there are used to buy insurance products in their bank. Additionally, they have a higher rate of online-banking usage as other countries. The combination of these factors leads to a higher digital bancassurance adoption, we predict.
A lot of traditional companies are struggling to adapt to the rapid changes we witness today. In your opinion, what do you think are the biggest chances for traditional companies to use the digital transformation as a chance? What are the biggest hurdles and how should corporates overcome them?
I think the easiest, fastest and most effective way for traditional insurance companies to catch up is to cooperate with insurtechs. Insurtechs are build digitally and agile right from the start. That’s why it’s easy for them to adapt new technologies. Less flexible companies can definitely profit from that.
But the biggest hurdle is not necessarily a process or product. It’s the mindset: Not to see digitalization as something that has to be done, but to belief in the great opportunities digitization brings to the companies and their customers. And therefore, work and think digitally. I definitely see movement here, but mostly in low pace.
What would you recommend to young people that start their career today?
- Focus on maximizing learning
- Don’t go after the brand of the employer, but after the people you’ll work with
- Understand that you can make a difference to the success but also to the culture of your work place from day one
He graduated with a Masters in International Management and started his career with The Boston Consulting Group and Rocket Internet, advising various companies on consumer goods and insurance matters. At Friendsurance Tim is responsible for IT, product, customer support, CRM, marketing and communications.
From all of us here in Digitalscouting.de, a big thank you and all the best for you Tim!