The digital transformation that our economy and society is experiencing, due to the expansion in the use of the Internet and new technologies, is affecting businesses of all sectors, including the insurance industry.
We can see the future of the insurance industry reflected in what is happening in the finance industry, where new digital players, both startups and tech giants from other industries, are quickly entering stage, and they are changing the way of doing things. On the other hand, the use of new technologies is changing consumer habits and the way they interact with companies.
In this new scenario, companies that were born offline have to change in order to survive, and the sooner the better.
In this interview we asked Jordi Rivera, CEO of DAS Spain, of the main challenges that the insurance industry faces: the digital transformation, the entry of new competitors in the insurance world, the speed of adaptation to change and cybersecurity.
This interview is also available in Spanish.
Main challenges for the insurance industry
Signaturit: In all events of the insurance industry - recently Barcelona hosted the 41st World Week of the Agent and Insurance Broker, and early November the international conference Insurance World Distribution Challenges 2015 took place in Madrid - one of the issues we see currently on the table is the topic of digital transformation. In relation to this, what do you think are the main challenges that the insurance industry is facing, and how do you think is the best way to address them?
Jordi Rivera: We are experiencing one of the most disruptive changes in our society and, therefore, also in the insurance sector. The customer, thanks to the massive use of smartphones, its interaction in social networks, its experience of making purchases with just one click, comparing products and services online, and assessing the quality of services is redefining the value chain of our industry and promoting the emergence of new business models.
Customer expectations are growing exponentially, and they expect the purchase of an insurance policy to be a similar experience like the one they are having with Amazon, Apple, Uber or Airbnb.
The speed in understanding customers' needs and responding with appropriate service solutions is, nowadays, the key to success for any insurance companies. Incorporating emerging opportunities as well as understanding the new service models in other sectors are key for innovation in the insurance sector.
S: In Spain, DAS has become the reference insure company in the sector of Legal Protection, thanks to its commitment to innovation. Continuing with the digital transformation topic, what steps have you already taken to turn DAS Spain into a digital insurer, capable of meeting the digital customers' needs?
J.R: The first step was to put the customer and the digital transformation as the main axes of our strategy for the next three years. To this end, we have initiated a project to digitally transform the company, called "Digital DAS". The first phase of this project is focused on adapting our business model to the digital environment and developing an ecosystem of digital solutions.
S: "Don’t expect different results if you do always the same" is a famous quote from Albert Einstein. Applied to the situation of insurance, it is clear that the shift to digital involves rethinking the long-term strategy, but also to revise the procedures and tools used to implement it. At an executive level, and given that DAS Spain is one of the first insurance companies in the industry that is using the advanced electronic signature, how is Signaturit helping the company in its digital transformation?
J.R: With Signaturit we have streamlined and simplified the buying process of our insurance policies and services. This has also helped us to improve in customer experience. Another process that we have streamlined by using the electronic signature has been incorporating new professionals to our partners' network.
S: Google has already made a move to enter the insurance industry. To mention two recent approaches, in 2011 it acquired BeatThatQuote.com, a price comparison car insurance; and in 2014 it bought Nest Labs, a manufacturer of thermostats, smoke alarms and sensors connected to the Internet, which meant strengthening Google's presence in the area of smart houses and the internet of things. What position do you think Google will adopt in the medium run and how it will affect the traditional players of the industry?
New digital players
J.R: No one doubts that Google is and will be a potential competitor in the insurance industry. In fact, one of the largest global insurance groups has approached Google to reach a possible alliance. In my opinion, Google will play a major role in the distribution of insurance products and services.
S: Large insurance companies are powerful, but also slow to making decisions, incorporating new technologies and adapting to changes that are already happening as the digital age progresses. Therefore, much less mature but much more agile startups, with products that are tailored to the customers' need, can compete with any industry giants (like we are already seeing in the finance industry). In your opinion, what techniques or tools can streamline the structures of large companies to improve their speed to adapt to change?
J.R: This is key to the insurance industry: how to integrate disruptive innovation in traditional business models and existing organizations. We are seeing a number of initiatives: companies that are creating their own startup accelerators, others that are establishing partnerships with independent accelerators -such as Axel Springer with Plug and Play or Allianz with Startupbootcamp- and other that are creating innovation teams within their organizations.
The key is the speed in which insurers can incorporate new business models and innovative solutions with the agility that the market and the customer are demanding.
S: In the Spanish insurance event “VII Encuentro Mediario de Líderes del Seguro”, Isabel Aguilera, former general director of Google Spain (2006 - 2008) also pointed to speed as one of the main challenges that insurance companies face, saying "we have to anticipate and become leaders, because otherwise we will be followers." However, most large companies tend to adopt a more reactive strategy - first see in which direction things will turn, and second decide which way to go - rather than proactive. What can large companies do to anticipate changes and be leaders instead of followers?
J.R: Large companies are already investing in digital transformation internally, to improve efficiency and processes, and externally, to improve the customer experience. Moreover, they are doing real projects in big data and cybersecurity. But the core of this transformation lies in attracting the talent capable of being a pioneer and not a follower.
S: All companies have confidential information, starting with its own employees' data. One of the consequences of the digital transformation is that the digitized information is located in interconnected platforms, often hosted in the cloud, which means on external servers that companies do not control. In this context, and having already seen several cases of data theft, suffering a cyber attack is one of the risks of greatest concern to companies. What mechanisms or tools can help companies mitigate these technological risks?
J.R: Our group, Munich Re is one of the leaders in Cybersecurity solutions. The focus of our specialists to mitigate this risk is prevention, by using tools that monitor systems in order to activate security measures from the very first moment a cyber attack is detected.
This interview is also available in Spanish.
- What are the innovation areas for insurance companies to adapt to the digital age?
- The digitization of an insurance policy buying process.
- Why insurance companies should use electronic signatures?
|About DAS Spain|
|DAS Spain is the reference insurer in the field of Legal Protection in Spain, established in the country in the mid-50s. The company belongs to ERGO group, which is based in Germany, and is one of the largest insurance groups in Europe: it has a turnover of 18 billion euros a year, it is present in over 30 countries and has over 40 million customers worldwide.|