Is the record of an insurance claim paid in mere three seconds, recently published by one of the technologically most advanced American insurance companies, a harbinger of some new insurance times or mostly a good PR move? Will insurance companies still be among us in 20 or 30 years? When will we take out insurance with help of virtual assistants? We talked to Zoran Miloševič, Chief Innovation and Digital Officer at Zavarovalnica Triglav, about all this as well as about the influence of the blockchain technology and how to correctly understand the role of fintech and insure-tech in the disruption of the traditional, rather conservative insurance industry. As this year’s PODIM Challenge blue-chip partner and the leading insurance company in Slovenia and the Adriatic region, Zavarovalnica Triglav will pay special attention to startups that are developing products in the field of sharing economy and its implications for car and home insurance. They are also interested in solutions connected to connectivity, mobility, telematics and smart homes, so this post can be of use to you if you are looking for a strong and reputable corporate partner, such as one of the leading insurance and financial groups in Southeast Europe, to help you with product breakthrough.
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Mr. Miloševič, in your opinion, what will digital insurance companies of the future look like in 20, 30 years?
This question will definitely be very connected to the society and the environment in which we will live then. In some segments of human activity, the level of automatization could even eliminate the need for insurance as we know it today, for example in individual mobility. Connectivity of everything with everything will likely decrease the possibility of damage in other areas but also suitably limit the amount of damage that already occurred, for example water spill in a smart home. But even in the next 30 years, humans will not manage to tame nature or completely eliminate human stupidity, so generally we shouldn’t fear for the insurance industry. The risk of natural catastrophes and accidents due to human factors, not to even mention the danger of terrorist acts, will make sure that in such cases, big insurance and reinsurance sector will still play an important role in the society.
But the behaviour and expectations of individuals in the digital era are strongly changing. Which trends do you think will cause the biggest disruptions in insurance?
The sharing economy is definitely a strong trend, as is connectivity of people/things and mobility as a service. People own things less and less; what we find more important is the experience itself and that the desired thing or service is available exactly when we need it. In short, we are more interested in the user experience itself than in ownership. Of course, it is difficult to predict a completely accurate direction of development, so it is crucial for us to be actively embedded in the startup environment, not only through the co-ownership of the ABC Accelerator but also through direct investments into startups, organization of hackathons and similar. In order to be as close to startups and innovation as possible, we are one of the more important partners of the ABC Accelerator, within which the most promising young companies in the region work. Such collaboration enables us to co-form and access potentially interesting new knowledge and solutions that can be introduced even into our more traditional business operations. A good example is the new revolutionary partner approach connected to advanced driving simulators, which is very promising and will see the light of day in its final form this autumn. As far as our relationship to the dynamic world of tech innovations is concerned, we are not lagging behind the biggest global insurance companies in anything, so we are especially proud of that.
Numerous fintech and insure-tech solutions are on the move, supposedly strongly changing financial services as we know them. The mantras of startups and millennial users are mostly simpler, faster …
Definitely, the key is in simplicity, availability, and transparency. But we have to realize that today’s range of insurance products is very broad and that some products can also have very complex content that is difficult to quickly automatize in its entirety. It’s good that initiatives of the insure-tech world are trying to make things simpler, easier, and faster. For example, when we read that a digital American insurance company set a new record in the speed of paying an insurance claim, namely in three seconds (!), on the one hand, this is of course primarily excellent PR for the much-needed place under the sun and in the limelight that such a startup definitely sorely needs if it wishes to get investors. It’s clear that it isn’t possible to treat all insurance claims like that. On the other hand, it is an important signal for the entire insurance industry, showing how we can use AI and very sophisticated algorithms of behavioural economics to completely digitalize all client interactions. This means that in the given example of a concrete digital insurance company, all transactions with the client can be viewed in real time, and this information can help the company a lot in optimizing future marketing methods and similar. Once the entire engagement with the client is digital, data-based decisions are also faster or immediate, and thus business operations become cheaper. An interesting concept here is that behind the simplicity that a client sees (reporting damage by simply speaking into a camera), there is hidden science with complex behavioural algorithms that make the process of damage settlement faster and cheaper.
So we will not communicate only with robots and virtual assistants in all types of insurance?
As I said, paying the insurance claim for a case of a stolen jacket on a city bus is significantly easier and less demanding than, for example, liability insurance or eliminating the consequences of traffic accidents and claim settlement when a severe physical injury or disability is present. It is similar with assuming larger industrial risks, where the reinsurance sector is also often included in the process. In short, some things can be addressed completely digitally today, while others are still waiting for a suitable tech environment and infrastructure.
What is your opinion of the blockchain technology in insurance digitalization?
The blockchain technology is definitely very promising, because we will be able to use it in insurance with good effect, once it is ready for it. Actually Zavarovalnica Triglav is already trying to address niche products with prototypes, attempting to show the advantages of blockchain. If in the case of the stolen jacket, the client previously still had to report the damages, the technology of data blocks could be used to pay the agreed-upon amount completely automatically when damage occurs, because the damage is reported by the system on its own. But it will probably be some time before blockchain is implemented and completely introduced into insurance and further, into other suitable service activities.
Then everything isn’t as disruptive as it wishes to show itself to be in this moment?
Well … Moore’s law hasn’t said its last word yet, the development is exponential and we definitely have to be aware of that. But we also have to realize that the startup hype is happening at a very suitable time, when the interest rates are low, so the increased activity in venture capital and accelerators additionally establishes certain expectations that can sometimes go beyond the limits of reality. Not every startup idea is a potential unicorn, it is necessary to go step by step. I’m noticing that young people often have a very good feeling for everything that could be simplified, they also have an excellent insight into new technologies. But they often lack the industrial know-how, so we can quickly come to exaggerated simplification. The best recipe is definitely connecting both worlds, because the dynamic approaches of startups, the freshness of their ideas, speed of development and idea implementation can be combined with corporate insurance culture, which is more traditional and conservative but still contains the much-needed content know-how that young people just can’t have.
So where are the key opportunities for young startups or the solutions that are potentially interesting for you?
Part of the opportunity definitely lies in the gamification of products and solutions. In health insurance, for example, we can encourage users to make healthier decisions, lead a healthier lifestyle, buy healthier products, and so on. In this, what is often crucial is how playful, interesting the solution itself is. It’s similar with encouraging safer behaviour – for example slower driving, because we know that speed kills. For example, we simply and unobtrusively implemented functionalities of telematics into the application Drajv, where our users are rewarded with insurance discounts and many rewards when they use the applications and follow the speed limits.
Which technologies are also important when we talk about startup ideas that are potentially interesting for insurance?
I already mentioned connectivity, where everything will be connected to everything, considering a certain long-term perspective. At least to a certain extent. User platforms will give providers large amounts of data, which will be the basis for improving a user’s life. In the car industry, for example, a car not being able to act relatively smartly hasn’t been a problem for a while, at least as far as connectivity is concerned, instead the bigger challenge is in the fact that there are several generations of cars on the road at the moment. How can you find a solution that successfully addresses this problem? In this, another important question is how to make this connectivity into a successful business model. Are potential solutions worth the investment, does the insurance premium handle them?
Is connectivity the most topical in the automotive industry and car insurance?
Yes, that is how it seems at the moment. But for us, various wearable devices will be important as well as everything connected to smart homes. In this, we are more strongly counting on our role in giving clients various assistance. Smart, connected devices will enable us to be one step ahead of the client. These are, for example, smart solutions for protecting houses or apartments while we aren’t home, or for cases of injuries and falls of users detected by a wearable accessory or other smart devices in an apartment. After all, it is also about finding damage that will occur due to, for example, water spill, and eliminating it while the client is on vacation on the other side of the world and just informing them about everything.
As this year’s PODIM blue-chip partner, you address connectivity but also mobility, telematics …
These terms go hand-in-hand. In mobility, we know challenges connected to it. Firstly, not all solutions are for everyone. Electrical car-sharing in Ljubljana, for example, is a nice and functional solution, but it doesn’t solve all problems and situations of users. We don’t even wish to guide startups too much in their thinking, because unburdened teams and freshness of new ideas are more welcome. In connectivity and telematics, we are definitely not interested only in passive, but also in active devices and solutions. However, we have to be careful about all risks that can arise from it, especially safety and cyber ones.
So what does one have to be most careful about when planning innovative insurance products in the light of the digital revolution?
In the future, users will probably expect all these solutions to already be built into the products that they use. In the sharing economy, for example, I will expect that nothing bad will happen to me if I use a service according to the set rules, and I won’t think about whether the item is insured, whether I am liable etc. I will expect there to be a certain background service that ensures that I am taken care of as a user. Broadly speaking, when developing apps and new business models in the future, the most important thing will be for providers to solve a real problem, desire or need of customers, preferably before the person is even aware of it.
Which are currently the key goals and challenges of digitalization in Zavarovalnica Triglav?
The most obvious change in our business operations in the next few years will be in completely paperless business, simplified payment and other processes, optimization of products and tools of insurance agents, as well as in bigger accessibility, transparency and flexibility of online portals for more advanced and technologically more conscious consumers. We wish to put the customer into the centre of the business even more, and equate our business goals with their needs.
What about the field of innovation, encouraging innovations?
This is actually one of the main challenges. Mostly in suitably addressing the field of innovation, upgrading the knowledge and skills of employees in techniques of innovation, acceleration, connectivity and business digitalization in the broadest sense. An important challenge will be unifying the user experience in taking out different types of insurance through digital sales paths as well as suitably migrating between sales paths everywhere where the customer expects it and wants it. What will also be crucial in the future, alongside a rapid technological tempo, is suitably managing the innovation process with the purpose of identifying new business strategies, business opportunities and modern technologies, developing the ability of building partnership connections and new business models, with the entire path from forming ideas and concepts to commercializing the most successful experiments.
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Get in touch with Zavarovalnica Triglav
If you wish to introduce Zavarovalnica Triglav to your innovative idea in the field of sharing economy and its implications for car and home insurance, you can write to Zoran Miloševič (firstname.lastname@example.org
) and arrange an introductory meeting at the PODIM Conference.
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More information about how to collaborate with Zavarovalnica Triglav:
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Author: Stanislava Vabšek
, Start:up Slovenia Initiative