The GENERALI Group, included by MIT in the list of the 50 smartest companies on the planet, has been focusing on the complete digitization of its key processes. What are the main projects and what impact will these have on distributors and customers in the foreseeable future?
Valter TREVISANI: There are numerous projects and ongoing initiatives to digitalize our processes and products so I wouldn’t be able to do justice to them all here. Let me start with describing the ambition which drives us forward and I’ll also give a few examples.
Our goal is a GENERALI which is ‘simpler and smarter’ for our clients. This cuts right across everything we do from the initial contact, through to finalizing a policy or making a claim. Our starting point is to ensure that the platforms on which we operate are seamless from first contact through to renewal or claims. So when an initial enquiry comes online a follow up meeting which might take place in a branch doesn’t require the client filling in the same documentation in hard copy! We need to ensure that our platforms cut across technologies and all information can be found easily and in one place.
Then, looking at our contact with our customers we need to interact in the way the clients want. In many cases that’s when they are on the move so in Italy we’ve provided around 3.000 agents with tablets, which also include the ability to accept digital signatures. We also have a pilot program where a client shares his driving data and we can provide advice on improving their performance on the road, which over time will help reduce the premium. Finally, we also have new products and services, such as the Vitality program that provides many more customer touch points.
Overall, we are looking to remove delicate points from our interaction with our clients and make it an experience that resembles the best of what you see amongst online retailers in terms of convenience and ease.
Innovation, and mostly fintech, is considered to be a game-changer for the insurance industry. What trends have you identified so far and how has the Group reacted?
V.T.: Telematics has been and will continue to be a game-changer. We’ve been a leader in this field and I believe that it really does allow for a different approach to motor insurance. I am excited by the fact that we are expanding our offering in Germany and increasingly we are chosen as a partner by auto manufacturers. This trend is now expanding with demotics, which is capturing the so-called ‘Internet of Things’ within home connectivity. It’s an interesting area in rapid development. We’re starting with the home assistance services where are able to leverage off our Europ Assistance offering, but we’ll see what comes next.
Also, on the life insurance side, there is an enormous innovation potential around data and the ability to structure it in useful ways. We have seen some interesting developments in the health and protection sectors. But along with this we also have to be very mindful of the way we do it and respect the desires of our clients. Most importantly, it is a must to take into consideration that the core purpose of insurance and the pooling of risks remains as valid as ever. We are not looking to individualize our offer but to provide new and hopefully better services and products.
Finally, I think the biggest game changer is the impact of mobility. An increasing number of clients organize their lives, interact and use mobile devices as their main point of contact. This links in with what I said previously about seamless operations behind the scene. GENERALI will win and retain clients by virtue of our technical excellence and making that experience as pleasurable as possible.
What is your approach towards implementing new projects that rely on digitization, considering that the Group is now present in many countries with different economical but also social background?
V.T.: There is no hard and fast rule. As a business, you always want to make the most impact for your investment, so you will do a full market analysis to help drive your decision. However, we also consider where the expertise is and where we can create an edge. A case in point is when we launched our innovative motor insurance app and product in Turkey. We set up a ‘SWAT’ team comprising of professionals in Germany and the CEE to help in its development and roll-out. The end product was a great success and the experience was something we could take back to the respective markets.
Telematics has been on the agenda of different European insurance groups, but GENERALI managed to steal the attention. Could you give us more insight into this?
V.T.: Genertel was the first online offering in Italy and continues to be a very innovative company. It enabled us early on to build a deep expertise in this space. We have grown solidly in Italy with now over one million policies.
The acquisition of MyDrive is also an important accelerator in keeping us ahead of the curve. This is a highly sophisticated data-analytics company, based in the UK, which we acquired last year. I think that helped bring us together with Progressive, the US leader in telematics, where we have an R&D agreement. I am confident that this will also provide some interesting developments.
In how many markets does GENERALI currently offers telematics or PAYD solutions and with that results? What percentage of the total motor business (in the countries where it is available) comes from telematics-based products?
V.T.: As mentioned before, in Italy, we’ve already reached important results using a variety of value propositions and in this market – combining the offering of GENERALI and Genertel – we achieved a penetration around 20% of telematics policies on the portfolio, while the penetration on new business is around 40%. Apart from the mileage based product, GENERALI recently launched also a new behavioral product with innovative real time coaching functionalities – GENERALI Sei In Auto Con Stile, that enriches the product palette of the Company.
Then, the Group has active PHYD offers also in GENERALI España in Spain and GENERALI Poistovna a.s. in Slovakia, where in 2015 it was launched the SOS Partner product, the first solution of this kind in the Central and Eastern Europe. The product – which utilizes a telematics windscreen box with a panic button, a microphone and a speaker – allows advanced assistance to be provided to the driver and his/her entire family both in case of breakdown and emergency. Thanks to the accelerometer present in the box, road accidents can be detected automatically; in that case a service request is directly sent to the Europ Assistance operations center and the customer can speak directly to an operator to check the type of assistance required and/or to get immediate access to the emergency services. At the same time the product is used to determine the driving style of the customer and uses a Pay How You Drive algorithm to reward virtuous drivers through renewal discounts both on MTPL and Material Own Damages.
In addition, starting from July 1st 2016, two new telematics solutions were launched within the GENERALI Group in Germany. GENERALI Versicherung and Aachenmunchener Versicherung launched respectively GENERALI Mobility and Telematik, innovative products based on a smartphone app solution and on a behavioral profiling which is allowing to provide customized rewards to customers driving safely.
We aim at reaching new challenging objectives going forward, in particular we are not aiming at growth in itself, but at a sustainable tradeoff between growth, excellent technical results and customer satisfaction.
Since the motor insurance markets are structurally different, we are convinced that there’s no “one solution fits all”. The value proposition and underlying technology need to be customized to the local specifics. In particular we have to pay attention at the customers’ needs and the distribution channels of each market in order to define the right value proposition and pricing approach.
Do you see telematics as a transitory solution for personalized pricing until the large scale adoption of autonomous cars?
V.T.: No, telematics will be an integral part of autonomous driving. The data will probably be more structured, but equally important to delivering a safe experience for road users. We are still early in that journey.
How do you believe autonomous cars will impact the insurance industry? How are insurers preparing for this next step in motor insurance?
V.T.: As an industry, there is still some thinking to do along with the development of this technology. A key area is around the shift in liability as new, different actors will be involved in road safety issues. The list of issues is long: is the software faulty, was the vehicle hacked, was the latest update installed? I could go on. It will require an open and cooperative approach from governments, regulators, insurers, software developers and car manufacturers to name a few. We’re honored to play a part of this discussion as participants in the European Commission’s GEAR 2030 working group. But I think it’s really important that we try to identify and agree on some global standards, it would ease adopting of this fascinating technology.
On the underwriting side/ damage assessment could we see drones playing a more important role in the near future?
V.T.: Yes, in line with regulatory developments, we will. In the Czech Republic, our subsidiary, CESKA pojistovna, is using drones for surveys, inspections and detailed documentation of the location of losses. This technology makes this process easier and more effective and helps in claims handling. The detailed pictures produced identified precisely the real extent and cause of damage which it would not have been possible to assess without this technology. The clients themselves were pleasantly surprised by the advanced technology CESKA pojistovna is using. In several cases the clients even agreed to the use the documentation produced by the drones as the main support for determining the level of damage.
Currently, drones are used for inspections of halls, buildings, large premises, construction machinery, cranes, planes and trains, bridges, dams, chimneys and tall buildings, agricultural plantations and crops, large floods and fires. But as the technology improves, such as longer battery life, it is even possible to think about it moving from bigger, commercial lines into the retail space for example for road traffic incidents.
According to previous public statements of GENERALI’s leading representatives, the Group was prepared to invest EUR 1.25 bn to transform the business. What is the main outcome of this endeavor so far?
V.T.: Actually one of the main outcomes has been to provide greater focus on those things that are really going to make the difference for our business and by definition our clients. The industry is in a phase when we have to be incredibly cost conscious. This is partly due to low interest rates and partly because the pace of technology is such that you need to learn fast and be smart about allocating resources.
I believe a result of this is that we’ll see many more partnerships and collaborations between established players like ourselves and not only Fintech, but technology players in general. It’s perhaps a more mature approach, with each party recognizing the strengths they bring to the relationship. For example we might have the distribution capabilities or the capital, but lack the ability to optimize our online presence on a branch by branch basis.
How do you see the future of the insurance business in the light of these new and upcoming technological changes? Is peer-to-peer insurance an opportunity or a threat to the conventional way of doing business, from your perspective?
V.T.: I think we work in a business which is arguably one of the more exciting ones at this moment in time. It really does have everything to play for and is in the midst of some pretty fundamental changes.
Having said that, I do believe it will be very hard for a start up to have an impact on the scale of a business like GENERALI. Peer-to-peer may be an opportunity, but why is it not something which can also be delivered by existing players? We are, of course, already regulated and have deep risk management skills.
So big businesses like ours can be agile. But the other thing is that ours is very much a people business. A company can have the most amazing platform in the world, but if they cannot be there with the same immediacy and ease when you have a car accident or your home gets flooded you’re missing a big piece of the customer experience. Being there at the moment of need is a crucial part of this industry.
According to your official resume, you were in charge of the working team paving the way for GENERALI Group’s entrance in the Chinese market, soon followed by India, but also responsible for the CEE markets. Could we have your thoughts on the main challenges posed by working in such different cultural environments? Which are the main differences in terms of customers’ expectations?
V.T.: There are obviously local differences, so it’s very important to be able to adapt your offering to take those into account. But, digitalization brings with it a certain degree of homogeneity in terms of access and interaction. An obvious example is allowing clients to be in touch on the move through portable devices.
A real challenge in this regard is the various regulatory environments and lack of harmonization across the world. Technology breaks down these frontiers and regulators need to have the agility – and courage – to stay on top of these developments. What we need is a global approach to regulation and issues such as data protection or privacy. I know this is an ambitious task, but it would really help the industry deliver the new products and services it is capable of and also generate jobs and growth!