Three CEOs look to the future
What are the challenges facing the insurance sector? Decavi asked three CEOs: Quentin Colmant, CEO of InsurTech Qover, Dorsan van Hecke, CEO of Athora Belgium, and Marc Lauwers, CEO of Argenta. While this was already the sixteenth time that Decavi organized such an event, this time it was in the form of a webinar hosted at the KPMG offices in Brussels.
What will distribution look like in the future?
Dorsan van Hecke, CEO of Athora Belgium: “Distribution models are changing dramatically, and technology is now decisive. All distribution channels are facing major challenges and the boundaries between the different channels are blurring. We see that brokers are going online, that independent bankers are becoming brokers, that direct banks are becoming insurers. The causes? Digital transformation and changing customer behavior!
Much of the brokerage world has had to adapt to the COVID-19 situation as well as to new technological methods. The concept of “going to the client” has evolved into a mixture of face-to-face meetings, telephone conversations and online contact. It all comes together to give the customer the experience they expect. "
Quentin Colmant, CEO of InsurTech Qover: “We are tackling a new ocean that is being created, and for which we use the words ‘embedded insurance’.” Qover aims to provide insurance solutions to the European industry and its service providers, through open Application Programming Interfaces (APIs). “These open APIs make it very easy for digital players to integrate our insurance solution, either to distribute insurance or to protect their own community of customers.”
We need pan European insurance solutions.
What is the role of a broker in this type of inclusive approach?
Marc Lauwers, CEO of Argenta, said that the bank insurer still achieves 100% of their sales in their physical branches. “The bulk of our sales are achieved through cross-selling, when we also offer our banking products. But we are well aware of the behavior of customers who are adopting digital tools more and more quickly. In addition to our qualitative approach to proximity, privacy and advice, we must also focus on the convenience that comes with going digital. Gradually, we will have to open our digital channels to address direct sales to customers, but always in relation to these basic services in Non-life and in Life”.
The CEO of Argenta sees new opportunities in open insurance and in the philosophy of open banking. “We could use InsurTechs for niche products that we don't want to develop on our own. With API technology, we can offer multiple products to customers, although we do not plan to develop and manage these products ourselves”.
In travel insurance, there are smart contracts whose algorithms allow for the provision of compensation before there are even any plane delays. Is this the future of insurance?
Quentin Colmant: “Customers want their questions answered. It's up to us to identify the applications that have real added value for customers. Moreover, I think there are still quite a few people who don’t fully understand how these AI models work. The question that also arises is: who checks the quality of the algorithms? This is quite a challenge for the legislator”.
What new risks do you see emerging? What are the trends that will move the insurance market?
Marc Lauwers: “To start with, there are discussions about adequate cyber risk coverage. A second trend concerns management by a third party in open insurance and open banking. If I chose to entrust the management to a third party, it will be important to properly assess the quality of this third party, because their intervention will play a decisive role in customer satisfaction. This type of management will become an important profession within our organization”.
Dorsan van Hecke: “Technology is our biggest challenge, but it's also an opportunity. You can see the power of technology and the speed it allows us to gain. Data gives us access to a phenomenal amount of knowledge and the ultimate connectivity. The key to success is how quickly and how often you innovate. The customer expects a tailor-made solution at a competitive price. Data allows us to offer a competitive price while maintaining solidarity”.
The data allows us to offer a competitive price while maintaining solidarity.
Marc Lauwers: “I expect to see rapid advancements in the data landscape as everyone gains experience and begins to market applications. At the same time, there is such an overabundance of gadgets that sometimes the customer gets lost in them. Customers don't care about buzzwords.
Since the General Data Protection Regulation, the customer has become more aware of the fact that they communicate a lot of confidential data. We are convinced that this data allows us to make life easier for our client. But at the same time, we are going to have to increasingly justify the precise and morally acceptable nature of our use of this personal data.
Gradually, we will have to open our digital channels more to direct sales.
Dorsan van Hecke: “The coronavirus also comes with new risks. There is a greater awareness of our vulnerability, and it creates new needs for coverage. Disability, death, but also unemployment, guaranteed income, childcare ... You don't want to be dependent once you retire. You have to build up reserves to be able to continue to live a long and comfortable life. Our needs are changing”.
So far, insurers have no solution for the risks associated with a pandemic. Could the response to pandemics be some kind of 'all-inclusive except' insurance?
Dorsan van Hecke: “An event of this magnitude always calls things into question. Before the 2016 attacks, terrorism was not considered a threat for the insurance sector. At the time, Assuralia clearly committed itself to approaching it from a sector level. The limits have been pushed back. But the concept of an 'all-inclusive except' insurance is still very, very unpayable.”
Quentin Colmant: “The big difference is that in the event of a pandemic, we face a systemic risk. Look at travel insurance. This is the very first time that borders have been closed around the world. The problem with this pandemic is that it directly affects everyone. We can therefore no longer speak of risk dispersion”.
Conclusion: Citizens want to be able to insure against this risk such as pandemics, but it is impossible for us to meet all expectations.
Pieter Herremans added: "An accelerated wave of consolidation is underway among Belgian insurers. As a result of the new European solvency requirements, unprofitable insurance portfolios are being divested and bought by conglomerates that can achieve greater economies of scale. Consolidation and professionalization are occurring, not only among insurers themselves, but also among insurance intermediaries as a result of the stricter legislation and guidelines on insurance distribution."