With the arrival of connectivity and digital technology in our homes and cars, the insurance market of our parents’ generation is nowhere to be found. Fond of innovation and new services, today’s customers and providers are turning a traditional profession upside down. Insurers face pressure to reinvent themselves in order to stay up to date and prepare for GAFA’s imminent arrival. Listen in on our meeting with Cédric Rochet, Chief Innovation Officer of Bâloise Assurances in Luxembourg.
(Featured Image: Cédric Rochet, Chief Innovation Officer of Bâloise Assurances in Luxembourg / Image Credit © Silicon Luxembourg / Olivier Minaire)
Internal innovation
As the head of Bâloise Assurances’s innovation department since the start of 2017, Rochet set up Innovation Lab (iLab) to help align the group’s approach with customer needs, and to anticipate and test ideas. This innovative program directly engages employees.
“We met and interviewed a group of customers, including newcomers to the Luxembourg market, using a design thinking approach. On the one hand, we found that they did not know the country well and were often in a state of stress when it came to finding a home, and on the other hand, that they were particularly open to digital,” Rochet explained.
In this context, the group launched GoodStart, the first fully online insurance provider for young apartment tenants. This client segment often has fewer assets to insure, apart from electronic equipment, and wants to be able to subscribe and pay online easily and quickly.
“We conducted a little Test & Learn last summer (2017) and in October we launched a new service,” Rochet said. It is this responsiveness that the head of innovation seeks to instill within the group through internal conferences or ideation processes. Launched in March, Test & Learn lasts three months and aims to inspire ideas and concrete improvements in the field.
“It’s a funnel with three main stages: the ideation process, the realization of the concept and the presentation of the business case to the management. We want to instill a startup spirit into the group!”
“With GoodStart we have a new service that offers faster onboarding and with Valoo the reimbursement for a possible disaster is simplified.”
Improving the client journey
In the value chain of an insurer, there are two key moments: onboarding and a disaster. In the first case, the price of the insurance is calculated according to the value of items and the contents of an apartment or house. Making a fair estimate and taking everything into account can be a challenge for customers. In the second case, the path to declaring a claim is often complicated, involving many forms and countless trips to the insurance agent. To improve these processes, Bâloise set up a partnership with French startup Valoo, who specializes in on-demand insurance and inventory of goods.
“We all have workbooks with our paper invoices. With Valoo, you can take pictures of the products you want to insure, and save your bills and warranties. You can also make your claims via an online chat. We have reviewed our processes so that these requests are handled as quickly as possible,” Rochet explained. “With GoodStart we have a new service that offers faster onboarding and with Valoo the reimbursement for a possible disaster is simplified.”
These additional services allow the insurance company to go beyond so-called conventional insurance and reach a broader target audience, beyond digital natives.
“We do not sell iPhones. Nobody is going to jump on insurance products. It’s up to us to innovate and bring new services.”
The connectivity of cars and homes allows insurers to help limit risks: “We are just at the beginning of connectivity. We cannot yet imagine the services of tomorrow. In a recent report, 75% of respondents were convinced that connectivity is a technology of the future. Seventy-five percent of respondents also think that it is a technology that has not yet found its market and does not offer enough related services,” Rochet said.
“We do not sell iPhones. Nobody is going to jump on insurance products. It’s up to us to innovate and bring new services,” he added.
The insurance landscape
Fifty-million Swiss francs: this is the amount allocated by Bâloise Assurances to invest in and acquire startups. In 2017, for example, the group invested in US startup Insurdata, which offers a 3D visualization tool for cross-listed buildings, including flood risk data, to help insurers better assess risk. Last year, the group also acquired Swiss startup MOVU and its move management service. The latter makes it possible to optimize the whole moving process, from checklists to the move itself to quotes.
“The appeal for Bâloise is being able to position itself within services that go beyond insurance and to be present at the beginning of the customer journey, for example when we know that they will move. In this case, the customer is initially interested in insurance for a short period: the duration of the move,” Rochet explained. “This is an event that is difficult to capture at the digital level. Thanks to MOVU, we can now cover the client during the move and then for the new home.”
“By tackling specific segments of the value chain, startups have opportunities to partner with major insurance groups.”
GDPR regulation is coming soon and can be seen as an opportunity, but also as a major challenge if regulation suffocates innovation. “We saw this with our bespoke car insurance service GoodDrive. For the sake of consumer protection, we chose from the outset to strictly compartmentalize personal data so that we cannot make the connection between connected data and claims. We had to use macro indicators, and we lost all the subtlety and relevance of the data collected. This is still the case, and the new regulations coming soon may be even more restrictive,” Rochet argued.
By tackling specific segments of the value chain, startups have opportunities to partner with major insurance groups. The real threat looming on the horizon is the arrival of GAFA (Google, Amazon, Facebook, Apple) to the insurance sector. Their mobile applications allow them to access all consumer data and be more specific in their targeting than the insurers themselves. A few months ago, Amazon recruited 200 people in London to work on insurance services.
