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Integrating connected objects into the business model of insurance

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Technological changes are sweeping the world of insurance. Daniel Frank, COO of the Bâloise Group in Luxembourg, discusses those changes.

Would you kindly introduce the Bâloise Group to our magazine readers?

The Bâloise Group has been in Luxembourg for 125 years and is active in the fields of local and international life insurance, and non-life insurance. The company is headquartered in Basel, Switzerland and currently employs 350 people in Luxembourg.

What new technologies are changing your core business?

Technological developments, such as the emergence of the Internet of Things (IoT), open up entirely new possibilities for prevention and safety. For example, we now can monitor a home remotely and alert a homeowner in real time when a storm approaches. This should logically lead to a reduction in the amount of any damage sustained. The connected world is still early in its evolution, but insurers need to consider all of its possible applications to the industry, so that they can better advise their customers as to how to use connected devices to protect their property and minimize their losses. IoT also offers the opportunity for the insurer to better understand the needs of its customers and to offer the best services and products at the right times. This, however, requires an examination of the laws protecting personal data and must take into account the technological developments as well as consumer sensibilities.

By involving our employees in our innovation projects, we aim to create an internal energy and strengthen the pride of our employees.

How do you deal with these new technologies? How do you integrate them into your core business?

In 2015, we launched a mobile application called Game of Roads. This application allows the user to evaluate and improve his behavior on the road through technology built into his smartphone that can measure braking, acceleration, cornering, pace, etc. It ultimately allows us to educate users on road hazards and potentially reduce accidents. Furthermore, our application will evolve in 2016 and put even more of an emphasis on safety. We are very open to integrating these new technologies into the heart of our business, which always includes keeping our customers as safe as possible.

What are your ambitions and goals regarding your plan to develop an internal Open Innovation approach at Bâloise?

We want to include as many employees as possible in our reflections on innovations that impact our business. It is clear to us that by putting our heads together and discussing lots of different ideas, we are able to implement better ideas. By involving our employees in our innovation projects, we aim to create an internal energy and strengthen the pride of our employees. These innovative projects are mainly oriented toward enhancing our customers’ experience, both in terms of making their lives more secure and simplifying their contact with Bâloise.

In this context, what is your relationship with innovative startups? Is it easy to partner with them?

We developed Game of Roads with a Luxembourg startup called Motion-S. We met some very good people, highly motivated and, most importantly, very friendly. This allowed us to launch this project in a very short time, at least much shorter than many other projects happening across the company. There are many clichés circulating against the founders of start-ups: insanity, lack of organization or reliability… Working with Motion-S we found just the opposite.

We are following the topic of the autonomous car with great interest. The question is no longer whether the autonomous car will become the standard, but rather when.

Where does the inspiration to innovate and maintain your competitiveness come from? Are new projects developed internally?

In addition to involving our employees in innovation projects, our internal innovation team benefits from using ideas developed externally as well. We do not have the internal resources to implement 100% of the research and development. Our goal is to use the technology that is emerging around us to enhance the client’s security and make it easier to interact with Bâloise.

Google self-driving car’s computer has just been recognized as a driver. How does a sector whose business model has not much evolved in 50 years face these innovations?

We are following the topic of the autonomous car with great interest. The question is no longer whether the autonomous car will become the standard, but rather when. Autonomous cars will have a huge impact on the auto insurance market. The frequency and severity of road accidents will decrease, thus also the volume of our insurance premiums. But all this is in the interest of the client, who will benefit from increased security. The insurer will have to reposition itself, working more on prevention and support services. Our business will certainly not disappear, but it will have to adapt to technological developments to better serve customers and meet their expectations, which are changing as well.

We follow all developments with great interest while at the same time launching practical initiatives, such as Game of Roads. This experience with Game of Roads has allowed us to concretely evaluate how we can use such technologies to benefit our customers.

More broadly, connected devices are occupying more and more space in our homes. What does that change for the insurance industry?

Home automation will allow the insurer to provide prevention and assistance services, provided that it has access to the data transmitted by the connected objects. When the insurer is informed of the risk of the occurrence of a disaster, it can act preemptively or, if damage has already been avoided, it can send faster support services. For example, connected devices can detect the age of the pipes feeding the washing machine. Using this information we can replace the pipes preventively and avoid water damage. Home automation can thus strengthen the link between the insured and the insurer and enable the insurer to intervene to prevent a disaster. We believe that we are well positioned to provide this service because we have great expertise in risk management, assessing damage and handling incidents. Although, today, insurance products in Luxembourg do not yet access data from connected objects, they certainly will in the future, as we are already seeing it happen abroad.

What other industries are you watching closer? And why?

There are currently many developments, in areas such as cybercrime and the sharing economy, which will give rise to new risks for customers. On the other side, technologies such as telematics and home automation will ensure greater security for our customers. Finally, digital mobility will lead to greater simplicity of relations between the insured and the insurer. We follow all developments with great interest while at the same time launching practical initiatives, such as Game of Roads. This experience with Game of Roads has allowed us to concretely evaluate how we can use such technologies to benefit our customers. We, therefore, find ourselves in the midst of a phase of significant changes… and it’s exciting!



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