“Digital disruption is a once-in-a-lifetime opportunity for insurance”
Philippe Donnet, Group CEO of Generali and speaker at the Digitising Europe Summit, shares his views on how digitisation disrupts the insurance industry and why it is an exciting time to be an insurer.
Digital disruption is a once-in-a-lifetime opportunity for the insurance industry. As a matter of fact, insurance has always been centered on the collection and interpretation of data to estimate risks. Today, thanks to new technologies such as connectivity and artificial intelligence, the span of possibilities that we, insurers, can tap into has expanded dramatically. It is, indeed, an exciting time to be an insurer.
Let me explain you why.
Why is digitization a life-time opportunity for the insurance industry?
I would sort the opportunities for the insurance industry deriving from digitization in two main clusters: first, the opportunity to change the approach to clients. Insurers usually have 1 to 3 touch points with an average customer per year. Digitization and connectivity make it possible for insurance companies to build better relationships with their clients – relationships based on prevention and constant care. This is a paradigm shift and requires companies not only to re-design their processes and products, but also to develop a mindset that focuses on customers first.
Second, the opportunity to adapt the traditional insurance business models to the so-called fourth industrial revolution, which requires the ability to embed digital innovation into the value chain by rethinking processes and, as a result, improving efficiency. Think of data analytics and the Internet of Things. The ability to collect and analyze big data from a variety of connected sources allows insurers to boost their operating performance. For instance, data analytics improves predictive models through which insurance companies calculate the chance of claims and, as a result, price their product offering. Data analytics helps insurers identify fraud and powers insurance solutions based on one’s lifestyle and prudent behavior. Artificial intelligence is also affecting the traditional insurance business model. In insurance, intelligent programs can perform repetitive tasks that add no value, such as checking repair quotes from external providers.
How does Generali invest and implement into digital transformation?
Under its new Generali 2021 strategic plan, Generali will innovate and transform its operating model by means of digital tools, with the final aim of becoming a life-time partner to its customers – offering them flexible and tailored solutions, 24/7 assistance and comprehensive advisory. €1 billion of investments in strategic initiatives is earmarked over the next cycle. Through our agents and distributors, we will respond to customers’ demand for qualified advice, care and human touch, which will remain key in an industry mainly based on trust. Upon doing so, we will ensure our response is in line with the latest and future technologies. For instance, our agents are being equipped with digital tools and customers will be able to manage their Generali policies via their mobiles.
How do customers benefit from the digital transformation?
Think of millennials, the largest single population in the world. They expect sophisticated personalized service to cater to ‘on-and-off’, ‘one-click-away’ needs, around the clock. We as industry leaders have to adapt our business models and way of connecting in an effort to capture this share of the market. More broadly, innovative technologies allow insurance companies to personalize their solutions around the client’s individual needs and lifestyle. At Generali, we are pioneering this both in the Life and in the Property & Casualty segments. In Life, we offer clients hybrid solutions that combine capital protection with the upside potential of financial markets, in a way that depends on the client’s propensity to risk and needs. In P&C, we fine-tune our motor policies on clients’ driving behaviors. Lately, we have started to expand this concept to home coverage and health solutions. Overall, digitization in insurance is estimated to increase efficiency, effectiveness and, as a result, customer satisfaction.
How to take employees on board?
Key to the digital transformation of insurance – or any other industry – are human resources. Under the Generali 2021 plan, we will provide our workforce with the digital skills needed to lead the transformation, in addition to scouting the best digital talents in the market. Because of the huge potential to be captured, I believe insurance is one of the most exciting industries for young professionals looking for professional opportunities. However, it is important to underline that training and recruiting, however necessary, are not enough to foster a culture of innovation and to attract, retain and nurture digital talents. Generali is developing a culture that promotes ownership, innovation and simplification. Generali intends to become a lean organization where digital entrepreneurship, diversity and – why not – failure as a way to learn are encouraged and rewarded.