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The smoothest way to market and manage insurance
We are facing a digital tsunami. Over the past ten years, the digital community has grown from 1.9 to 4.9 billion people. The volume of digital touchpoints and data has grown exponentially, too. So, how does digitalization impact market forces in general and the insurance industry in particular? Yann Domenech, Head of Digital at AXA Partners Credit and Lifestyle Protection (CLP), offers some answers.
“Our goal is to evolve our digital capabilities so that we can, in the smoothest possible way, offer coverage and provide support when needed. It’s all about making the process easy and painless for our customers, our partners and our teams”, says Yann Domenech.
“Digitalization isn’t new, but things are moving ever more quickly. Imagine that 90 per cent of existing data has been produced in the last two years alone! This is just the tip of the iceberg. Indeed, it’s much more than a question of handling data volume. This would be a far easier challenge. Adding more storage capabilities, in the cloud or in our data centres, would be the simple answer. The real story is about a bigger trend that’s shaking up every industry. Insurance is no exception. And it’s happening right now”, continues Domenech. Domenech has identified three key digitalization trends to watch that impact our business: the evolution of the platform economy, growth of “embedded insurance”, and the rise of new ways to connect IT systems. All of these trends are shaping our business and we need to continue transforming in order to turn them into an opportunity. Let’s dive into each of these three trends.
“Internet enables an almost unlimited number of people and entities to connect with one another. That has created a strong network effect. By persuading more and more people to use their service, businesses see an increase in the value of that service. And then even more people will flock to that service. Social networks like Facebook and LinkedIn are great examples of this virtuous network effect”, continues Domenech. In business, the network effect makes the ability to connect buyers and sellers an important part of the value of a service or a good. One example is Marriott, one of the largest hospitality companies. “Today, Marriott is half the market value of Booking.com, which focuses on connecting people looking to make a hotel reservation. With a platform, you don’t have to own and distribute a good or service to be able sell it. What we’re seeing in the hospitality industry is also evolving quickly in financial services, where we’re seeing a growing number of powerful aggregators”, remarks Domenech. It is therefore key for to be able to approach these new players and to ensure that our products are introduced on those platforms, as well. This provides a good transition to the second trend: the rise of embedded insurance.
Digital blurs value chains. A player from one sector can become active in another sector. Amazon began as a book seller and is now, among other things, a leading cloud-services provider. “Tesla, for example wishes to enter the insurance industry. Tesla recently announced that it will embed its own insurance coverage into the car-sales process. It claims that it can deliver a more inexpensive service because it has access to specific data, like the driver behaviour”, notes Domenech. For insurers, this move could be seen as a threat. To blunt this threat, we need to be best-in-class when it comes to leveraging vast amounts of data in order to better serve our customers. “This trend also represents a major opportunity to market our products where it matters most – along our partners’ customer journey. Proposing embedded insurance is at the core of what AXA Partners offers”, says Domenech.
One of the most important development areas is to find new seamless ways to include our products in a partner’s digital customer journey. This requires the integration of two IT systems, which can be challenging. “To this end, we are currently developing our API (Application Program Interface) capabilities, which enables the exchange of information easily between a partner’s IT system and our own”, continues Domenech. “For example, when a customer wants to get a quote for loan insurance while completing the loan application, API capabilities keep the customer in the same environment. The process is smooth and seamless for the end customer”, says Domenech. This is just one way API capabilities can improve the customer experience and boost sales conversion.
All of these trends demonstrate how important technology has become, how it’s impacting the “rules of the game” and how it’s key for insurers to harness the power of digital if they are to succeed. To better understand how technology is creating value, let’s look outside the insurance industry. “Here you have market capitalisations that are truly amazing. Microsoft is worth $1.5 trillion and Apple $1.6 trillion. At the same time, one of the world's largest publicly traded international oil and gas companies, ExxonMobil, is 6 to 7 times the size of these companies. When we say that data is the new oil, you can see it in those figures!”, remarks Domenech. Those who will be able to better leverage this technology for insurance sales will reap the benefits. That is why AXA Partners has continued to invest heavily in digital solutions.
We see digital innovation most clearly in the Nordic market – not least in terms of their nearly cashless societies and the use of the BankID to connect to many different services. One of the most innovative examples is how we have helped the Swedish Public Employment Service implement a blockchain solution which has made users’ claims handling process simpler and easier. “Blockchain enables a simple way of passing information in a fully automated and secure manner in order to reduce the burden on the part of jobseekers, since they don’t have to report their status each month. It also simplifies administration for the government agency and for us at AXA Partners”, says Domenech. When it comes to sales, we are also developing standardized digital tools to distribute our products. We are also enriching our customer journey beyond simple online claims management by creating a true customer portal where clients will find a lot of useful information and features. “We want to leverage digital capabilities to enhance the entire AXA Partners experience – from purchasing coverage to activating help in times of need. This translates into genuine peace of mind”, concludes Domenech. Yann Domenech, Head of Digital at AXA Partners Credit and Lifestyle Protection (CLP)