CEO-Interview with Handelsblatt

How is digitalisation changing the business model, products and risk analysis of insurance companies? This was one of the topics in an interview by sabine haupt with VIG CEO Elisabeth Stadler for Handelsblatt .?

The Coronavirus pandemic and new insurtech companies have stepped up digitalisation in your industry. How are your business model and products evolving as a result?

Elisabeth Stadler: We are using digitalisation to continuously expand services that offer added benefits for hedging against risks and ensuring coverage. We consider these added-service products essential if we, as an insurance company, want customers in the future to see us as part of the relevant set of things they regard important to their lives. The pandemic has heightened awareness of health issues in particular, and we have responded by offering new digital solutions. For example, our Austrian company Wiener St?dtische is working together with a start-up and has launched an app featuring an artificial intelligence-powered health assistant to help identify symptoms. Our Bulgarian company Bulstrad Life has developed an app that not only shows customers all their insurance details and available medical facilities in their vicinity at the touch of a button, but also allows them to easily make appointments and share data with their doctor confidentially. We have noticed that customers also increasingly welcome products that take their personal circumstances into account. Our Hungarian company Union, for example, has launched the digital health platform “Fitpuli”. There are many other examples in our Group, also for other insurance segments.

In the future, we plan to expand platform-based access to our insurance solutions. Our goal is to ensure a strong presence in ecosystems that are relevant to us, such as health, motor and housing. We expect to see a shift from competition between industries to competition between ecosystems. In an ecosystem, companies of different types cooperate, all of them jointly designing products and services that are geared toward customer needs rather than the products and services of individual partners. It will no longer be individual companies, but providers in these various ecosystems that work together to attract customers. In the future it will be important to be a part of these systems as a partner to offer customers the products and services that are best for them. One prime example of this is the motor ecosystem. Here we are working together with the car subscription start-up ViveLaCar with the goal of moving from being a motor insurer to being a mobility insurer. That means engaging with future models and trends. We have invested in the German start-up ViveLaCar because we see a future-oriented mobility concept with considerable potential going forward. This idea is fully aligned with the current zeitgeist, because it is flexible and fully digital, and has a transparent cost structure. The model is also plugged into the growing “sharing economy” trend.

In your opinion, will digitalisation also change how insurance companies analyse risk in the future?

Stadler: This will undoubtedly be the case, and digitally supported risk analysis will also help tailor products and services. One of our Polish companies is working on using artificial intelligence to develop a completely new type of price structure in motor insurance. The aim is to move away from the usual pricing design based on statistical data from the past and internal calculation modules, and to take into account customers’ individual risk and behavioural characteristics, their very personal requirements and current market developments. This should ultimately lead to making individual pricing and product design available at the touch of a button in real time. But artificial intelligence will also support us more effectively in assessing risks when it comes to the all-important issue of climate change. Pool solutions can be used to diversify natural disaster risks across populations and regions. One problem is that risks are typically assessed on the basis of historical loss runs, but this method is no longer sufficient given the developments brought about by climate change. We need to explore new avenues and make greater use of modern technologies, such as satellite imagery and social media data and digitalisation to capture trends and environmental changes in real time, rather than relying on historical models.?

Read the whole interview in German ?? https://bit.ly/3pxo4MI

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