EXCLUSIVE: “Driving ambition: From purchase to payout” – Stefano Bison and Danilo Raponi, Generali in ‘The Insurtech Magazine’
Stefano Bison, responsible for Business Development, Strategic Partnerships & Innovation at Generali Group, and Danilo Raponi, its Head of Innovation, share its ambitious growth and transformation plans – what they mean for the business, its customers and the wider insurance
THE INSURTECH MAGAZINE: World events have combined to make it an extraordinary few years for the insurance sector in particular. Has the industry suffered or benefitted from that?
STEFANO BISON: We’ve had all possible world problems coming together in the past two years – coming out of a pandemic, an emerging war and then macroeconomic issues.The defining moment was when the markets and share values of listed companies plummeted and there were no more initial public offerings and almost no private transactions in the sector. There was only one unicorn and everything was literally falling apart. Now it’s all picking up again, but this event defined things by revealing which entities were real and which were fake. There is the natural process in which the strongest businesses survived and can now innovate much better than before. There was real value creation and the whole ecosystem is now maintaining that.
Meeting customers’ needs is the number one criterion for success, whether they are B2B or B2C, but innovation also has to be business viable. Too many companies did not have sound business plans and grew up virtually in an environment where funding was massively available. Now those conditions, which were abnormal, have been taken away and the companies are not sustained by fundamentals, everything is collapsing on them. Nobody expects businesses to have a path to profitability within a year, and innovation often takes five or eight years or longer, so you need to be patient, but you must show how you are going to eventually make money.
Yet I keep seeing combined ratios beyond 120 per cent or 140 per cent, where businesses are destroying value and creating nothing. At Generali, we’ve actually accelerated our innovation and transformation efforts and many incumbents are doing the same. The market is also offering some good opportunities for bargains.
TIM: Insurance is a ‘pull’ industry – presenting people with a premium that’s right for them, which makes them suddenly think ‘I’ll have that’. What technologies does Generali use for this?
SB: Customers probably don’t want to hear from us, so we have to talk to them without even mentioning the word ‘insurance’. They prefer ‘protection’, the idea of us being there for them when they need us. Despite the fact that we are so big as the European leader in insurance, represented in more than 50 countries, we are still trying to push customer focus from the centre.There is a lot of AI-related digital data analytics technology to enable embedded insurance, or, as we call it, B2B2C, for motor, protection, health products, etc. Our bet is that most of the P&C growth, still a small part of the overall pie, is coming from embedded insurance – which is growing by at least two per cent more than the average market.We haven’t been as good at promoting ourselves as many startups and competitors, but our B2B2C volumes were close to two billion euros last year. We’re committed to growing our embedded insurance.
“Our bet is that most of the P&C growth, still a small part of the overall pie, is coming from embedded insurance”
That might start with integration with the distributor, sometimes even the last mile of a phone delivery, for example – maybe via a mobile-based app we distribute to our banking partners or retail customers, or a telco might issue our products in a click. We work with Mercado Libre, the Amazon of Latin America, investing in technology at different stages of the value chain and leveraging data.We believe Internet of Things wearables are a way to know much more about the customer, almost in real time. Insurance comes from the moment of underwriting, which is often self-declared data.
Thanks to these things, and the data our partners have through their channels and digital apps, and interaction with customers, we can get so much more data than before, to personalise our products, make them more interesting and sell them at the right moment. We still have a long way to go – and some startups are showing us some really interesting possibilities and are much quicker than us in grasping them. But we are trying.
DANILO RAPONI: Our Generali Jeniot division works only with Internet of Things (IoT), which we apply to motor, home and possessions. Then there’s IoT for industrial processes, looking at preventing major industrial accidents. Because if you cover a claim quickly, the customer is happy, but if you can prevent it from happening, they are even happier. We are also exploring new and emerging technologies all the time, because we want to make sure we don’t miss the train, and maybe actually be the pioneer – with things like the metaverse and generative AI, including ChatGPT.
We are testing what use cases there could be and there are lots. We’ve also realised, though, that we need to pay attention to the risks around these new technologies. When looking at automatic claims processing, for example, we asked an AI tool to make up a car accident. We said ‘can you send us a photo of a car accident that never existed?’ and it provided a perfectly generated photo of a damaged Audi A4, with a real registration plate. So we’ve now created a new fraud processing system to prevent that kind of thing from happening.The technology is evolving for good but we also have to consider how we can combat bad actors, because insurance is all about balancing risk.
The biggest evolution we want to see more of, is more collaboration between insurance ecosystem actors – incumbents, startups and even reinsurers – because the challenges facing the industry, and our world, are so big no company can tackle them alone.
TIM: Of all the innovation going on in insurance, payments and payouts seem to be the key battleground for winning and contenting customers. How is Generali approaching this?
“The relationship between the customer and the insurer is no longer just commercial. We want to be lifetime partners. That’s very ambitious, but technology helps a lot “
SB: We’re keen to innovate around this. The payment ecosystem is pretty commoditised already and there are so many options in terms of payment platforms and instruments, it’s about willingness to do something different. All our partners, the big payment providers and card acceptance schemes, are so digitised already, it’s pretty easy to do. However, the payout is the moment of truth and we want to make sure the customer gets paid as quickly as possible.Every case is different, whether B2B, B2B2C or traditional agency distributed models, but we’re working on shortening the time to payout as much as possible, sometimes through parametrics. We have a strategic alliance with Descartes Underwriting and, if we take the example of flooding, handled by our global corporate and commercial and speciality lines division, we would focus on confirming the event happened by searching for news articles, and providing the customer with the money they need to rebuild quickly.
In other instances, like when a customer loses their phone, this can be certified quickly to reimburse them so they can replace it straight away. From a technology and payment infrastructure point of view, payouts can now be almost immediate. Not many are doing it, but it is possible.
DR: Customer experience in insurance is still lagging behind other industries, so that’s something we really need to work on and AI can help a lot. The payment rails are there, it’s just about connecting the dots. For instance, we’re experimenting with a solution in some countries where, if something happens to a customer and we estimate the claim to be less than €2,000, they just send us a photo and it’s all automated. The AI recognises what car it is, where the accident was, what needs to be repaired and the cost, and says ‘would you like the money in your bank account or would you like the repair shop to come and pick up your car and sort it out?’
So, they can just click and it’s all done, rather than them having to sit at the side of a motorway, worrying. We reimburse them in seconds.We’re trying to change people’s perspective of the insurance industry, and the interrelationship between the customer and the insurer is evolving. It’s no longer just a commercial relationship. We want to be lifetime partners. That’s very ambitious but we are really trying to get there and new technology helps a lot.Generali is trying to apply similar kinds of easy solutions to how customers buy their insurance in the first place.
We’ll probably never get to the point where a customer says ‘I’m going to go and buy the new Apple Watch and an insurance policy!’ but payment evolution is important for us, both when someone does it themselves online and when it’s embedded invisibly with something else and they can pay with a solution like Apple Pay.
At the same time, it’s important to embed it in larger processes, too, like when they are buying a big life policy, where they are talking about substantial amounts of money. We’re working to embed solutions like automatic fraud detection systems, to ensure no money is being laundered, for example, while at the same time offering a great experience, both when they pay and at payout. We can no longer dictate how they pay and are paid… the days of only giving them their money by cheque are long gone!
GENERALI INVESTS £1.1BILLION INTO TECH
How the Italian insurer is pulling all the levers
Insurance is an industry that’s finally on the move, and established Italian giant Generali is leading from the front. Its customer-centric innovation strategy uses technologies like artificial intelligence (AI) and parametrics to reduce risk and ensure customers receive a speedy and efficient service when they need it most, at the point of claim.Milan-based Generali – whose business encompasses asset management, life, property and casualty, emerging risks and business insurance solutions – is ensconced in a transformation strategy called Lifetime Partner 24: Driving Growth, the ultimate goal of which is to establish Generali as its customers’ single, lifelong provider of all their insurance needs.
“We’re working on shortening the time to payout, sometimes through parametrics. From a technology and payment infrastructure point of view, payouts can now be almost immediate. Not many are doing it, but it is possible “
It is hinging its activities on three customer priorities, identified from research that demonstrated 73 per cent of them want ‘effortless and caring interactions’ in terms of speed, accessibility and clarity. And they want human support, especially around more complex or sensitive issues: personalisation and ‘relationship-based advice’ rather than just a transaction.According to the company’s website, this will see it investing €1.1billion in technology and digital processes to enhance customer value ‘by scaling digital advisory capabilities and establishing a seamless omnichannel approach across all distribution channels.’
It adds that ‘the Group is also investing in scaling up shared platforms, new data capabilities and in the wider adoption of smart automation and artificial intelligence (AI) technologies’. In fact, it identifies data, AI and automation as its most important ‘transformation levers’ to deliver tangible business value, reduce costs, shorten time-to-market and improve customer experience.
Key to that last aim is information, in a world characterised by what it describes as ‘digital humanity’, which creates a need to interpret points of fact – such as images, documents, videos and driving behaviour – fast.
As Generali states: “To be a lifetime partner to our customers, we need data to know them, to offer the solution they need, at the moment when they need it, through the right channel.
“We need insights to move from the traditional reactive approach to a proactive one, becoming able to anticipate future risks and prevent them.’Indeed, the organisation takes all of this so seriously that it has established its own Analytics Solution Centre and Smart Automation Centre of
Excellence to support its business units in developing best practice solutions – many using AI to analyse customer behaviour, absorb and interpret unstructured documents and automate more repetitive tasks.In June this year, it restructured its parametrics operation within its Global Corporate & Commercial arm, naming David Weber as head of parametrics, with a remit around increasing the business’ footprint in this space, building on its established partnership with parametic risk transfer-focussed insurtech managing general agency, Descartes Underwriting.
Generali’s half-year results, announced in August, showed a sharp profits increase, from €864million to €2.24billion with all arms of the business, apart from life insurance, which has been battling outflows, recording significant growth.
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