Exclusive: Diversifying now to insure tomorrow – Pascal Payot, Nucoro in The Insurtech Magazine

Swiss Risk & Care saw an opportunity to use wealthtech Nucoro to position the insurance and pensions broker for a digitally engaged future. 

Facing an ever-increasing threat from insurtech challengers, bigger insurers need to find ways to diversify and add value for their clients in order to stay ahead of the game. And one of the best ways of doing that is by extending their product range without disrupting their core business model.

So believes London-based fintech company Nucoro, which helped Swiss insurance and pension broker Swiss Risk & Care (SRC) to develop a supplementary wealth management platform for its 200,000-plus customers. Launched last year under SRC’s Opsion brand, the service is a market-ready solution that enabled SRC to diversify through expansion into the Swiss retail investment market, while also providing a next-generation experience for its brokers and clients. In effect, SRC could add a new revenue stream without compromising the long-established expertise of its key business and brand – a win-win for all involved.

“We had been looking for a solution provider that could fit our digital ambition,” says Pascal Payot, managing director for SRC’s two new business units, Opsion 3a and Opsion Vested Benefits. “The solution needed to be flexible, highly user-friendly for both clients and brokers and manage the associated administrative burden effectively.” The solution has full back-end automation powered by the Nucoro engine. This, in turn, enables a fully-automated user journey, from onboarding to billing. Retail clients receive a personalised user experience and gain access to different investment universes, including mutual funds, exchange-traded funds (ETFs) and index funds. The modular structure of the platform means that each function – including automated compliance and reporting features – operates independently of the other, reducing friction. Nucoro also set up application programming interface (API) connections for trading orders, which fitted in with another of SRC’s aims.

“Minimising the need for increased headcount was also a big part of our criteria,” says Payot. “Nucoro was able to deliver the digital platform we were looking for.” Back in 2017, Nucoro was developing a robo-investment product concept when it dawned on the team that what the wealth management industry really needed was a ‘new core’; a radical overhaul of both its technology and the relationship between technology providers and clients. The company launched its artificial intelligence-powered wealth management Exo Investing a year later. The fully-automated platform went on to win both Best Digital Wealth Manager Of The Year and Most Innovative Product Of The Year at the AltFi 2018 awards, and was named as a finalist in three other industry accolades. Nucoro also made WealthTech 100’s and Disruption50’s indexes of most disruptive UK companies. In its 2020 list, WealthTech 100 praised Nucoro for enabling ‘any financial organisation to build the next generation of investment and savings propositions quicker and more effectively than ever before’.

It added: “The platform allows banks and wealth managers to scale their client bases without increasing overheads; reach the next generation of investors with seamless user experiences; improve client prospecting with intuitive onboarding processes, including automated know your customer (KYC) checks, and reduce human error and paperwork while staying compliant.”

So, what does wealth management have to do with insurance? Nucoro describes itself as working with a wide range of financial services businesses – including banks and insurance providers – who want to be more agile, efficient and able to rethink what’s possible in the future. The company’s website boldly proclaims: “We believe in the power of technology to transform the way business is done and how clients are served.” And perhaps nowhere is such an ethos more needed than in the insurance industry, a sector particularly hard-hit by legacy problems – both in terms of technology and mindset. The benefits of technological innovation for insurers, on the other hand, are well documented, with automation streamlining areas that are historically slow or admin-heavy, like KYC and onboarding. This, in turn, can improve delivery of service and reduce the provider’s overheads.

But in addition to enhancing infrastructure, technology can also be used to supplement services – which is a great tool to attract new clients and promote customerstickiness in an industry often defined by little contact with customers. In its The Future Challenges Of Insurance whitepaper, Nucoro describes the industry as featuring what it calls ‘long-term, low-touch relationships’. This can prove problematic when building up customer engagement, something increasingly important for financial services providers in the digital age.

Adding bolt-on services, such as wealth management solutions or on-demand insurance for ‘micro-events’ such as borrowing a friend’s car, can not only help to diversify an insurer’s offerings, but also enable it to leverage the personal touch that has made building digital finance products so attractive to retail clients.

Customers: the big disruptors

A recent study by Deloitte backs up the importance of engaging, and re-engaging, clients. A Demanding Future: The Four Trends That Define Insurance In 2020 observed that the biggest disruptive force facing the industry was not technology, but customers themselves. It concluded that, in an age of immediacy where loyalty is no longer a given, the industry has to expand beyond its core offering to retain its customer base. Insurers believe that nearly two-thirds (62 per cent) of consumers regard non-insurance products as the most important factors when choosing an insurer, Deloitte revealed. Meanwhile, 57 per cent of providers think that access to friendly and knowledgeable staff for help is the most effective way of maintaining customer loyalty.

So, instead of forcing customers into an industry’s narrow definition of their needs, it is clear that digitally-capable insurers can benefit by coming up with new ways to utilise customer data to improve engagement and delivery of their services. Indeed, client and customer expectations were very much the reasons behind SRC’s launch of the Opsion wealth management solution. “The logic behind Opsion is two-fold,” says Richard Racine, managing director at SRC, which is a subsidiary of European insurer SIACI Saint-Honoré, and the leading pension broker in the French part of Switzerland. “The first concerns the expectation of companies. They are looking for flexibility in the management of their occupational pension plans. Our customers have approached us several times in this regard,” he adds. “Secondly, the French-speaking Swiss market only offered one solution, which did not meet the needs of our customers. We therefore decided to launch an open architecture fund offering two schemes, differentiated by the degree of autonomy and choice available.”

The flexible solution enables companies to create bespoke occupational pension solutions within Opsion, while also benefitting from shared structural costs, cost-effective negotiated frees and the transfer of risks. “They therefore have the freedom to choose their pension plans, their conversion rates and other technical parameters, the reinsurer and actuarial risk coverage, as well as the investment strategy,” adds Racine.

Digitally-engaged, high net-worth clients also benefit from an enhanced user experience, with seamless mobile and web apps, detailed portfolio management and visibility, including fees and payments for each client and automatic reconciliation of positions, with a direct link to an advisor, should they need one. A shorter, 10-minute onboarding frees up Opsion brokers to concentrate on added-value services, too.

The insurance industry has faced unprecedented disruption in recent years, which has only been heightened by the coronavirus pandemic – particularly in the property and casualty sector. But all is not lost. By bringing together insurance and products such as wealth management, insurers can re-energise their client base and increase their brands’ stickiness.

Meanwhile, companies can also improve and streamline their back-office operations by leveraging automation and structuring their business models to enhance human added value – just as SRC did with Opsion. Becoming digital does not require changing the very essence of the insurance business model. But it can help make a company more agile and attractive to customers, which any insurer looking for future growth must embrace – to the benefit of everyone.

This article was published in The Insurtech Magazine: Issue #4, Page 37.