Most stories about building ecosystems are about the blue chip multinationals. Which makes it seem like this avenue of innovation can only be fostered if the company has a certain scale. That is hardly true, as is shown by German Versicherungskammer Group. The company is successfully building ecosystems that add value to their customers. Robert Heene, board member at Versicherungskammer Group explains how.
Versicherungskammer Group is based in Munich. The company offers a comprehensive portfolio of insurance solutions for the German market; a full-liner protecting both people and objects. The annual premium volume amounts to 8.1 billion euro. Robert Heene is responsible for customer and sales services. Furthermore, he is chairman of the advisory board of InsurTech Hub Munich (ITHM), one of DIA’s much valued partners.
So many very different definitions are being used. How would you define ‘ecosystems’?
Robert: “At Versicherungskammer Group we believe in prevention, that why we attach great importance to avoiding damage in the first place. We are always looking for innovations and digital ideas along the entire value chain to further enhance our products and services.
At its core, an ecosystem brings together all relevant partners that are contributing to the solution of a certain challenge for an industry, or even across industries. Mostly they focus on customer journey and how it can be optimized. We see that happen for the insurance and health sector for example. This summer pharmaceutical giant Roche entered a strategic collaboration with ITHM, to promote digital solutions that improve the day-to-day care of patients.”
In your view, what trends are driving the growing importance of ecosystems?
Robert: “Looking at this from a customer and service point of view, we have to ask ourselves: What does service mean for the insurance sector in the age of globalization?
The well-known digital companies shape the service experience and expectation of our customers. More than that, they are already working on data-driven insurance business models. Companies as Amazon have established themselves as symbols of relevance and responsiveness in the online marketplace. These brands define the benchmarks for experience, services and fulfilment of consumer needs. Customers are delivered with the value of their choice, when and wherever they want it. Any day. That creates confidence and trust. To stay relevant and develop customer-centric offerings, we need take a look beyond industry boundaries and understand what the problems are that our customers are trying to solve. ‘Thinking ecosytems’ is key to get us thinking outside of the box, to achieve the change we need.”
You mention the likes of Amazon, or broader, the often mentioned global digital companies. We quite often get the question ‘when will the insurance industry be uber-ized?’ ...
Robert: “Safety is a basic human need, and this will remain so in the digital age. However, the biggest challenge for the industry is still to evoke the feeling of urgency in ones’ own organization, to question the viable financial business model based on that need.
Perhaps the insurance industry is ‘lucky’, that we are being hit late, or at least later, by digitization. So we are able to learn from the mistakes established players have made in other industries. Especially within the retail industry, there is a great number of companies that have shown that the inability to identify relevant trends and adapting their business model will vanish with time. So, the challenge is to build platforms and ecosystems will endure, that enable partners to think outside of the box and accomplish things, that haven’t been possible in that marketplace before.”
How important are insurtechs in the development of platforms and ecosystems?
Robert: “Insurtechs are a vital partner to work with, especially because these smart and courageous founders are not afraid to question established business models and processes. They may not have centuries of experience, but that allows them to think freely, as I said before, outside of the box. They have developed data-driven products and established a time-to-market that meets the ‘amazionified’ needs of customers.
We have been able to realize various projects with insurtechs. Yet, one stands out in particular. Together with FairFleet - a startup for services with drones - we assessed hail damage to church facilities. The proof of concept showed excellent claim footage. FairFleet subsequently was integrated as a service provider. Yes, insurtechs profoundly change the rules of the industry.”
What, in your view, is the most critical success factor with regard to developing ecosystems?
Robert: “You need a solid environment to develop and validate new business models and solutions. You need the will and manpower of the industry, investment opportunities as well as the support of R&D institutions, if you want to build a lasting ecosystem.
This is another reason why Versicherungskammer co-founded ITHM. By working with startups, corporates, top universities, research centres, investors and the government ITHM offers that environment.”
Many of our readers are executives of large or midsize insurance companies as well. You already mentioned ITHM a few times. Can you share how ITHM is helping carriers like Versicherungskammer to stay in the frontline of insurance innovation?
Robert: “Through ITHM we gain access to a global network of startups and innovation intelligence. It enables us to focus even more consistently on the needs of our customers.
Through ITHM’s accelerator programs we are able to analyse over 50 startups in detail each year, evaluating concrete business models and cooperation opportunities. The quality of startups selected is unparalleled, compared to any other insurtech program in Germany.
This ecosystem of ITHM creates great opportunities for us to develop innovative solutions and test technological applications alongside talented and ambitious founders. We are happy to support the insurtechs with our industry knowledge and economic expertise as a strong, experienced partner as Versicherungskammer. This creates new impulses to both sides. However, this knowledge exchange can make us vulnerable. It is up to us to identify the best fitting partners to share our valuable knowledge with and create lasting relationships for the benefit to our customer.
The role as chairman of ITHM’s advisory board gives me the chance to involve myself personally and drive change from within the industry.”