There is probably no more oversimplified and overworked word in the insurtech industry than digitisation. It has seized the cultural zeitgeist of insurers across the globe as the be-all-and-end-all of modernisation.

It’s not hard to see why. E-commerce and ever-more-sophisticated APIs have cemented digital as the standard means of communicating B2B and B2C. As it stands, around 62.5 per cent of the world’s population uses the internet, more than half of whom access it through their smartphones, according to DataReportal’s Digital Around The World research report. And, looking at just one type of insurance, in just one country, in 2019 Statista found that over half of the UK population bought vehicle cover online, 62.4 per cent of them drivers over the age of 65. There are 20 million households with motor insurance in the UK – the maths speaks for itself. Digitisation is something insurers couldn’t ignore.

From automating onboarding through to claims, and developing tools built around Cloud-native platforms, digital insurance is now at scale. So, where does that leave the traditional human agent, who’s powered this industry for so long? Dead in the dust, trampled by an army of robots?

No, very much alive and kicking, according to wefox.

Founded in Germany, in 2015, by CEO Julian Teicke, CFO Fabian Wesemann and CRO Dario Fazlic, the insurtech’s primary focus currently is property and casualty, auto, and household products, underwritten by Munich Re. By using sophisticated technology and automating 80 per cent of its processes, it’s built one of the biggest insurtechs in Europe, last valued at $3billion – and all of that via a network of brokers with blood, not data streams, pumping through their veins.

“Clients want digital services. They want to be able to reach insurers on Sundays while sitting on their couch. But, they also want a physical touchpoint,” says Tomaso Mansutti, also head of international partnerships at the company.

Working through more than 3,000 brokers, both exclusive agents and partner advisors, wefox’s B2B platform relieves them of the administrative burden of sales and claims management, allowing them to concentrate on their customer-facing advisory role – in effect, acting as the human face of wefox. At the same time, the carrier’s online reach puts the agents in touch with a much larger customer base than they’d be able to achieve on their own.

It’s a mutually beneficial relationship, says Mansutti.

“Technologies are not only a more effective management of all the lifecycle of a policy, but also a smarter and faster engagement with the clients, delivering them what they demand and expect.”

A SYMBIOTIC RELATIONSHIP

Last year, PropertyCasualty360 published its 2021 Independent Agent Survey, in which it found that many agents believed technology was an asset – but in some areas more than others. When asked what part of the agent client experience was best-suited to an online service, 85.5 per cent said the payment of premiums, while 68.6 per cent thought answering routine questions was also better executed via online channels. These findings mirror other customer preference surveys. There is clearly an acknowledgement that repetitive admin tasks are best streamlined with AI and machine learning solutions, for the benefit of agent and policyholder.

But the survey also found an overwhelming majority of agents (78.8 per cent) believed one area where online services couldn’t out-perform humans was in establishing client trust. That finding aligns with the importance that customers, of all ages, attach to their intermediaries. A 2022 report from Agentero, The Age Of The New & Improved Intermediary, found that 78 per cent of consumers who had worked with an insurance agent before would do so again – and this from a sample of 1,000 respondents, aged from 18 to 75.

That said, there was a fair amount of scepticism among Gen Z respondents. They were more likely than any other age group to question the impartiality of intermediaries when offering advice, and were less convinced that their insurance agent really understood their needs. For these younger, digitally native customers, then, perhaps the more digitally advanced a product is, the more reassured they will be.

For wefox, the agents’ needs and the clients’ needs are not that different. Like customers, agents value options and support. Providing them with a platform where they have access to real-time data and predictive tools benefits their relationships with customers because it gives them more evidence to decide on an insurance product, one which the customer can agree is the right one. And insurers similarly need to cultivate a level of trust with the advisors they work with so that, together, they can optimise product delivery.

That’s why wefox spends time cultivating its broker network. Advisors who act exclusively for the insurer are not only offered paperless sales tools and lead generation, they’re also plugged into what wefox describes as ‘a big family’, a non-hierarchical organisation with a personal advisor and training and specialisation offered as the agent builds their own sales structure. Those who opt for a partnership arrangement have a dedicated portal, straightforward rates and contracts, access to fast claims processing and the ability to offer customers a self-managed digital account.

“We give them the fertile soil where they can plant their talents and make them grow,” says Mansutti. “By giving them an area where they can expand their capabilities and collaborate with others, we make the whole group grow, too, because it’s not only a question of working by themselves, but around others.”

The human-plus-machine formula clearly works; wefox is one of the fastest-growing insurtechs in Europe, live in five countries with 500,000 customers, and expected to tip into group profit in 2023. The majority of that growth came after the end of 2019. The events of the following year short-circuited a number of insurance processes previously performed manually, like onboarding and verification; adopting digital alternatives was less about experimentation during the pandemic and more about making the process as remote as possible to contain the virus. But it also prompted an increase in demand for new types of insurance. EY’s Global Insurance Consumer

Survey In Times Of COVID-19 found that 68 per cent of respondents were interested in usage-based insurance for cars, for example, with mileage and Internet of Things (IoT) technologies used to inform policies. Cyber and subscription-based insurance are also relatively new to the sector, but have skyrocketed in demand; for cyber alone, the global market is predicted to exceed $20billion in gross written premium by 2025.

Advisors need support to meet this changing market, says Mansutti. “Our platforms help these advisors deliver the best policies to their customers, and we also provide risk mapping for clients – it’s not just the selling of the product, but understanding their needs.”

He sees a future in which the IoT and insurers using real-time data will increasingly educate consumers, not only on the type of product best suited to them at that moment, but also on understanding the risk. The wefox broker network can help to do that.

“There is currently no effort, for example, being put into understanding your car,” says Mansutti. “This is important for the future of autonomous driving. Being able to understand the advanced driving assistance systems will help you understand which car to buy. And insurers need to arrive at the moment when the client is assessing the risk – whether it’s buying a car or a house, we need to be present with the best state-of-the-art products to help them.”

While wefox isn’t alone among a third wave of insurtechs to leverage the broker network, it’s been particularly successful in finding a model that extracts value from the component parts of a
human-and-machine, hybrid solution. The robots might be coming, but as equal partners, not a threat.

Source: FF News