Digital channels ahead of traditional sales structure
Unlike in Germany, there are currently hardly any InsurTechs on the market in Austria. Our managing director Ingolf (Putzmann) talks about reasons for this, as well as the future needs of insurers and customers in an interview with fairmedia.
In Insurance Radar 2019, Oliver Wyman and Policen Direct singled you out as one of 20 companies in the insurance industry. You are also among the top 100 InsurTechs. How did you get here?
Ingolf: We were very lucky to meet the founders of Dextra Rechtsschutz AG as early as 2012. Together we then built up a digital insurer in 2013 that remains very successful to this day. sum.cumo is responsible for the core system, the frontend and the operation of the IT platform.
With this success story behind us, it was easy for us to convince large insurers in Germany who were looking for new technological solutions. In addition, we then had to manage our growth and especially the recruitment of new employees. Since 2016, we've grown by a factor of 5 and continued making money. This hasn't escaped the authors of the major InsurTech studies.
What requirements do insurers currently have?
Ingolf: Insurers have understood that they must change their IT platforms and their working methods if they want to be successful in the future. At sum.cumo we've positioned ourselves in such a way that we're able to advise insurers on digital business models and then start implementing them seamlessly. Through our cooperative development approach together with the client, we make an important contribution to organisational transformation and can more or less guarantee success: We rely on proven product solutions that we've developed in recent years and that we can build on.
In comparison: What do you think policyholders expect from sales and service, and how does this fit in with insurers' requirements?
Ingolf: Insurance is not and never will be a product for everyday use. Nevertheless, the policyholder applies experience with other industries to the sales and service of insurance companies. There's a general trend for consumers to want to be selfsufficient. They want insurance online, they expect an easy-to-use customer portal and they want to have transparency about the processing in the event of a claim. Insurers are slowly coming to terms with the fact that digital channels must complement the traditional sales organisation and call centre. But old systems and processes hinder rapid implementation.
How do you perceive the market / mentality in Austria regarding InsurTechs? What are your experiences in Germany?
Ingolf: In Germany, competition is much more intense. This means that there are more insurers here than in Austria who take the entrepreneurial risk of trying out something new. As a result, we now have a lot of digital products, many of which have been developed in cooperation with InsurTechs. In principle, I don't believe that consumers in Austria are any less interested in inhouse services than Germans or Swiss. The use of digital products depends on the services provided. In the medium term, Austrian insurers won't be able to escape customer expectations either. Otherwise they'll have to deal with new competitors from abroad. Our customer nexible has already demonstrated that tech insurers can expand internationally without much effort.
In which areas (sales / services) and divisions (automotive & co) do you see particular potential?
Ingolf: The potential of digital distribution over the next three to five years shouldn't be overestimated, as personal sales for complex products will still play a major role during this period. As far as services are concerned, it's important to realise that current processing methods stand in the way of complete automation. To achieve competitive cost ratios, business processes towards customers and sales partners must be digitalised - and made available as fully self-service as possible. Transaction intensive products like cars, for which there is an active demand from customers, are better suited to this than, for example, pension insurance.
What will claims settlement look like in the future and to what extent will services such as video appraisal play an increasingly important role?
Ingolf: Loss adjustment is the main lever for increasing profitability and improving customer satisfaction. At present, it's possible to determine the loss amount using artificial intelligence. This makes it possible to settle a claim in fractions of a second after the claim is received. This isn't just efficient, but also offers a high level of customer benefit.