Michael HAAS: Currently the pure online or direct digital sales of insurance policies is still limited in these markets. But that has also to do with the nature of the insurance business. If there is no relevance or need for consumers to buy insurance, then it is just not going to happen. However, it also can change quickly. Just two examples: Bancassurance: More and more loans are bought digitally, and it is obvious that insurance products need to be linked to the loans digitally too. And people using digital payments are easier to attract with interesting offerings and to utilize options to buy digital insurance in case they see any added value for themselves.
Wolfgang SCHWEHR: For me these changes in customer interaction/technological evolution are less of a question of developed / versus "developing markets". As you say these are global trends which we experience, and new technologies/new ways of customer interaction spread quickly on a global level. I have experienced people in Russia and the CIS as very advanced when it comes to the usage of new technologies and the digital offering of / interaction possibilities with their insurance partner will be key criteria for Russian/CIS customers in their insurance purchase. Digital sales will also make distribution cheaper which will have a positive impact on the price for insurances and thus make insurances more attractive to people. Many insurance companies in Russia/CIS are very much already looking into their digital offering and are quite well on track.
XPRIMM: What are the main growth paths for insurance companies in a demanding market environment?
MH: The best answer to specific and challenging demand is innovation and tailored solutions. This could affect both areas products and technology.
WS: Absolutely - fighting for the already existing pie of business by lowering prices would definitely be the weaker option. The insurance penetration, especially in private lines, in Russia/CIS is very low. Thus, it is about developing attractive new products/customer services and their smart distribution.
XPRIMM: New technologies are providing for a lot of opportunities, from product innovation to back office increased efficiency? In what areas do you think will they mark the most significant impact?
MH: Certainly, technology will impact existing processes most as it is much easier to improve the known i.e. efficiency comes first. Nevertheless, new technology could make innovative products only possible and create entirely new perspectives.
XPRIMM: How to deal best with changing regulatory requirements - Solvency II in Russia being just around the corner?
WS: Embracing these changing regulatory requirements instead of fighting against them. Solvency II requirements should not just be seen as the necessary evil but rather a chance to steer an insurance company based on state-of-the-art practices.
It will also be key for the insurance companies to involve themselves at an early stage in order to get prepared for it and to make sure regulation goes into the right direction.
XPRIMM: How can reinsurance help the Russian insurance industry to grow in L&H and P&C?
MH & WS: Both in L&H and P&C we have a long tradition and experience to help our clients with new and innovative solutions which had been already tested in other markets or with new technology. The Russian market has already benefited from it and we plan to further invest into Russia as we believe there is big potential for our clients to grow.
XPRIMM: Looking at the forthcoming years, what would be in your opinion the main opportunities and the main challenges in the insurance markets of the CIS region?
MH: Health will be certainly the biggest challenge and opportunity likewise. On the one hand the demand for better qualitative treatment will increase and on the other hand the state may have less budget available. The consequence will be that more and more from the public healthcare schemes will be shifted to the private insurance sector.
WS: The major challenge in the CIS insurance markets will remain the development of the individual economies. Limited economic growth impacts investments by companies but also the ability to spend money by private customers and thus limits their insurance needs/spent. The opportunity of course - and we all hope for it - is that the CIS markets return to a strong economic growth. New technologies / new ways of customer interaction will make insurance more attractive to customers and thus offer opportunities to the (re-)insurance industry.
XPRIMM: In July, Swiss Re has organized as every year its traditional Reception for the Russian insurance market. What would be the main conclusions drawn from your meeting with the Russian insurers on this occasion?
MH: We feel that there is a high interest in experiences from outside of Russia. Hence our clients highly appreciate to learn more about any relevant insurance matter. And, of course, it is always very interesting to exchange in a nice environment and to deepen our existing good relationships with so many clients always attending our event.
WS: During our Reception we had speakers on Digitization within the Insurance Industry, our experience with the introduction of Solvency II within Swiss Re and our support possibilities when it comes to product development. My personal highlight was our panel discussion including two high-profile Russian representatives of a "traditional" and a "Tech" insurance company and the question who of them will win the battle for customers in the future.