"IIF2017 - Insurance in the DIGITAL World" Conference took place in Vienna

14 November 2017 — Alexandru CIUNCAN
iif_2017_noi"IIF2017 - Insurance in the DIGITAL World" conference brought together in Vienna well-known insurance professionals from all over the world who analyzed the latest digital trends in the industry, taking into account the fast digitalization of the financial services providers' world, in particular in the insurance field, which is creating both huge opportunities and strong challenges for the players.

The discussions focused on three main themes: "Regulating the digital innovation", "Best practices for digitalisation", and "Innovation - the only way forward".

Michael BRANDSTETTER, EU & International Affairs, VVO - Austrian Insurance Association

  • 6 Austrian insurance groups are active in more CESEE countries, as strategic long-term investors
  • The VVO has a very long tradition with friends and partners in the Region. We fully believe in the potential of this region
  • Thanks to XPRIMM for all their activity for connecting international decision makers.

William VIDONJA, Head of Conduct of Business, Insurance Europe
  • Digitalisation is changing our lives. Technology is now changing the entire insurance value chain
  • Insurance companies need to adapt to meet the new requirements of insurance consumers: new, more personalised products, new market actors such as InsurTech companies etc. 
  • Insurance Europe recommends to make rules fit for digitalisation by future-proofing the existing regulatory framework, to have a more consistent approach and to secure consumer trust in digital innovation. This can be done through guaranteeing a certain level of consumer protection, by having an activity-based supervision and regulation and by an effective supervisory monitoring.
Paul CARTY, Chairman EU Standing, Committee of BIPAR
  • We are just at the beginning of the technological revolution
  • The starting point of the sector in the debate is that the "Same activity, same rule" principle applies. 
  • In the insurance value chain insurance intermediaries have always harnessed technology and will continue to do so.
Dieter PSCHEIDL, Head of European Affairs, VIG, Austria
  • EU templates such as KID or IPID will form templates for online aggregators which at the moment mainly offer price comparisons
  • From the IDD perspective, assessing the demands and needs of our customers has to be done through a legally non-formalised conversation with the customer that may be supported by digital tools
  • GDPR will provide for a new right of policyholders to ask the old provider of coverage to transfer their data to the new provider. This includes only generic data and not derived data (risk profiles etc.)
  • Unfortunately, there are still some restrictions for paperless interactions in the EU legislation.
  • Regarding motor insurance, we need to empower customer to choose upon vehicle data, as now we face the data monology of car manufacturers, thus ensuring equal access for all economic operations.
Luc NOUBISSI, Chair, Financial Inclusion Working Group, IAIS & Senior Insurance Specialist, CIMA, Gabon
  • IAIS-The International is a voluntary membership association that today represents something like 97% of the World's' insurance premiums
  • There are currently 26 Insurance Core Principles of the IAIS that provide a globally accepted framework for the supervision of the insurance sector. They also relate to digitalisation.
  • In example, supervisors need to have the authority and expertise in the technology field in order to understand the new developments in the market
  • Things are moving quicker than ever. All stakeholders should be prepared or react rapidly. Policymakers should be prepared to avoid a systemic failure through digital
Calin RANGU, Director, ASF - Financial Supervisory Authority, Romania
  • "Prediction is very difficult, especially about the future" - this is a well-known statement that sets the stage for the digitalisation of insurance
  • EIOPA and more national authorities decided to set-up InsurTech task forces that deal, in example, with topics such as Cyber Risks, BigData and beyond
  • The Romanian regulator, ASF has also started an Innovation Hub that will look at many different aspects related to digitisation
  • An IBM Institute for Business Value published a study proposing for 2025 four possible futures: a "swarm economy", a "central intelligence", an "Internet of Everything" and a "survival of the fastest". At the same time, other specialists are speaking about a move to the real BigData processors for manufacturing or distribution but also about the possibility of having a gradual but a clear "evolution without revolution"
Janez BENSA, CEO, PARSEK, Austria
  • Data analytics and m-health are vital to engage, acquire, and retain clients in the field of health insurance
  • There are certain challenges in what health insurance is concerned: in example, in healthcare, information is very much fragmented - so getting comprehensive information about a patient's condition and medical history is next to impossible. Also, documentation exchange between health insurance and care providers is not standardized. At the same time, transformation of healthcare services from analog to digital impacts the workflows and potential new services may emerge
  • In order to achieve engagement, healthcare services need to provide the right content in the right context
  • This is why, in PARSEK we are managing all of these challenges thru a system called Managed Care.
Alessandra CHIUDERI, Group Head of the Analytics Solutions Centre, Assicurazioni GENERALI, Italy
  • Times are difficult. There are plenty of challenges around for the insurance industry. This is why we understood that we need to expand the analytics boundaries and that we need to use the same mindset as other industries and to embed analytics into the insurance DNA
  • We started the Analytics Solutions Center in the Generali Group early 2016 in order to support technical excellence in this field.
  • The Analytics Solutions Center Mission has to support Generali Business units digital transformation through the development of data analytics, to address business challenges and to identity potential for growth
  • There are several ways to implement analytics in an insurance companies. Not all paths follow the same road.
  • Data Analytics activities supported by the Analytics Solutions Center had developed 38 projects in 13 countries so far.
Thomas SCHOLLKOPF, CEO ERGO Austria International AG
  • Disruptive changes in other industries show why we as insurers need to deal with the subject of digitalization (e.g. Uber, AirBnb, Facebook, Alibaba etc.)
  • Digitalization of existing business models is on every agenda but great efforts are still needed. It is also a part of the ERGO strategy programme
  • In Europe, as a consequence of digitalisation, there will also be new insurance products, such as micro insurances
  • High quality information on current and future technology trends is key for effective, strategic business decisions. We expect transformation by evolution and not by revolution
  • Amongst the ERGO Group digital activities: Digital Doctors (Spain) - used to give clients medical information via chat or video chat; iMonitor (Poland) - app-based tool that is used to steer the agency which enlarged our renewal efforts. Now also transferred to Russia, Turkey and Greece; Digital labs that are set-up on the ground, working with the start-up scene; Chatbot (India) - which was able to significantly decrease the number of call received because the clients got the information from the Chatbots; Nexible (Germany) - digital motor insurance company that was launched quite recently.
Michael THEILMEIER, Senior Vice president, Gen Re, Germany
  • 85% of the insurers have a digital roadmap, studies show.
  • You can make great predictions about the future but you can rarely imagine things that do not exist, such as abolishing computer monitors in the US to privacy issues and legal problems.
  • Changes are not linear. Uncertainty is part of our genes, which is great for making digitalisation really work.
Dante CAFARELLI, Executive, ALLIANZ Technology, Germany
  • Allianz has invested in creating its own Telematics platform instead of buying it from a third party
  • This offers several advantages to the company in comparison with its competitors
  • The young generation wants to gain fast access to new insurance products and we need to adapt to this trend
Michael BRANDSTETTER, EU & International Affairs, VVO - Austrian Insurance Association
  • Increase in cyber attacks, with global damages in excess of 261 billion EUR have contributed to raising awareness
  • Insurers can also be potential targets of cyber attacks but at the same time they can help clients to achieve cyber resilience
  • Lack of available data on cyber incidents and the lack of awareness of the importance of cyber security are the main challenges for insurance companies
  • Austria has a cyber security platform, which is a cooperation between public institutions and business community but also a Cybercrime-Competence-Center of the Ministry of Interior
  • In 2016 Austria had 13.000 complaints (+30%) on cyber security and more than 1 million victims of cyber crime. 72% of victims suffer psychological damages (incl. theft of identity). Financial loss due to theft of identity amounted to 1.200 EUR/victim while the financial losses due to internet fraud were in excess of 480 EUR.
  • VVO has a Cyber Working Group in place, which focuses on the development of non-binding sample insurance terms and conditions. At the same time, VVO works on prevention together with the Austrian Road Safety Board to map cybercrime in Austria. It also issued recommendation on measure individuals can take in order to prevent cyber crime etc.
Joe LOUWAGIE, Head of Strategy, VERISK, USA
  • InsurTech companies that will survive are those that have the best value proposition.
  • Low-probability value propositions are being targeted by VC
  • The growth in computing power is outpacing the ability to developed corresponding analytic solutions
  • 75% of insurance executives believe AI will "significantly alter" or "completely transform" the insurance industry in the next 3 years
  • Technology will allow us in the near future to know our customers better and optimise how the customer perceive great service
Bernard RETALI, President, LIMRA Europe, Middle East and Africa
  • Insurance penetration is low also because 66% of people do not buy life insurances as they think it is too expensive.
  • 35% of consumers expect to get products corresponding exactly to what they ask, according to a LIMRA study conducted in France
  • When not satisfied, 35% of consumers e-mail the service provider, 32% told friends and family while only 3% contacted a newspaper of a magazine. However, when satisfied, they are not as active. The "No" has a much bigger impact than the "Yes".
  • The power shift is changing but we as an industry we have more and more capacity to develop
Tudor GALOS, Senior Digital Transformation Consultant
  • GDPR will affect everyone directly, not only from a legal perspective but also from a digital transformation perspective
  • The Directive imposes new rules on organizations in the EU and those that offer goods and services to people in the EU or that collect and analyze data tied to EU residents, no matter where they are located
  • It included enhanced personal privacy rights, increased duty for protecting data, mandatory breach reporting and significant penalties for non-compliance
  • Companies collect some 4-5.000 data points on consumers and thus can identify people that can be influenced. This is why GDPR is so important. The main logic behind it is to put people in control of their data: to access their personal data, co correct errors in their personal data, to erae it, to object to processing it and to export it etc.
Mart JESSE, CEO of LKF and EKsL, Estonia
  • The system used by the Estonian Motor Insurance Bureau is connected to e-government
  • The information that it contains has to be stored for 30 years, according to the legislation
  • High level of standardisation was used in order to make business processes smooth and fast. So there is no need to carry the MTPL policy along and, at the same time, uninsured driving is below 0,5%
  • Thanks to the ADR mechanism Estonia has very few court cases in a year
Gerhard HAGENAUER, Member of the Board, NTT DATA, Austria
  • The concept of mobility is changing faster than we would imagine. As we are in Vienna, NTT DATA is working with the City of Vienna in a project to steer its mobility flows, simplify the people transportation especially when using several means of transport and in the end improving mobility in a sustainable manner.
Desislav DANOV, Head of Organization, Insuretech Sofia, Bulgaria
  • The GDPR, if implemented properly, will drive something like 80% of the Bulgarian market out of business. So I have no idea how will this Directive be implemented. Companies will probably need to move their business somewhere else because of this.
  • I foresee a cut in the workforce due to automation and the development of a lot of hybrid players such as Amazon or Google - which will lead to disruption.

Almost half of re/insurers (49%) consider that the "Digital Revolution" will have a visible impact on improving relation with customers (better knowledge of customers; closer contact with the public; more efficient servicing), while 27% see a bigger impact on improving underwriting and claims management. Also, 15% of re/insurers consider that the impact will be visible on improving the economic efficiency of re/insurers, meanwhile 1 out of every 10 re/insurers predict a bigger impact on enabling insurers to offer new products or better customizing the "classic" products.


The digital change in the insurance industry comes along with many issues and almost 1 out of every 3 re/insurers (32%) considers that the main issue will be the difficulties in changing of the corporate culture, while 28% think that the high costs of implementation will hinder the rapid advancement of the digital change in the insurance industry. Also, insurers' own legacy systems (21%) and the regulatory barriers (19%) are seen as issues to obstruct the industry's future.


Finally, almost half of re/insurers (46%) consider that the lack of talents - including in the management positions -, able to embody the new business philosophy is the main risk brought by the massive digitalization. Also, 1 out of every 4 re/insurers (23%) see a risk in the unpreparedness for the new developments that the "classic" risks may take in a closely connected, digitalized world. Meanwhile, 19% of re/insurers think that the massive digitalization will be increasing insurers' own exposure to the cyber risks, while 13% see the main risk in unpreparedness for the new developments that the "classic" risks may take in a closely connected, digitalized world.


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