AI & AUTOMATION So, what does wealth management have to do with insurance? Nucoro describes itself as working with a wide range of financial services businesses – including banks and insurance providers – who want to be more agile, efficient and able to rethink what’s possible in the future. The company’s website boldly proclaims: “We believe in the power of technology to transform the way business is done and how clients are served.” And perhaps nowhere is such an ethos more needed than in the insurance industry, a sector particularly hard-hit by legacy problems – both in terms of technology and mindset. The benefits of technological innovation for insurers, on the other hand, are well documented, with automation streamlining
checking why he had failed to respond. When the policyholder phoned to discuss his policy they ‘didn’t know who I was’. Adding bolt-on services, such as wealth management solutions or on-demand insurance for ‘micro-events’ such as borrowing a friend’s car, can not only help to diversify an insurer’s offerings, but also enable it to leverage the personal touch that has made building digital finance products so attractive to retail clients.
Customers: the big disruptors A recent study by Deloitte backs up the importance of engaging, and re-engaging, clients. A Demanding Future: The Four Trends That Define Insurance In 2020 observed that the biggest disruptive force
Extending the market: High net-worth individuals have access to seamless mobile and web apps
areas that are historically slow or admin-heavy, like KYC and onboarding. This, in turn, can improve delivery of service and reduce the provider’s overheads. But in addition to enhancing infrastructure, technology can also be used to supplement services – which is a great tool to attract new clients and promote customer stickiness in an industry often defined by little contact with customers. In its The Future Challenges Of Insurance white paper, Nucoro describes the industry as featuring what it calls ‘long-term, low-touch relationships’. This can prove problematic when building up customer engagement, something increasingly important for financial services providers in the digital age. The white paper shares a real example of a customer with a life insurance policy, which he had held for 10 years. For six of those, the policyholder had no communication from the insurer, because the company had been mailing to the customer’s old address and not
TheInsurtechMagazine | Issue 4
facing the industry was not technology, but customers themselves. It concluded that, in an age of immediacy where loyalty is no longer a given, the industry has to expand beyond its core offering to retain its customer base. Insurers believe that nearly two-thirds (62 per cent) of consumers regard non-insurance products as the most important factors when choosing an insurer, Deloitte revealed. Meanwhile, 57 per cent of providers think that access to friendly and knowledgeable staff for help is the most effective way of maintaining customer loyalty. So, instead of forcing customers into an industry’s narrow definition of their needs, it is clear that digitally-capable insurers can benefit by coming up with new ways to utilise customer data to improve engagement and delivery of their services. Indeed, client and customer expectations were very much the reasons behind SRC’s launch of the Opsion wealth management solution. “The logic behind Opsion is two-fold,” says
Richard Racine, managing director at SRC, which is a subsidiary of European insurer SIACI Saint-Honoré, and the leading pension broker in the French part of Switzerland. “The first concerns the expectation of companies. They are looking for flexibility in the management of their occupational pension plans. Our customers have approached us several times in this regard,” he adds. “Secondly, the French-speaking Swiss market only offered one solution, which did not meet the needs of our customers. We therefore decided to launch an open architecture fund offering two schemes, differentiated by the degree of autonomy and choice available.” The flexible solution enables companies to create bespoke occupational pension solutions within Opsion, while also benefitting from shared structural costs, cost-effective negotiated frees and the transfer of risks. “They therefore have the freedom to choose their pension plans, their conversion rates and other technical parameters, the reinsurer and actuarial risk coverage, as well as the investment strategy,” adds Racine. Digitally-engaged, high net-worth clients also benefit from an enhanced user experience, with seamless mobile and web apps, detailed portfolio management and visibility, including fees and payments for each client and automatic reconciliation of positions, with a direct link to an advisor, should they need one. A shorter, 10-minute onboarding frees up Opsion brokers to concentrate on added-value services, too. The insurance industry has faced unprecedented disruption in recent years, which has only been heightened by the coronavirus pandemic – particularly in the property and casualty sector. But all is not lost. By bringing together insurance and products such as wealth management, insurers can re-energise their client base and increase their brands’ stickiness. Meanwhile, companies can also improve and streamline their back-office operations by leveraging automation and structuring their business models to enhance human added value – just as SRC did with Opsion. Becoming digital does not require changing the very essence of the insurance business model. But it can help make a company more agile and attractive to customers, which any insurer looking for future growth must embrace – to the benefit of everyone. www.fintech.finance