Digital insurance distribution – enabling instead of forcing
An online shop with insurance products – this is how one imagines the digitalisation of insurance. However, one important feature is often forgotten: Insurance sales are individual – there is a wide range when it comes to the level of knowledge of the customers. As individual as the customers are, the path to conclusion must also be individual. Not losing this individuality in the digital context is esurance’s “Mission Possible”.
Trust is in the foreground
About 5 to 10 % of entrepreneurs can and want to take care of everything themselves when it comes to insurance. The majority, however, do not want to go completely digital when taking out insurance. Why is that? SME insurance is complicated and few want or are able to understand this complexity. Therefore, this competence is often delegated to brokers or agents. End customers want “peace of mind” and trust is the key. Whoever takes out an insurance policy is basically buying the promise that in the event of a claim, it will be paid. Trusting a human being feels much more natural than trusting a machine. And the higher the complexity, the greater the scepticism towards the machine.
This is something we at esurance have had to learn over the years. In 2013, we started with the idea of “ebanking for insurance”. We didn’t get very far with the assumption that all end customers would want to go through the entire process digitally in any case.
Today, we are a B2B2C platform that connects SMEs, insurance companies, technology partners and sales organisations. In doing so, we offer the end customers who want to do everything themselves the appropriate digital path. For the majority who do not want to go all the way digitally, we have developed a hybrid model where SMEs also have access to traditional insurance advice. The special thing about this is that the application or the path is the same. So we empower the sales organisations and also provide them with first- and second-level support.
How has esurance found this gap to optimise insurance distribution?
In 2022, insurance will still not be bought, but sold. For insurers, this means that many potential customers want contact with an advisor, especially in the SME sector. The need for complete digitalisation is not yet foreseeable today. As InsurTech, we don’t want to completely reinvent the insurance landscape, but we do want to use the technological possibilities to further develop what already exists and achieve a new target image in as few steps as possible.
Let’s take the example of our platform solution that we developed for the hospitality industry. By digitising existing solutions such as accident insurance, daily sickness benefits, property/occupational damage, liability, pension fund and compensation fund and putting them together in an overall package, we were able to enable several providers (Gastrosocial, Baloise, SWICA) to optimise their market position. This overall package enables restaurateurs to purchase all necessary cover on one platform. Thanks to the hybrid sales approach, it is up to the customer whether he wants to conclude this with the help of a personal gastro advisor or on his own. In both cases, however, the deal is concluded digitally via our sales platform. So we didn’t reinvent the world, we just enabled consistent customer centricity and reinterpreted the business case. The ecosystem was already largely in place, we just expanded it and networked it more strongly. On the one hand on the product side, on the other hand on the consulting side. Within three years, we gained 20 per cent market share. Today we know: We would not have achieved this growth with a purely digital approach.
The autonomy and a certain naivety that we have as a scale-up enables us to go far enough in such processes. This also includes trying things out, making mistakes and starting again from scratch. In recent years we have made so many mistakes that we have developed a culture that celebrates mistakes (if they are not repeated). Because that is the only way we have found the gaps that have enabled innovation and customer centricity to be sustainable. For esurance, digitalisation is not the end, but only the means to an end. This approach and culture allows us to act as a kind of speedboat in the insurance world. What is right for us can be dangerous for established players with profitable business models. To pivot to this extent and with this consistency and to draw consequences in time, as we have done at esurance, is a challenge for us.
Empower instead of completely digitalise
Personal advice is and will remain an important part of insurance sales, certainly in the near future. And we InsurTechs will continue to digitise meaningful areas, simplify processes and tap into micro-moments.
Our goal is to gain access to further micro-moments, i.e. moments of decision, through partnerships. Because if the needs of end customers can be captured digitally, our platform can create the bridge between the digital entry point and personal, hybrid advice. That is our understanding of “smart insurance distribution”.