Q&A with Dr. Robin Kiera on Transforming the Insurance Buying Experience

Digital Transformation - January 8 2020

Robin Kiera, Ph.D. is a renowned Insurtech expert, author and influencer, reaching millions each month on Linkedin, Twitter, YouTube, and his platform Digitalscouting.de, which supports insurance companies and banks in digital transformation. IBM named Dr. Kiera as one of the top 10 global influencers in digital transformation in 2019. We sat down with him to ask a few questions about emerging trends in insurtech innovation and insurance sales and marketing.

Dr. Kiera, you regularly speak at technology and insurance conferences around the world. What are the key challenges facing the global insurance industry today? What keeps insurance executives up at night?

The insurance industry lives in a paradoxical situation. On the one hand, customer behavior, driven by the expansion of the mobile Internet, has changed dramatically. On the other hand, this change has not yet lead to the implosion of revenue – unlike in the music, movie or retail business.

So, decision makers need to maintain existing business that drives billions in revenue and prepare for the future to set up business models and products in order to become the Netflix, not the Blockbuster, of insurance.

One approach could be to become the trusted partner in the everyday life of our customers by providing useful digital products and services, as well as helpful audio, video and written content on a massive scale for free. To achieve this, we need to change our mindset significantly.

You started your insurance career as an Allianz sales agent, selling insurance policies in German living rooms; later you led large transformation projects at various insurers. How has the business of selling insurance changed since you started and how is the industry progressing when it comes to digital transformation?

Almost nothing has changed. In the fall of each year, decision makers sitting in corporate headquarters meet and decide on the sales goals. These goals are broken down into how many accident and car insurance policies a certain type or even individual should sell – all of this without taking the needs of the customer into consideration.

At the end of the sales cycle, sales agents are being rewarded based on how well they met their centrally set sales targets – not how well they consulted the customer or whether they sold products that actually fit the individual needs of that person or business.

In order to substantially change the perception of insurance agents, from greedy people in polyester suits towards trusted partners who don’t rip the customer off to fulfill a sales target, but rather build up a substantial long-term relationship, we would need to change the way we reward and measure our sales force.

Besides the agent and broker sales channel, direct sales and sales through ecosystem partners have already changed the industry. We have seen the rise of aggregators, who have done a splendid job of positioning themselves as “neutral” comparison sites, making insurance products transparent for the customer.

Sidebar Fun Fact: One thing that has not reached wide parts of the population yet is that insurers can buy leads from a lot of aggregators and influence their ranking – not with outstanding coverage but with payments.

In a recent article, you wrote that the insurance industry often relies on “proven” tools, tactics, and technologies which reinforce the ways “we have always done it.” You give the example of insurers spending the bulk of their massive IT budgets on maintaining legacy systems instead of investing in new tools, technology and tactics. How can large, risk-averse insurance carriers and brokers truly embrace innovation in a meaningful way?

I fear I disagree. A lot of insurance carriers have quite a risky strategy: doing nothing or doing not enough. 

In Hamburg, where I am from, we have a saying: “The fish always stinks from the head,” meaning that all organizational problems start from the top. So, in order to embrace innovation, it’s urgent to transfer a significant part of the advisory board and C-suite positions to experts and leaders that have actually already built successful digital strategies, companies and products. There should be no need to underline that insurance companies shouldn’t hire that new CEO from a competing insurer, but from outside the industry.

There are a few insurers who – driven by young or young-minded decision makers – substantially invest in the future. Their main challenge is to mobilize their workforce. Some are successful by hacking the attention of their employees – often outmaneuvering middle management. So, they produce a lot of audio, video or text content and distribute it internally and also externally, showing their organizations that they are serious about change.

Insurance carriers and brokers collect mountains of data, but they still struggle to gain the insights needed to accurately assess and price risk. If you had to give the industry a report card, how well do insurers harness “big data” to manage risk today?

Let’s look at this question in terms of digital sales and marketing, and the experience insurers provide their customers online. There are still multibillion-dollar carriers out there that have no tracking on their website homepage and zero conversion optimization. A lot of insurers still don’t offer most of their products to buy online. Considering that, it’s too early to talk about “big data.” On the report card, there would be an “F” for failed, because of too many classes missed.

The potential, though, is gigantic. Instead of harassing customers with sales calls or once-a-year talks to “optimize” their insurance policies, we should start to listen to our customers. Very successful agents and brokers have done this for decades. Technology now allows us to automatically listen to the desires and needs of our customers on a massive scale. Due to modern technology, we can automate the development of highly individualized products and communication. We can answer those customers that prefer email with an email, those who prefer a video with a video, whatsapp with whatsapp, and so on. And those who like a sales call in the evening, well, they can get a sales call – even though I fear this last group is quite small!

What do you see as the next big breakthrough in insurtech that carriers and brokers need to prepare for?

Technology allows us to increase the touchpoints with the customer from one complicated letter or sales call a year to becoming part of their daily lives. We can do this with applications or audio, video and written content distributed via the channels that customers prefer.

Those carriers who can “hack” the attention of their customers, while also providing massive value, will see a significant increase in sales because the customer will approach them in the moment of need, recalling the brand he or she values. Since almost no insurer is doing this today, there is a tremendous opportunity here.

Take out your crystal ball: What do you think the insurance industry will look like in 10 years?

Worst case: Tech companies and reinsurers enter the direct insurance market, gaining significant market share. This happens while most carriers limit themselves to superficial modernization initiatives. Remember that a few insurtechs and fast-moving incumbents have already successfully attacked significant parts of the insurance value chain.

Best case: More and more insurers fill their top management positions with experts and leaders from digital industries, modernizing their value proposition and product portfolio significantly.

Under this change of leadership, insurers develop a wide range of new digital products and services, winning the hearts, minds, and screens of their customers. Now insurers are the respected lifelong partner of customers around the world. When our customer has a problem, they call us. With this approach, most attacks on insurance revenue streams could be successfully repelled.


Robin Kiera

Dr. Robin Kiera is one of the world’s most well-known Insurtech experts and influencers, and the founder of Digitalscouting.de. IBM named Dr. Kiera as one of the top 10 global influencers in digital transformation in 2019. Follow Robin on Twitter, Linkedin or Tiktok.

 

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