Insurtech trade fair: Ideas for fair insurance of the future

Start-ups in the insurtech sector want to use new technologies to change the business models of the insurance industry. But what exactly should the insurance industry of the future look like? This was the question that was the focus of the fifth Hamburg Insurance Innovation Day (HIID). The conference was opened in the Hamburg Chamber of Commerce by Eberhard Sautter, Chairman of the Hamburg Financial Center Association and the Hansemerkur Insurance Group. The event was once again organized by the Institute for Transformation and Further Education in Insurance (ITW), a spin-off of the Hamburg School of Business Administration (HSBA). The moderator was Florian Elert, Professor of General Business Administration and Head of the Bachelor’s degree program in Insurance Management.

Generative AI for insurers and insurance brokers

A total of 15 young companies presented themselves to the approximately 300 trade visitors to HIID 2024 on Tuesday. Among other things, they presented their unconventional approaches to policy portfolio management and the potential of cloud computing for the financial sector. It also deals with practical applications of findings from behavioral economics for the future of business with so-called embedded insurance policies and in the management of omnichannel sales. Another focus was the potential of generative artificial intelligence for the service processes of insurance providers and brokers in Germany, as well as means of combating the shortage of skilled workers that is increasingly threatening the German insurance industry.

Telematics tariffs for loss-making car insurance

In the keynote speeches, Klaus-Jürgen Heitmann, CEO of the Huk-Coburg Group, discussed developments in the field of mobility. German motor insurers are expected to make a loss of up to 2 billion euros this year, according to the German Insurers’ Association (GDV). According to Heitmann, telematics tariffs, which reward safe driving behavior, appear to be a glimmer of hope in the current crisis for many providers in the currently loss-making motor vehicle sector. In contrast, parametric policies are becoming increasingly important in order to cover the increasing climate risks. This is because they become due when certain parameters occur, regardless of specific damage – such as specific (bad) weather data.

Alexander Bockelmann, IT director of the Baloise Group, then spoke about “Innovation in an insurance group – balance between core business and future trends”. The Berlin-based insurtech company Friday, founded with their financial help seven years ago, launched the first car insurance policy in this country where customers pay per kilometer driven. The digital insurer says it has currently cracked the 250,000 contract threshold, but is still making a loss. Baloise continues to rely on motor vehicle insurance, but will also grow with service offers for drivers that are carried out by cooperating service providers. Because: “Insurance only accounts for 10 percent of all spending in the mobility market,” explains Bockelmann.

Insurer Baloise advertises itself in a computer game

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“We therefore asked ourselves: How do we get to the other 90 percent?” Bockelmann continued. The answer was surprisingly unconventional for the German insurance industry: At the beginning of the year, Baloise temporarily opened a general virtual agency in the video game Grand Theft Auto V as a “learning journey” aimed at young people, reports the IT boss. In-game products offered in the PR campaign included liability and fully comprehensive insurance tariffs – as well as legal protection insurance, which reduces the time spent in prison in the game. “That’s important because Grand Theft Auto is set in a specific field,” he joked, to the amusement of his audience on the HIID stage. “It didn’t cost us much money, but it brought us a wave of 150 press articles that we hadn’t expected.”

In addition, Baloise said it recorded a total of around 18 million contacts with its appearance in the computer game. Many digital lifestyle brands are better positioned in the new media than most traditional companies in the insurance industry. Joséphine Chamoulaud, head of the online insurer Smile Insurance, explained what the current market leader could learn in particular about the so-called customer journey – from the initial interest to the final conclusion. They then took part in a panel discussion on the “Future of the Insurance Business Model”. Moderated by HSBA Professor Elert, Dirk Weske from the board of the Hamburg consulting and software company PPI also took part.

In addition, Baloise said it recorded a total of around 18 million contacts with its appearance in the computer game. Many digital lifestyle brands are better positioned in the new media than most traditional companies in the insurance industry. Joséphine Chamoulaud, head of the online insurer Smile Insurance, explained what the current market leader could learn in particular about the so-called customer journey – from the initial interest to the final conclusion. They then took part in a panel discussion on the “Future of the Insurance Business Model”. Moderated by HSBA Professor Elert, Dirk Weske from the board of the Hamburg consulting and software company PPI also took part.

Large insurers can learn from small insurtechs

Weske noticed that many German consumers have a particularly short attention span. “It is an art to motivate customers until the final purchase.” The biggest problem in sales is therefore a high drop-out rate. “This has great potential to win back customers who have dropped out,” says Weske. “But today this only works with digital processes so that you don’t get bogged down in the process.” The continuously decreasing number of German insurance brokers has to expect to look after more and more customers. Weske sees small helpers based on artificial intelligence (AI) as the “key to brokers being able to operate successfully on the market.” The fact that a major AI revolution has not yet taken place is sobering.

Evi Popp and Eric Bussert were also on the HIID podium. They are the executive managers of the Talanx Group’s Neues Leben insurers and Hansemerkur’s sales departments. While Popp says he sees a trend from exclusive sales organizations (AOs) to multiple agent status, Bussert disagrees: “I’m not seeing a major shift in the market.” The AO has bright prospects if it can use AI.” In the future, sales will also have to adapt to increasingly better-informed consumers: “Hardly any customer hasn’t read up on Check24 before a consultation.” It is therefore important to be well ranked on the major comparison portals. But even in ten years’ time, there will still be personal service, which accounts for around 50 percent of advice, Popp expects.