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How digitalisation brings customers closer

The Corona pandemic has forced us all to adapt. When home office is compulsory, we work at home, the car stays in the garage and we no longer need to use our transport passes. We reschedule or cancel holidays in the event of sudden restrictions or quarantine requirements. We have also become more accustomed to doing many things online and on the move. In fact, many of us have come to appreciate the advantages of this and now expect offers that are adapted to our new circumstances. We've become more flexible, and we expect flexible customer journeys, as well, from service providers.

But can service providers keep up with customers' changes in behaviour? There are signs of this. The first motor vehicle insurance policies that adjust premiums to usage are already on the market. Since the coronavirus emerged, travel providers have been offering more flexible rebooking options, though I am not aware of any travel insurers that adjust premiums when people are not travelling.

What is clear is that innovative service providers that have a digital strategy from the outset can quickly adapt their services to new needs. Meanwhile, established service companies may take a little longer to adapt their well-established processes to changing demands. What we see at Swiss Re, however, is that digitalisation is an ingenious lever to develop more intelligent solutions and digital products that help us deploy the risk know-how that we have acquired through years of experience.

Digital insurance on the rise

The re/insurance industry is in the midst of a digital transformation. The goal of this transformation must be to enable re/insurers to create risk protection that is adapted for new needs in order to make society more resilient. The digital transformation can be clearly seen at the points of contact with end customers. For example, fully digital purchase processes for travel and vehicle/car insurance are now indispensable.

Moreover, we also have solutions so that consumers can obtain complex insurance products such as term life insurance online. In the US, a full 57 percent of policy holders bought life insurance online last year, according to the study "US consumer life insurance trends 2020" by iptiQ and Insurtech insights, compared to just 24 percent in 2010. In the German market, the share of those buying life insurance online doubled in the same period to 20 percent.  

We have also upgraded technologically for underwriting. Ten years ago, risk questionnaires were still sent in and checked manually in nearly nine out of ten cases. Today, this is done online for 45 percent of customers. The Magnum risk analysis and assessment tool from Swiss Re enables such an automated risk assessment.  With this tool, our clients can calculate a price, go through the risk assessment and conclude a contract in 15 to 20 minutes.

Claims processing within minutes

Swiss Re is investing in digitalisation to make life easier for customers at all stages of their journey, including in claims processing. Swiss Re and One Connect's end-to-end vehicle insurance, for example, uses photo recognition technology and algorithms that predict costs. Within minutes of receiving a photo claim, it determines a repair strategy and costs, and can also make a pay out immediately.

I am convinced that with better digital risk knowledge we can create even more seamless customer journeys. The satellite-based solution for natural catastrophes from Swiss Re and the satellite operator ICEYE does not require any damage photos from the insured. It records floods in high resolution even in complex terrain such as urban centres, where conventional flood modelling reaches its limits. Swiss Re gains access to data within 24 hours of an event and makes it available to partners on the CatNet® Premium platform. This enables them to record the damage more quickly and initiate payments. There are plans to extend the monitoring to other kinds of natural disasters, as well as to use it as an early warning system.

As we seek to provide better services for our customers, digital technology helps us simplify processes and make the cooperation even more productive. At the same time, data knowledge allows us to tailor products more individually to customers.  

For insurance customers, this also means adapting premiums to their personal circumstances and needs. Telematics data, for instance, enables motor vehicle insurance to be priced according to driving behaviour. The Automate Insurance app, developed by Swiss Re subsidiary Movingdots, automatically records journeys and recognises behaviour patterns such as abrupt braking, rapid crossing of junctions or mobile phone use while driving. At regular intervals, Automate receives data on customers' driving behaviour and uses it to calculate discounts that are subsequently credited to customers for upcoming premiums. In addition to this "pay as you drive", Automate also offers a "pay what you drive" insurance, with premium discounts for driving less than 15,000 kilometres.

Every interaction brings new insights

We are only at the beginning of use- and behaviour-dependent insurance innovations. The development of additional interactive services is also still new territory for the insurance industry. One such service is personalised coaching and tips for safe driving, offered by the smartphone app Blablacar Coach from Swiss Re, the community-based travel platform Blablacar, and the car insurer L'olivier Assurance.

The more interactions we have with customers, the more individualised customer journeys we can create. Swiss Re's goal is to understand customers' risks in ever greater detail as the volume of data increases, so that we can offer more effective prevention services and better prepare society for risks.

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