ITC DIA Europe

Making insurance more accessible and inclusive

Written by Roger Peverelli and Reggy de Feniks - Founders The DIA Community on Aug 8, 2023

The insurance industry is changing – and the pace of change is faster than ever before. With tech companies setting new standards, insurers have to think outside the box to stay on top of fast-changing customer needs, as well as with the opportunities that technology offers. We sat down with Vivien Berbigier, CEO EMEA and Member of the Executive Board at BNP Paribas Cardif, to talk about how insurance can be made more accessible in all its different meanings. 

Vivien, how do you view the current level of protection that insurance is offering?

The insurance industry has grown into a large industry, representing 7% of the world’s GDP. However, the world is still suffering from a large protection gap: only 1 in 3 disaster losses are being insured, which represents large risks for people. On top of this, this protection gap is further increasing due to the pandemic, rising geopolitical risks, climate change and adverse effects of digitalization.

People are starting to take notice of the world becoming a riskier place. BNP Paribas Cardif regularly rolls out a protection survey across numerous countries to understand how people feel about how well they are protected, for example when facing health issues, accident issues or job loss issues. In the last three years, their concerns have raised significantly, either because of global news, or from increasing personal negative experiences: 40% of people for example have faced adverse events such as the loss of their job or an accident, leading to difficulties in reimbursing their loans. Two years ago, this was only 35%. 

So if the world is not that well protected and people are aware of this, why don’t they insure their risks?

This is a topic that BNP Paribas Cardif is very passionate about. As a context, we partner with large brands and big distribution networks across continents and across industries to help sell insurance to their tens of millions of customers. And we’re present in various types of countries, for example in some with low insurance penetration, like in India, where we have helped the State Bank of India bring protection to their half-billion customers, or in Latin America, where financial inclusion through banks has been slower than elsewhere. We are also in more developed markets where we’re partnering with many of the biggest banks, car manufacturers, retailers, telcos, consumer finance companies and digital platforms. 

We find that making insurance more accessible boils down to three things which are:

  1. Increasing inclusivity of insurance
  1. Making insurance understandable 
  1. Improving the ease of use 

What does BNP Paribas Cardif do to help increase the inclusivity of insurance?

People in remote places often don’t have access to insurance, think of places like India or Africa. There are a few silver bullets to make it work, one of which is to rely on trusted household brands that compensate for the discomfort of people who are still not that accustomed to insurance, as well as on large distribution networks which have a reach in the field. Good examples are bank branches or the retailer on the corner of the street, the car reseller in town, or the local social credit institution. By leveraging such assets, it’s easy to roll out protection and savings offers to millions of people in just a couple of months with just a small team of employees. For example, we very quickly provided such access and managed to cover more than half of Chilean families and more than 10 million customers in Colombia.

How do you see the state of insurance inclusion in other parts of the world?

Inclusion matters and there’s work to do, also in developed countries. For example, some products, although they have proven their social use, are very developed in some countries, but for historical reasons, not so much in others. Take creditor insurance for mortgages. When a family purchases a home, they usually take a loan, drastically increasing their liabilities, should something happen to them in terms of health or accidents. This has given birth to very large markets, where we provide extensive protection, like France, Belgium, Italy and Japan. Surprisingly that’s not the case in other places like the Nordic countries, Germany or some parts of Eastern Europe.

By leveraging our understanding as to what works, and what doesn’t work, we’re trying to bring the best insurance covers as well as the best services to both customers and distributors to bring social protection to those markets as well. A good example is CHECK24, which is one of the main digital platforms in Germany for creditor insurance around mortgages. 

Are there other ways to make insurance more inclusive in developed markets?

There’s a second reason why inclusivity has potential in developed countries, which is that the traditional products have been designed trying to minimize the risk. Typically, insurance contracts in traditional networks have an average of dozen exclusions, sometimes more. And yet, recent times show us that often we can manage without. When there’s an earthquake in Turkey, we push for a more caring approach and revisit the need to apply and to have in the first place those exclusions. The same thing applies when there’s a war or a pandemic. So we’ve gathered a team to revisit all of our products and have managed and realized that, in fact, you can drill down the number of exclusions to just 4 or 5. And mind you, those 4-5 are compulsory by law.

By revising all this, we make insurance more inclusive and this allows us to provide insurance and coverage to people who were previously excluded. For example, in Japan, we can now provide coverage to people who have had cancer and were not in the capacity to have insurance. Another example is Taiwan, where we raised the bar in terms of the age of the people to whom we can offer coverage, raising it from 60 years old to 70 years. Finally, we now protect people in France who have inflammatory bowel disease and all those sorts of aggravated risks that up to now were not covered. 

Thank you for these clear examples. You also mentioned understandability – how does BNP Paribas Cardif help to make insurance more understandable?

The readability of insurance policies is an easy topic to see, but a very complex one to address. Policies typically used to have 20-40 pages of unintelligible text. Reviewing them with a transversal team allowed us to increase the understandability of those policies by about 30% and reduce the number of pages to 2 to 3 pages, in the best cases. But beyond making the policies more intelligible, there needs to be a series of assets to accompany the understanding of insurance at various points of the journey, for example at the moment of subscription. These can be tech-oriented assets, from assets allowing insurers to evaluate and understand insurance needs, to assets trying to identify the holes that clients have in their protection.

Frankly, the most efficient way does not involve much technology, but pure old training. Because today, the majority of sales across the world are still being done in a fairly physical way, especially for the mass market. So training the people interacting with clients matters enormously. The training itself is different though: we’re talking about smarter training than used to be done, based on way more data and analytics, retention statistics, feedback from the client as well as sentiment analysis based on speech-to-text from various interactions that we’ve had. This type of targeted training proves to be extremely effective. In terms of the understandability of insurance, a third element matters enormously, which is the likeability element. How do clients understand insurance? Do they understand it as a boring thing, something that is forced on them by law, or do they understand it as a social benefit that they can acquire? Likewise, do they understand insurers as organisations with opposite interests and trying to pay as little as they can? Or do they understand insurers as partners, helping them to lead a better life, or at the very least, a safer life? 

That’s an interesting point you make. So how do you change the way that people see insurers and insurance?

To change this perspective, we’ve rolled out an experiment which turned out into an innovation for us, which proves very efficient, starting in Latin America and then gradually being spread throughout Europe. This is reversing the paradigm on insurance from a negative to a positive. Let’s take the example of unemployment insurance, which we happen to be the leader of in many countries around the world. Unemployment is something that is not that often purchased and, surprisingly so, not even that often used – even when people do have a claim that they are entitled to. To reverse this, we actually stopped selling “unemployment” insurance and turned to “employability”, switching the focus from negative to positive. We accompanied this with an ecosystem of services to nurture employability from up-skilling services to training to pass interviews, to job fairs, et cetera. And we’ve also set up teams equipped with data analytics and communication tools to engage clients and promote usage.

This combination of positive storytelling, an ecosystem of services and promoting clients’ engagement has turned out to be extremely effective. Before, only about 1% of BNP Paribas Cardif clients used something out of us (when they had a claim), and this has now increased to 30% thanks to the use of many “employability-boosting” services. It also has increased our pure claims ratios up to 38%, which is something we actually celebrate, because that’s exactly what we’re trying to do.

How does BNP Paribas Cardif improve the ease of use?

When we talk about making insurance more accessible, we’re mostly talking about mass markets. Ticket size can be really low down to micro-insurance. When you have very low ticket sizes, any disruption in the process, be it the subscription process or even the claims process, immediately triggers significant drop rates. If your processes are not extremely streamlined, you lose people who end up not being covered or not using what they should be using. So we’ve worked on the journeys starting with subscription, which boils down to a very famous topic, embedded insurance, which is entrenched in our DNA: facilitating the purchase of insurance inside our partners’ journeys.

Now this again meant acquiring, developing and rolling out a series of assets, some very tech-based, some less so, to accompany the sale and to help make it very smooth. For example leveraging data that the partners have: leveraging the knowledge they have of their clients to pre-fill forms, or to build sales propensity models. This also means context sharing so that there is no disruption in the experience, especially no disruption in digital journeys. But it also means revisiting some very traditional assets, because the reality is that the mass market is still non-digital in various parts, including optimization of telemarketing scripts. Beyond subscription, we also need to help in the claims process. Because surprisingly, even though people have a claim and are entitled to it, they drop out of it. They drop out because the claims may be too small or because we used to ask for too many documents. And so they postpone it for a later point in time and then they forget about it. Or perhaps it’s an administrative phobia for some of them. 

So how did you change the claims process to make it easier and more accessible?

What we did was drastically simplify the claims process, starting by reducing the number of documents that are needed. Sounds easy, but it means completely re-engineering all of our processes. We’ve pushed it down in various places to 1 or 2 documents from the initial 6 or 7 documents that were required from our clients. Then we streamlined the whole process. The process can start with taking a photo, which can be sent through WeChat or WhatsApp, SMS, OCR etc. This results in a claims reimbursement in only a few seconds, which we’ve managed in some countries but are still rolling out in various others.

One of the most efficient things that we have today is some countries the ”Amazon-like” type of communication, meaning informing the client along the various stages of the process, in our case the claims’ process. By doing so, we’ve recaptured a group of people who had dropped out of the process, significantly increasing our claims ratio, which again is our very goal. The next step is probably Parametrical insurance. We’ve already implemented several of them, mostly on death, unemployment, incapacity and invalidity, in various countries. We are to that effect either leveraging public databases whenever we could strike a deal with authorities, leveraging databases that were already available, or leveraging our partners’ databases, trying to capture weak signals. 

Making insurance more accessible sounds like spending a lot of money. What are you getting in return?

We want to pay more, which from time to time surprises our partners. But what we’re trying to do by paying more, is to change the financial equilibrium. In fact, to change the very social contract between the various players in the insurance field. Change the social contract between the insured first, in the sense that the very mutualization paradigm is changed. From time to time, in B2B2C bancassurance, you have a mutualization which is a bit tweaked as value is captured by those who understand the system, sometimes even play the system, to the detriment of those who are unaware or are distracted at the moment of subscription for example. So there’s a first paradigm which is to push through better social mutualisation.

The second equilibrium that we’re trying to change is how we grow and split the value generated. We’re trying to make a fairer cut of the cake whereby the final clients get more value, and actually use the insurance that they have. But in doing so, we’re changing so many things alongside subscription and retention that we end up having bigger volumes with way higher penetration rates and way higher retention rates, as well as higher NPS. For example, the Amazon-like communication that I was talking about raised NPS by up to 40 points in some of our portfolios like in Germany. All three (penetration, retention, NPS) represent great value for our distributing partners, allowing for better business and hence more space to give more value back to the final clients.

So, to wrap up, how does BNP Paribas Cardif make insurance more accessible?

Making insurance more accessible takes a lot of modifications along all of the axes that I’ve mentioned. It requires an ecosystem of many like-minded actors going in the same direction, a strong brand which knows and cares about its final clients, large and powerful distribution networks, experts in bancassurance distribution expertise, experienced teams in risk assessment and management, as well as a range of TPAs, reinsurers and other providers. We partner with or invest in start-ups for example, who are unbundling parts of the value chain and improving them, especially around client experience. Now we’re fortunate enough that this taps exactly into who we are and have been since inception: builders and animators of positive long-lasting alliances and ecosystems of players. We are always eager to develop the capacities of those ecosystems further, all geared towards our shared goal: providing better protection, that’s inclusive and easily accessible. 

Vivien Berbigier, CEO Europe, Middle East and Africa and Member of the Executive Board at BNP Paribas Cardif
Munich 22-23 November


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