ITC DIA Europe

The Future of Embedded Insurance, a Volvo Group perspective

Written by Roger Peverelli and Reggy de Feniks - Founders The DIA Community on Mar 18, 2024

With a career spanning over 20 years across automotive and insurance, Stefano Cicciarella operates at the intersection of those two industries. Now at Volvo Financial Services, Stefano acts as Vice President of Insurance Services, building out embedded insurance capabilities in this emergent, innovative, and hugely exciting area of the insurance industry.

We sat down with Stefano to discuss real-world applications of embedded insurance and how its implementation can improve customer centricity by understanding the unique circumstances of drivers and their vehicles.

Stefano, how does the Volvo Group improve the driver experience on the road?

“At the Volvo Group, we want to improve the driver experience on the road, so we must foster safe vehicles with advanced driver assistance systems and proactive risk management. One example is the safety service for customers. This service shows the customer if there is an issue with, for example, a tire, showing exactly what the problem is. Until now, we’ve just sold those services to customers, but Volvo Group didn’t directly benefit from it and the overall insurance portfolio’s performance had room for improvement. We now want to bundle those safety features and services, as part of our branded insurance approach, generating peace of mind for our customers and helping them in case of an accident.”

Can you give some examples of the latest developments in your approach to embedded insurance?

“There’s an interesting development, which is bidirectional data streaming. We can manage services from the truck. We’re also able to manage digital compliance and privacy regulations. The customer can push a button to give consent to an insurance company or any other service company to leverage data coming directly from the truck. An example is the digital-first notification of loss from the asset itself, where the customer can push the button and say ‘I confirm I want to share all the data related to the accident with the insurance company’. This is a good example of the comprehensive service framework that we’re building along the value chain.

Another example is omnichannel customer engagement. Omnichannel means customers can start their insurance purchasing journey anywhere and complete it anywhere. Helping them with a seamless purchasing experience would support insurance sales when it comes to risk-adjusted pricing. What we try to understand is: how can we, based on a connected insurance platform, host pricing on our end or get connected to the pricing engine of the insurer. We want to do this flexibly because we know that some carriers would not be open to an API and a pricing engine. We aim to go towards more risk-adjusted pricing, to secure fair pricing for our customers.”

What is Volvo Group’s vision for the future of embedded insurance?

“We are working to speed up the claims handling process to minimize downtime for our customers, e.g., by AI-driven claims inspection. On top of that, we have a new ecosystem approach focusing on sharing. We share our vision, rewards, processes, objective resource data, and information based on compliance rules. I foresee that with the ecosystem approach, we can tweak business models to make them even more compelling for our customers and carrier partners. We are changing from a traditional tender approach, instead focusing on the Total Cost of Ownership and the portfolio’s profitability. It needs to be done so that all parties are happy at the end of the day – we’re looking to create a beneficial model for all stakeholders.”

Who is Volvo Financial Services?

Volvo Financial Services is the captive finance arm of the Volvo Group, providing financial services and solutions that meet the needs of our customers today and into the future. Dedicated to innovation, VFS supports society in adopting sustainable transport and equipment solutions. VFS is headquartered in Gothenburg, Sweden, and serves Volvo Group customers and dealers in about 50 markets.

Stefano Cicciarella, VP Insurance Services, Volvo Financial Services
Amsterdam 12-13 June

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