Digital technologies are changing customer expectations and blurring boundaries between industries. Ecosystems are developing across different industries, connecting different players around more customer-centric propositions and customer journeys. How will this play out for the insurance industry – and what does this mean for insurers? How can insurers prepare for the connected future of insurance? We sat down with Woody Mo, CEO at Insurance Middleoffice Platform InsureMO and Valer Merenyi, Business Owner Digital Platforms at insurer Ageas, to hear their vision on the connected future of insurance and how insurers can add value and take control.

Valer, can you tell us a bit more about Ageas and your plans for digital transformation?
Valer: “Ageas is a Belgian insurance group with 200 years of heritage and 47 million customers. We’re present in Europe, the UK, Turkey, and also in Asia through joint ventures with banking partners. Ageas is what you would call an incumbent or traditional insurer, but with a strong focus on digital transformation: we’re aiming to make digital platforms our next distribution channel. We want our operating companies to become the preferred partners of choice for digital platforms in five verticals: Digital Financial Services, E-Commerce, Telco, Online Travel and Health.”

Woody, what is your perspective on the changing insurance industry?
Woody: “Connectivity is becoming the norm, also in insurance. As a result, we see a shift from carriers being in control to a situation where the whole ecosystem is in control. Ecosystems are developing in many areas: car dealer platforms, Credit card platforms, Payment Platforms, Travel, Telco, and Employee Benefits. And they are becoming more and more dominant, taking control of sales and service – and often treating insurance companies as just one of the suppliers. For a lot of channels that have existed for many years, for example, banks or car dealers, the impact on insurance so far hasn’t been that big, as the business was quite isolated and not connected. But as we move into the connected world of ecosystems, everything is connected and real-time, which will change requirements for insurers. In terms of sales and services, for example, carriers will need to adjust, as partners have higher demands to meet their customers’ expectations of having a smooth customer journey. InsureMO’s focus is to empower the whole ecosystem to do insurance business, being the operating system for all players involved, not just the carriers. Our middleware platform as a service, enables the rapid launch of insurance products across digital distribution points, adding more flexibility and speed, so that insurers can adjust quickly to changing customer needs.”

What does this mean for insurers? Valer, are they losing control over the insurance business?
Valer: “Here we can learn from the Banking industry: banks have moved down the digital transformation journey much earlier and much faster than insurance companies. In banking, we’ve already seen the real-time connectivity Woody was talking about earlier. The traditional model of banks did not appear to be completely future-proof, as we’ve seen neo-banks and online financial management platforms enter the business. The same goes for insurance: what made us big and successful at Ageas, is not going to help us sustain that success going forward. So we need to focus on building a strong digital business model. This means we’re investing in Technology and Integration, new products and pricing – and working with partners to be ready for this new playing field of connected insurance. One of the challenges we encounter has to do with data: partners are not always ready to share data or there may be regulatory constraints with GDPR and other data privacy considerations. This is an important area where we need to come up with a solution so that we can collectively share and create value in this connected business model.”

Woody, how do you see the role of insurers changing in these ecosystems?
Woody: “The insurance industry is a licensed industry. The regulators will force insurers to have a role. The only question is, how big is that role? In terms of pricing, nominally, the product has always been owned by the carriers. But as the ecosystem generates and collects more and more data, they potentially have better knowledge of those risks than the carriers themselves. They may become even better than a carrier in terms of knowing what the risks are, what they should protect, and how to price those risks. This may result in the ecosystem creating their own, maybe even better, way of pricing. And they might say to insurers “Take it or leave it”.

What is your perspective, Valer? Can the ecosystem become even better than carriers at understanding risk and pricing?
Valer: “That is the question: You need insurance, but do you need insurers? The cost of doing business in insurance is coming down rapidly. That’s why we actually see so many new ventures and new carriers setting up shop, not only in Europe but also in Asia. But, it does remain a regulated business. Also, for long-term insurance and large sums, people need certainty that the company they’re doing business with sticks around. I think there will be healthy competition between incumbents and new entrants into the insurance space. I think the function of pricing and product will remain within the insurance scope. If new players have better ways to price the risk, they will enter that arena as an insurer or as an MGA. And that’s really good for shaking up the industry a little bit.

From a products and pricing perspective, we have been focusing too much on our traditional businesses for too long. For now, we may not feel the pain and threat so much, because it’s taking place on the fringes of the industry – and these new types of risks and new risk pools are not that big compared to our traditional risk pools. But we see the growth rates and change in consumer behavior, and also in terms of trust towards digital platforms. If customers trust digital banks with their money and payments, they will be trusting digital insurance as well.”

How does InsureMO address these concerns when working with insurers?
Woody: “When the industry is in this dynamic and fragmented kind of situation, every channel potentially demands something different: bigger volumes, more variation and velocity. Everything needs to be fast. You also need to be able to create all kinds of variations for different channels in terms of your product and process. That’s why at InsureMO we strongly believe in the middleware approach, where you have a platform to develop anything you want, quickly and easily. This allows for much-needed flexibility and helps insurers to be more nimble and responsive.”  

Is that also why Ageas chose InsureMO? How do you choose with whom you partner?
Valer: “I indeed share that view and obviously, that’s why we’re working together in many markets. We can’t afford to just throw out our legacy systems from one day to another. That’s why we’re looking for a solution that we can set up in parallel. It is important to enable that rapid and agile go-to-market with new digital products such as cloud, APIs etc. We’re investing in developing assets and capabilities that we can share across the whole Ageas group, both in Europe and Asia. For Tech and Integration, we’ve been working with InsureMO for a number of reasons. First of all, their setup is scalable. You can start small at a relatively low cost and scale up from there.  Their architecture is also conducive to developing assets locally and sharing it at the group level. And finally, they cover both Europe and Asia, life and non-life and health – all the areas that are important to us.”  

About InsureMO

InsureMO is an Insurance Infrastructure platform, that is powering the global insurance ecosystem through a Middle Office/Middleware layer. It offers various insurance consumable components, in the form of tools and assets (APIs, product templates, data pipes, integration adaptors, etc.) to any insurance player, to build or connect to any app or System of Record (SoR).
InsureMO powers more than $20 billion in Gross written premiums (GWP) every year, in nearly 40 countries, working with 300+ insurers and connecting more than 5000+ distribution partners and channels on their platform.