Raj Singh, new board member and shareholder of Kasko2go and Genadi Man, co-founder and CEO share their insights about the future of the insurance industry and the community of safe drivers. Raj singh joined Kasko2go governance in March, 2018 to bring strong and innovative insurance SME expertise as well as knowledge to manage financial, strategic and operational risks. Genadi Man has been active in the field of telecommunications since 1993 and served as Chief Executive Officer and President at Man Oil Group AG until March 2015.
Mr. Man, how would you describe the present-day driving culture? If we trace the transformations during the last decade (or two), what are the major changes in your opinion?
G.M.: Good question. We drive safer, we respect more law on the road, because it comes to be more and more expensive, and people have more respect to each other on the road. However, the improvements do not apply to the attitude towards the insurance companies.
Based on your experience in multiple global marketplaces, how does the insurance culture differ in Europe and USA?
R.S.: There is some general similarity in the insurance culture between Europe and the USA however, two key observations of differentiation are around innovative thinking and cross border ambition.
European insurance has been more innovative and open to new approaches such as telematics and usage based options.
Additionally with European insurers having more of an international footprint and the largest reinsurance companies being based drives more global thinking. Kasko2go is a product of this innovative and global thinking.
Usage based insurance is truly the best approach for a customer, why have traditional insurers not entered this market in a large way ?
R.S.: Usage based insurance makes strong sense for customers as they are only paying for coverage on collision etc. when it is required. Traditional insurers have been reluctant participants in entering this market as it would cut deeply into premium volumes and prоfіts and also reduces contribution to large overheads. There is also the fear of own portfolio cannibalisation and overall reduction in business volume.
At Kasko2go we have no such legacy thinking and our aim is to provide a fair usage and driving quality based car insurance product and good for a large portion of car drivers who can benefit from lower costs.
The insurance industry is perceived as the conservative sphere, where market players are reluctant about technologies and the idea "digital is here to stay". At the moment technologies are regarded as one of the challenges for the industry. Why so?
G.M.: I believe they are not conservative, they just cannot change anything. If you have already created 100 000 jobs for a simple task, how will you tell your shareholders, there is no need for them now? That’s why they are stuck in their cocoon and have no chance to change the situation.
It does not matter if they have technology or not. The question is — can they give an alternative? They have to start from the very beginning. Otherwise it will take them at least 10 years to change. In Switzerland most insurers see their customers once in 5 years. How long will they live with that concept? Ask me next year.
According to the survey, 44% insurance directors think that "most existing insurers will not survive, at least in their current form". 35% of respondents claim that "the industry landscape will stay the same, but the players will change substantially in five to 10 years". Mr. Man, how do you visualize the industry in the next 10 years?
G.M.: I believe that at least 40% will disappear, the biggest players will survive, and completely renew business process of company through new technology, new fair play and understanding of the user. I believe that landscape will be completely renewed.
All brokers will disappear similar to the disappearance of tourist agencies: their place was taken by booking, expedia etc. Only boutiques will survive. Relationship with customers will be completely different — the exact transformation we see in internet banking.
Mr. Singh, in your experience as a top manager at major insurance and reinsurance companies like Standard Life Aberdeen, Swiss Re and Allianz, how do you see the move to true digitalization in insurance?
R.S.: There is a strong move to digitalization both around the actual customer journey and experience as well as back office support however end to end true digital journeys are still tough due to legacy systems in many traditional insurers.
Kasko2go as a de-novo challenger in car insurance is free of legacy and we are designing and building a truly digital, end to end customer customer experience.
Mr. Singh, which expertise from 'Standard Life Aberdeen' is the most essential to bring to the innovative sphere of InsurTech?
R.S.: Standard Life Aberdeen has been an innovative market leader in developing end to end fully digital customer journeys via its online pension access and selection.
In building such journeys the key focus is around the customer experience and ensuring the digital customer journey moves through the full customer delivery cycle and not just customer interface.
How do you estimate the raising capacity of Kasko2GO application? How do you estimate the global applicability of the Kasko2go approach and its functionality?
R.S.: Kasko2go puts both the pricing control and usage in the hands of the customer. Safer driving begets better pricing and usage based opens an essential and transparent charging for needs based car insurance.
Our military grade state of the art fraud detection also helps create our Kasko2go better, safer and fraud minimized driving community which has applicability across borders ultimately making this a truly global opportunity though our initial focus is DACH region and then the EEA.
How can market players on one side and drivers on the other one influence the situation?
G.M.: Very simple — just by using our system. On the one hand — good drivers will respect scoring system and get good price. And on the other hand — companies will get quality and predictable customer with less risk and lower premium.
You have a great experience and practice in Risk Management. Mr. Singh, judging from this area, what kind of risk - classic or technological - is the biggest concern for the modern insurance sphere today and why?
R.S.: There are three specific risk challenges for the for the car insurance community and all key ones are technology related - disruption from insurtech, disintermediation of customer relationships by “trusted” technology firms, changing technological landscape ie autonomous driving.
Kasko2go is well positioned as an insurtech disruptor and the desire to build a trusted Kasko2go community.
Can you personally explain the scepticism around implementation of AI?
G.M.: I can explain that only with famous quote by Mr. Duell of 1899: “Everything that can be invented has been Invented”. Or let's take Kodak. Patent they got for digital photo – they said there is no need at all, because of poor quality and everything – and they sold patent, but digital photo is now ubiquitous and multi billion industry! And where is Kodak now?
Mr. Man, what is the future of the InsurTech sphere in the next 5 years? And what are the main problems in traditional auto insurance that InsurTech could help to fight soon?
G.M.: Traditional car insurance is ripe for disruption and the next five years will bring in innovation across the full customer journey. The three key challenges in car insurance which insurtech could help mitigate are customer risk selection, leakage from fraudulent claims and dealing with usage based needs. Kasko2go is well positioned to deal with all the challenges.
There are questions over how far the insurance industry is willing to take on cyber risk. As companies and consumers wake up to the cyber threat, will they want to spend more on defending themselves?
G.M.: Yes, definitely it’s big and important issue. I believe it will grow both sides — insurance and software, and we will be in the middle of that process.
IoT has an opportunity for bigger insurers, but should it be used by the entire industry?
G.M.: Definitely yes.
Are there any operations that cannot be automated and need manual handling?
G.M.: Globally, yes. But hopefully, not in future of motor insurance.
Mr. Man, what is your view of community of safe drivers?
G.M.: I believe in future everybody will recognize driver in the crowd through internet. Good driver will know about another one. Insurance product will give customer good feeling on the road because it will recognize his good driving manner and motivate it.
What are the strategic vision and mission of your company?
G.M.: Fight for fair price in insurance, making world safer with a community of good drivers.