We're back talking directly to a senior executive from a major reinsurance company about their views on innovation and what they see as the industry’s major challenges.
Andres Webersinke, Global Chief Underwriting Officer for Life/Health at Gen Re, joins Matthew on Podcast 108 to reveal the rethinking of customer relationships and harnessing new technology.
Listen now to learn about:
- How Covid-19 has kickstarted innovation
- Changing risks and influencing behaviour
- Building customer loyalty through regular communications
- The lessons to learn from Asia
- How insurtechs can work with Gen Re
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Reinventing customer care - Podcast 108 highlights
Matthew: Andres, you’ve spent almost your whole career in the industry. Was insurance something you always wanted to go into?
Andres: Not at all. I studied mathematics and thought I might join a bank. In the 1980s, the banks were looking for IT people, but I didn’t want an IT job. Most mathematicians went to insurance companies, so I joined a life insurer.
Matthew: Is your role focussed on Life & Health only or across the whole of Gen Re’s business?
Andres: The focus is on Life and Health. Global underwriting and research & development activities are embedded in our Life/Health franchise, but we don’t work in isolation from Property and Casualty, which is a significant franchise within Gen Re. Through our Business School, we offer training and education across Life & Health and P&C. We also share analytics resources with our P&C colleagues, working in larger teams to achieve goals faster.
Matthew: How does your team balance underwriting with looking forward to future opportunities?
Andres: We have a lot of topics which we constantly need to update. If I take underwriting research as an example, we must develop our underwriting manual with the latest information. We’ve been inundated with Covid-19 information and have adapted our underwriting approach to that research.
We have differentiator projects which we believe make a difference, so we are constantly looking for opportunities to support our colleagues out in the market.
Matthew: What themes are generating the most interest at Gen Re at the moment?
Andres: Defining risk categories and supporting evidence-based underwriting is essential for us. For that we need data and we want to innovate, to become better to differentiate ourselves. We should not be exploring what is possible but what is needed for society and our end customers. Fairness and equity are our guiding principles in that work, and it should lead to better product offerings and consumer choice.
We want as many people as possible to have insurance cover, but we send them through a process that has not changed for many years. Think about underwriting. Fundamentally, we’re still doing the same as we did 20 or 50 years ago. Why? Many simply can't imagine parting from the traditional information they have used.
Unfortunately, we needed a pandemic to force us into offering alternatives. Some markets couldn’t provide medicals because of lockdown rules, so insurance companies had to adapt. I hope that these thought processes continue to develop, and we achieve a better process for customers.
Matthew: How does Gen Re engage customers when acting as a reinsurer, rather than as an insurer or a broker with a more direct relationship?
Andres: We mostly engage with primary insurers and the end customers is pretty far away. On the other hand, we do get regular feedback because certain insurance terms are provided by the reinsurer. For example, we might give an individual assessment of a case before we accept a risk.
What’s important to us is that insurers sell good insurance. That means applicants know what needs to be provided and that we don’t have to look at non-disclosure at claims stage. The more that the end customer understands the product, the more chance of a better outcome for everyone.
Matthew: That’s an interesting change from how many organisations might think about their customer relationships.
Andres: We don't want to be at the forefront. That's the job of the agent or primary insurer. We provide them with capacity and ideas on how to structure products. We want to make sure that the products our clients are selling have no problems later on, so it’s in our interest to guide them.
Matthew: There's a focus now across insurance and reinsurance to find ways to help customers reduce their own risk. Is that important at Gen Re?
Andres: The times are over where a life insurance company could simply offer a customer financial protection in case a loved one died or got a major disease. We want to appear as a partner to the customer.
That means preventing losses or claims, not because we don't want to pay, but because a happier and healthier life is something our clients need and want.
Matthew: How does Gen Re find and work with technology partners to support clients in managing or reducing their own risk?
Andres: There are so many insurtech companies out there that insurers can lose sight of what's available. We take on that part of the job for clients, vetting the offerings and talking to insurtech companies. We want to understand their core offering and assess the potential.
We support the insurtechs we believe in through mentoring and introducing them to our clients. Gen Re has a global reach and we understand the differences in the various markets. We can help companies understand the potential of their technology offering and how to adapt it for insurance.
Matthew: Does Gen Re work with very early-stage companies? Or is there a preference for working with companies that are more established?
Andres: We're very happy working with early-stage companies. The problem is that they have a very different timescale idea of success. The life insurance industry works at a very slow pace and the different expectations of time is the crucial part. Companies need to understand that their ideas may not be in place within three to six months.
Matthew: What examples of technology have you seen that are having an impact on changing the risk or influencing behaviour?
Andres: People are seemingly obsessed with tracking everything. They want to know how far away the pizza man is, just as much as they want to know how fast they ran their last 10k. Insurance will find that data interesting and it’s something we need to look into, but can we expect people to track information for a 20, 30, 40-year policy? Also, the entire offering must make sense for a large target group. That's probably why Vitality seems to work reasonably well.
Insurance companies recognise the value from indicators. We can attribute customers into different categories based on their attitude to risk or health, but it’s very difficult to define an insurance policy for 20 years simply around how many steps somebody takes.
It often works best with a group of already substandard risks or people suffering from a disease. They understand the need to change their lifestyle, we can nudge them in the right direction and they understand why we are doing it.
Matthew: Are there opportunities for life insurers to engage more frequently and directly with customers? For example, I bought my life insurance policy 27 years ago and haven’t heard from that insurer since.
Andres: There is a real risk in contacting someone. I heard of one UK life insurer contacting policyholders to tell them about a rate reduction and their lapse rate went up. But if a customer bought a policy 27 years ago and never has any contact with the insurer, that’s not a good relationship.
Insurers need to engage with customers. Some prefer to communicate via an app, some prefer the trusted agent and others want the old-fashioned letter, but the insurer has to provide the choice. Start making contact and offer something, then the loyalty will increase.
Matthew: What are the lessons from Asia? It seems like they are ahead in some respects with regards to Life & Health?
Andres: Asia is a fast-growing market with untapped opportunities. Consumer expectations in Asia are also somewhat different. There is more acceptance to receiving insurance offers via social media. An insurance purchase via an app also doesn’t have to be a $1,000 question, but more like the value when buying a dinner in a good restaurant, which it usually is in China. If a company offers health insurance for a low premium together with a tool that manages a doctor’s appointment, then it meets the needs of many people in China. It’s easy to sell such an insurance offer.
There's a lot to learn from successes in Asia, but also from the failures. It would be a mistake to simply transfer an Asian approach to the European market. It's very different, with different regulators and consumer groups. Not everything is gold standard in Asia.
Matthew: How do regulations affect the pace of innovation?
Andres: Regulators don’t always move with the times fast enough, particularly around the sales process. It's not always our choice to make that cumbersome in terms of providing details and long product disclosure statements, which few people read.
It would be nice if it could be done differently, but we need to embrace it and getting systems and processes up to speed creates headaches. We all want data lakes, we all want to have access to the data, but we need to manage it smartly and tell customers what we're doing with their data.
Matthew: Is there a category of people more willing to share their data? People who are happy to give full disclosure in exchange for benefits?
Andres: We all want to see what we get for handing over data. Whether it’s a discount or something else. There’s always a suspicion that insurers will use the data to benefit the company and we need to demonstrate that it is for the individual.
I always like to talk about the introduction of non-smoker discounts. The data shows that non-smokers have lower mortality, so we should give them a discount and smokers have to pay more. That has been accepted by society.
Matthew: What is Gen Re seeing in terms of losses occurring from either Covid-19 directly or some secondary impact of the virus?
Andres: We definitely see this in our results. We see less health insurance spending, for the reason that hospitals were not frequented to the same extent for non-Covid-19 related issues.
What is probably more important, because people suddenly lost their jobs, is that premium rebates were offered to people who couldn't afford them, but needed cover going forward. The industry was very proactive in providing solutions to large groups of people who suddenly had financial problems with continuing their insurance policies.
Matthew: For companies that want to know more about Gen Re, or how to work with the organisation, what's the best way to make contact?
Andres: We have offices in many countries. So those local people are the preferred first point of access because they know the local market best. We would always work with our local people on bespoke solutions.
Ross Campbell in our London office is the person who would speak to most of our insurtech companies. He's the person to go to if insurtech companies have an offering for the insurance industry and want to test whether it is a feasible and viable solution.
Matthew: How do you find the time to keep up to date with what is happening in the world as well as doing your day job?
Andres: I have an advantage in that I have a large, diverse team working in global underwriting and R&D. I find it enormously important to talk to different people with different backgrounds. Our colleagues world-wide have requests that result in mini research topics, which helps make sure we remain up to date.
I have worked in many different countries, so having a good network of people to tap into and talk to is the holy grail for keeping up to date with important things.
Matthew: Before we wrap up, where can people find more information about the work Gen Re is doing?
Andres: On our website, genre.com, there is a knowledge base where we share a lot of information and research. We don't think it's something we should keep for ourselves. The more we can share with the industry the better.
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