Insurance in the DIGITAL age


The technological revolution and the new generations of tech savvy customers are driving revolutionary changes in all segments including insurance. Today we talk with Olga Sorokina, Deputy CEO for Business Development of VSK Insurance House about how to catch the wave of innovations.

What are the signs of the new era and who are its adepts?

- The megatrends of modern insurance business all over the world are very different from those that existed in the financial market just a few years ago. The fundamental change in the approach to creating insurance products is explained not only by the new economic conditions, but also by the development of modern technologies, which literally affect all spheres of life. And most importantly, consumer behavior is changing across all markets, including insurance. The nature of these changes is defined by millennials, which by now have become the majority.

A lot has been written about millennials. Undoubtedly, one of the most important points is that this is a digital generation that cannot imagine life without gadgets and social networks; they have high demands on online service quality. Therefore, a convenient modern interface in a mobile application whose functions would allow you to solve a variety of tasks, including selecting an insurance product, getting advice and the like, remotely via the Internet, becomes an indispensable element of the system to promote insurance products. Millennials also have a specific demand for services combined with digital technologies, means of communication adapted to a modern, much more mobile and diverse, lifestyle. That’s why the opportunity to buy a policy and handle a claim online without direct communication with the insurer is becoming the standard of work for insurance companies with this generation of clients.

How does one cope with the wave of changes happening so quickly?

- The change of customer behavior patterns is a serious challenge to the traditionally conservative insurance industry. And this isn’t the only challenge. Recently, the competition in the industry has been spurred by numerous fintech start-ups promising to disrupt the global insurance market. According to a PwC study, by 2020, about one fifth of the traditional insurance businesses around the world could be at risk. Faced with the changes in consumer behavior, with the modern technology and the new distribution and business models, the entire industry finds itself at a critical juncture in its development. To stay relevant, the insurers must keep changing themselves and their business by leveraging cutting-edge technologies. In fact, the technologies should help the transition

from the business model based on historical risk assessment to a personalized and real-time risk assessment model.

What technologies have already been implemented and what does the future hold in store for us?

- Many innovations are already being adopted by insurers today. Big data is increasingly applied in product management and scoring, while personalized pricing is based on driving style, health and many other risk sensitive inputs collected by telematics and various online monitoring systems. This makes faster and more convenient not only buying an insurance policy, but even the claims settlement process. For instance, VSK is enthusiastically implementing the touchless claims handling through its mobile app. No more going to offices and waiting in lines. OToday, in case of a road accident, our customer can ffile a claim online with the VSK Insurance application. The system will find the accident location,right away forward it to the nearest repairshop and regularly keep the customer updated about the claim status. When applied to health insurance, the customer’s user account is becoming a comprehensive dossier of medical records where the customer can view the history of appointments with doctors and prescriptions and, via telemedicine, one can communicate with a doctor remotely.

A clear example of simple technology solutions of the future is the car sharing insurance where the driver is insured only for the duration of the travel or exactly for the period when they really need it. In this case, the policy can be easily drawn up in a couple of minutes with a few simple operations in one’s smartphone.

All these changes require a fundamental overhaul of company’s IT systems and the very business model. Those who lag behind will likely have to leave the market, giving space to their more technologically savvy competitors. It is quite obvious that, in a few years, convenience and service quality will become key criteria for choosing the insurance company, alongside reliability and reputation.

There are huge prospects for the insurance industry today: we do not yet have such strong competition in IT as we do in the banking sector. Most of the top 10 players, with a few exceptions, are quite conservative. Therefore, companies with more aggressive digital strategy have every reason to become market makers.

VSK has been actively engaged in developing and improving remote services since 2017. What was the driving force behind these changes, how would you assess the competitiveness of these services today?

- The focus on developing online services was a decision based on deep customer polls and surveys, rather than fashion statement. Our surveys showed that, in communication with insurance companies, our customers did not have enough tools for quick and convenient feedback, they did not feel that the situation was under control. And this is the main thing everyone wants when a loss occurs.. Thanks to the VSK Insurance mobile application, we solved this problem by enabling the customer to fully manage the situation anywhere and at any time.

Starting as a minimum viable product, VSK mobile app featured a limited range of products and options. Today, with our app the customer can purchase coverage for car, health and property to protect themselves against many unforeseen situations.

The number of customers who regularly use these services has already exceeded one and a half million. Our solution has also gained recognition among professionals. In 2018, VSK Insurance application was named the best service solution at the Time for Innovations awards, whose nominees traditionally include the largest companies in the country, such as Sberbank, Aeroflot and Samsung Electronics. In 2019, we were shortlisted for the final of the international competition The Digital Insurer Innovation Awards. The international community noted VSK’s innovations and the best customer service implemented in the VSK Insurance mobile application.

The application itself is very easy to use, even a less experienced online service user can intuitively navigate through it without the help of operators. And those who like to make decisions by comparing all the options on their own will be twice as pleased: the interface is organized in such a way that the user can see not only the cost and services included into this or that package, but also the items whose absence distinguishes it from other options. Thus, our customers can always be sure that they do not get unnecessary options or miss out on anything important. Our goal is to create a comfortable environment for interaction with the customer, to become a one-stop shop for them in any situation, especially when they need our support.

Bulletin Online
Bulletin Online

Date Published:

20 April 2020