Yulia Gadliba, CEO of the Russian company Renaissance Insurance, on how to develop a digital business model centred around technology
Digital transformation is long overdue in the insurance sector.
Sluggishness from outdated processes and resistance to change downgrades customer service considerably and has a negative impact on the perception of the entire industry. Technologies such as artificial intelligence, blockchain and big data analytics can improve operational efficiency, accelerate decision-making and provide a seamless customer experience.
Renaissance Insurance was one of the first Russian insurers to take steps towards the digital future 10 years ago, but we began the company-wide transformation process in 2018, and we’ve gained some valuable experience along the way. Although insurance companies around the world are at various stages of their digital journeys, any organization can benefit from clearly articulating their goals and carefully considering the varying objectives of their partners and customers when selecting solutions and setting communications strategies.
A la carte solutions
Although each organization is different, broadly speaking, it is our view that insurance companies should avoid one-size-fits-all solutions but rather, select technology that helps achieve objectives while meeting the needs of both partners and customers. One complex process where technology can result in dramatic gains in both efficiency and customer satisfaction is the settlement of auto insurance claims. Artificial intelligence (AI) is well-suited to calculating damages, a role traditionally performed by company employees or contractors making independent expert assessments. Although calculations by people were of suitable quality, they were too slow and costly for a digital world. Renaissance Insurance was the first in Russia to incorporate AI on a commercial scale in calculating damages. We use computer vision to determine damaged parts and degree of damage; predict hidden damages and the need to remove and install additional parts for repair; and update catalogue numbers, determine the amount of repairs needed, and prepare a calculation. Through a single technology, we’ve both sped up the claims process and improved operational efficiency, resulting in more satisfied customers.
Although AI-driven claims has been a solid win for us, many aspect of a digital transformation will require more bespoke solutions. For insurance partners, speed is the main objective. We met this demand by enabling our partner network to rapidly connect through OpenAPI and created an open and functional IT platform. It used to take a month, on average, for Russian insurers to connect partners, but this technology enables partners to start selling policies through their own channels within a few hours, earning commission as soon as the next day. A result of this aspect of our digital transformation, we have dramatically increased our partner list, which includes the most advanced companies in Russia, such as Sber and Yandex.
On the other hand, the goal with customers is to maximise their satisfaction, which is affected by the cost of a policy, but also by how transparent and convenient an insurance company’s services are. Pandemic-related restrictions resulted in a spike in online activity during 2020 for all insurance services, including purchasing a policy, amending a policy, submitting a claim for damages, checking the status of a settlement and renewing a contract. Our initial efforts toward digital transformation prepared us for this, and all services were available through our website, mobile app, corporate WhatsApp channels or personal accounts on partner sites. However, the key takeaway is that although there have been far fewer restrictions throughout 2021, customer habits have already changed – in the first nine months of the year, direct sales increased by 59%. Insurance companies that have a digital business model in place will continue to benefit from evolving customer characteristics, for instance, a digital process is useful when attracting and retaining relatively young segments of the insurance market.
Develop clear objectives
As other companies advance their own digital transformations, they would benefit from starting with a clear understanding their goals, and then carefully planning their communication strategy to inform when, how and what technology is implemented. Our goal was not only to implement technologies, but also to increase the flexibility of our model and the efficiency of our business at various stages of the economic cycle. The next step was communications, and our key objective was to create a seamless way to communicate in a digital environment. We discovered that customising our communications and technologies approach to the varying needs of our different targets was the most effective way to undergo a comprehensive digital transformation, rather than endeavouring to develop or secure a universal communications solution.
Our experience shows that undertaking such a profound business transformation like digitalisation, requires in-depth knowledge of your business and careful analysis of processes, customer needs and the capacities of your infrastructure and staff. This approach not only prevents wasting time looking for and using one-size-fits-all solutions, but best positions the transformation meet the objectives of all stakeholders: employees, customers, partners and, of course, investors.