Amid the tectonic plate shifting going on in insurance, BNP Paribas Cardif
Chief Executive Officer Renaud Dumora is remaining calm.
Here’s a conundrum. As the insurance industry uses ever-more advanced versions of technologies like artificial intelligence (AI), big data, the Internet of Things (IoT) and wearables to customise policies to people, a major survey has revealed that almost 60 per cent of us want to speak to a real human advisor when signing up. And there’s more. Seventy-two per cent of respondents say they would prefer a physical location to do so. Can this circle be squared?
Renaud Dumora, CEO of insurance giant BNP Paribas Cardif, which commissioned Ipsos to carry out the poll among 26,000 people in 26 countries across Europe, Asia and South America, is convinced it can be. People, he says, want the best of both worlds and, if that’s what they want, then that is what they’ll get.
“It’s true that if you fully automate insurance – the customer journey for underwriting, for example – your net promoter score increases by 40 or 50 points. It sounds like a contradiction but, in fact, it is not. People want to have automated, very lean, very fast processes, but when they raise their hand and say ‘I want to speak to someone’, you have to create an exit door and allow them to,” says Dumora. “That’s the best combination for customers.”
Maintaining human contact was one of four fundamental challenges identified from the survey by BNP Paribas Cardif, a wholly-owned subsidiary of banking giant BNP Paribas, which has 100 million insurance customers across three continents. The others were strengthening recognition of distribution partners as insurance providers (banks were in second place to standalone insurance firms, according to poll respondents); reconciling individual and collective benefits and supporting policyholders beyond compensation.
Somewhat reassuringly, the survey also overwhelmingly demonstrated the continuing demand for insurance products, particularly those that cover financial loss and serious illness. Having insurance was at the very heart of respondents’ expectations regarding protection and looking to the future. So, how is the insurance market, and in particular BNP Paribas Cardif, adapting to provide it?
According to Dumora, finding the right tech is part of BNP Paribas Cardif’s strategy
to invest in the global economy, and to do so with an eye on the changing attitudes
of stakeholders – including, but not exclusively, the policyholder.
Making the technology leap
Three years ago, BNP Paribas Cardif created a fund for startups called C. Entrepreneurs with Cathay Innovation.
“We have invested in 12 different startups in Mexico, Spain, France, the UK, the US, Israel and China, all working in very different areas like blockchain, AI, big data and new distribution channels,” says Dumora. “We invest only in startups we are working with. That’s very important. We invest, but we partner with them at the same time. An early stage startup is not enough; we have to accompany them in the growth stage, in the late stage.”
Earlier this year, the insurer’s parent bank committed, with three other French companies (Edenred, a specialist in prepaid corporate services; payments solutions provider Ingenico; and supermarket group Carrefour S.A ), to setting up a fintech accelerator and innovation hub in Brazil – La Fabrique – to boost digital transformation and aid larger companies in becoming more efficient. The accelerator aims to complete at least eight projects by the end of this year, two of which will be to the benefit of the bank’s insurance business.
BNP Paribas Cardif also runs its own accelerator startup lab, called Hackquarters, to improve corporate innovation, a programme that is supported by global giants including Google, Bayer, NEM and Red Bull. Since 2015, the Hackquarters team has been working closely with various startups to allow it to observe how insurance technologies can provide solutions to insurance providers and customers by minimising their risks and thereby optimising premiums. So far, it’s looked at how emerging technologies can be used to simplify complex risk analysis criteria; how IoT could drive down car insurance costs by tracking both driver behaviour and locations, and how wearable technologies can provide health data to build up a much more accurate picture of policyholders so that premium costs can be personalised.
In December 2019, Hackquarters also ran a competition called Disrupting Insurance Startup Challenge, in which fledging companies were invited to pitch their insurtech innovations. The overall winner out of more than 60 to pitch their ideas to a panel of judges was B2Metric, which uses AI-native analytics to manage underwriting risk management with fraud prevention insurance and finance. Second came User Vision, a platform where brands could quickly reach their target audience and get explicit, subconscious and implicit insights with AI leverage. And in third place was Musebirds, which designs alternative insurance products that improve the traveller experience.
All three will now receive investment from BNP Paribas Cardif, as well as advice and guidance from its own experts and those among its corporate partners to develop pilots with the expectation of bringing their ideas to market.
Dumora says projects like Hackquarters will continue to bear fruit by providing a conduit for fledging insurtechs and fintech to bring more innovations into the industry.
“The time when there was no relationship between startups and large corporates is fully over and now we see that, with this mood and energy, it is really a win-win relationship.”
The results of those collaborations are also bringing very real benefits to customers. AI, for instance, is being increasingly used by forward-thinking insurance companies to power chatbots, enabling potential policyholders to immediately obtain the answers they need.
Notwithstanding customers’ desire for human interaction, Dumora forecasts the adoption of such automated services will increase just as centuries-old
‘one-size-fits-all’ policies are replaced by highly customised products developed using algorithms and once unobtainable personal information from sources such
as IoT and wearables. Traditional insurers will have to adapt fast to keep up.
“I think that the main change will be in the distribution of insurance, because the environment is becoming very complicated for the customer,” says Dumora. “And sometimes it’s hard to keep all the solutions in your mind, so we need the help of artificial intelligence.”
Asked whether insurtech innovations, which have the potential to drive down policy premiums, will also help to democratise the insurance market, Dumora cites an example of something that is already up and running at BNP Paribas Cardif.
“We signed an innovative partnership with Birdee, a subsidiary of Gambit Financial Solutions, which we use for a pure online life insurance product starting at €1,000, which is quite small. It’s a sort of digital office for lower life insurance products, and that’s absolutely key, because making insurance accessible to the many is very important for the future.”
Making insurance accessible to a wider demographic is not the only fundamental change impacting the industry.
“The environment will totally change in terms of regulation, in terms of customer expectations, in terms of rates – by which I mean very low rates – in terms of volatility of the financial markets, and insurance will totally change, too,” says Dumora.
Amongst this change will be how the industry responds to demand for more ethical investment. With insurance companies among the world’s biggest investors, stakeholders have already put some operators under pressure to pull out of fossil fuels, for example.
“The future will be green; that’s absolutely key. At BNP Paribas Cardif, 98 per cent
of the assets of our euro fund are already evaluated against environmental, social
and governance (ESG) criteria,” says Dumora. “And, thanks to these assets under management, we have a positive impact on other industries in terms of growth and the economy in general.”
So, no, it’s not all about the tech. The insurance industry also recognises it must continue to heed the voice of its customers.