We are discussing the future of insurance with Emil Dimitrov, CEO of Revauxy, an innovative software company, delivering value in multi-aspect solutions for the insurance business and bringing digital transformation to tangible results. Software Group and Revauxy are partnering to provide end-to-end digitalization of the general insurance lifecycle and to support insurance companies in developing an ecosystem of services beyond insurance.
Mr. Dimitrov brings more than 25 years in insurance, innovations, and technology, leading strategic projects in partnership with high-level international technology companies in Europe, Israel, Turkey. He has created and managed a mighty team focused on developing IT strategies and designing solutions that accelerate digitalization and enhance efficiency. Among his achievements include the first mobile application for insurance business on Palm (PDA).
Mr. Dimitrov, which trends will shape the future of insurance, and how?
One of the significant trends which will define the future of insurance is the dramatic increase in access and diversity of the services. On the one hand, we will see an increase in opportunities for insurance companies to offer new products, new channels, and to operate on new markets, which they will use to cover the different insurance risks. At the same time, we envision ever-increasing opportunities for exciting and sophisticated products that appeal to a growing number of individual and business clients spreading out to more geographic, demographic, and public territories.
Following the very dynamic development of information and communication technologies, insurance can offer a wide range of risk covers that are more accessible for people and businesses. Insurance will soon be accessible for devices with artificial intelligence as well. Your smart devices will be able to recognize your international travels, and provide you with instant travel insurance. It will be able to debit money from your wallet, pay to the insurance company, and provide you with the necessary information after that.
With the emerging trend of connected cars, for example, insurers can use an individual’s driving data to assess and better understand the potential risk of an accident. This trend opens the door for innovative insurance policy offerings such as usage-based insurance, alternatively named “pay as you drive” in which individuals pay a premium dependent on the type of the vehicle, the amount of time, the distance, as well as their historical driving behavior. I want to point out an interesting example of a Swedish startup developing a Software as a Service (SaaS) solution that includes various perks such as driver identification, real-time tracking, and geofencing technology to improve safety.
Other examples can be provided in the area of home insurance, in which IoT devices prove themselves to be imperative. Smart sensors collect various data on a variety of things within the home, from temperature and weather to water and energy consumption. Such sensors can warn against leakages so that intervention can take place before real damage takes place.
What are the biggest challenges insurance companies are facing today?
One of the biggest challenges that the insurance companies have is related to the innovations in the creation and development of new insurance products, new channels of sales, and modern practices for claim handling.
I expect this process to be developing very dynamically driven by the new technologies, which are transforming the insurance sector, making it more accessible, and being influenced by ever-increasing client expectations.
Advancement in technology and the opening of new opportunities in light of digital transformation has posed an added challenge in front of traditional business and insurance companies – the emergence of digital insurance companies with local and global coverage. We can see examples of already successful, fully digital companies, which offer modern insurance products and manage their claims process entirely online. They use direct communication with their clients very effectively and without the participation of intermediaries. Modernization, digitalization, and automatization of the insurance business are not just an innovative approach for increasing the revenues of the companies, but also a vital necessity for survival on the market.
Another challenge that insurers face is related to having an understanding of what it means to insure individuals in an on-demand economy. The influence of on-demand technology spans much more extensive than just your everyday video-streaming at home. For instance, you can order a cab with a click or book a room at someone's home. People providing such services need insurance to protect their property and operate successfully. Insurers have to be prepared to deal with such unique situations, offering these customers the flexibility to pay for coverage only when it is actually required.
Customers demand seamless, personalized, mobile-first experiences. How can insurers attract and retain customers in a digital world?
In 2004, we developed and launched the first mobile application in Bulgaria, covering all activities of the claims handling process in the insurance companies – SmartClaims Mobile, working on the operational system PalmOS. This, surprisingly, for many, came at a time when we didn’t have Android, iOS, or Windows Mobile. Bringing the mobile app in the professional work of the insurance companies created a real hype and contributed to creating additional market benefits for our clients.
Nowadays, people cannot imagine their lives without mobile devices. Having access to information anytime and anywhere using smart apps and integrated systems has become a basic need. Insurance companies spot these trends in changing consumer expectations and invest aggressively in modernizing their communication with clients, partners, and intermediaries.
Insurance companies are confidently using new technologies to reply adequately to the expectations of their clients and increase their trust. For example, blockchain technologies, smart devices, and smartphones equipped with insurance apps, gather, store and transfer valuable information directly from the location of the accident to the servers of the insurer reducing the risks of fraud and misuse in both directions.
Besides, instant client service is a key factor for increasing trust in the insurance company. This is possible through client portals, call centers equipped with kiosks and mobile apps through which insurers can offer to their clients direct communication, self-service opportunities, express estimation of compensation, and immediate payment.
Forward-looking insurance companies are adopting a radically new approach. They are looking beyond their standard insurance products and offering value-added services that address broader consumer and business partner needs. They are positioning themselves at the center of an ecosystem of interconnected services that includes noninsurance offerings such as smoke, intrusion and leakage monitors for the home; telematic sensors for vehicles to reward good driving or trigger maintenance alerts; health diagnostics and advice; ﬁnancial planning, etc.
By developing an ecosystem of services beyond insurance, they can reinvent customer relationships, increase revenues, and reduce costs. Furthermore, insurers can boost loyalty among existing customers, attract new customers, and lower price sensitivity across their customer base.
Tell us more about the insurance landscape in Bulgaria - how is the sector evolving compared to other European countries.
The Bulgarian insurance market has not reached the peak of its potential yet. We can observe a relatively low level of insurance culture both from the citizens and the business. Furthermore, the mutual trust between the clients and the insurance companies is still not sufficient and stable enough. In comparison to the insurance markets in Europe, the sector in Bulgaria can be defined as underdeveloped. The positive aspect of this situation is that the potential оf the industry is vast, and it is yet to be serviced.
However, the insurance market in Bulgaria has some unique specifics compared to Europe. For example, car insurance dominates the other insurance products offered in the country. That is why we also have the widely spread practice to offer the so-called Full Casco car insurance at a significantly lower price than the cost for the same product in the developed markets. Having Full Casco without excess (or franchise) option means that your policy will cover and compensate for any single scratch on your vehicle if you can prove that it was caused by an insurance event.
In Europe, we can see such Casco coverages very rarely, and usually, their price is much higher than the customer is willing to pay. These specifics of the Bulgarian market remain essential when we talk about claim handling because they are related to having a considerable number of smaller claims. Under a typical scenario, the claim per policy ratio in the developed European markets is around 20% (1 claim of each 5 policies). However, in Bulgaria, this percentage is much higher – 65% (over 3 claims of each 5 policies).