’Companies that are going to be fully digital are only companies that startup from scratch,’ says chief transformation officer
Only startup firms in the insurance industry will be able to adopt a fully digital approach, according to Axa’s chief transformation officer Frederik Bisbjerg.
During a roundtable chaired by Insurance Times technology editor Clare Ruel last week (7 June 2023), Bisbjerg explained that there were only a few companies in the sector that had become fully digital, highlighting Lemonade as an example.
The US-based insurtech was formed in 2015 – on 15 November 2022, chief executive Daniel Schreiber said that “Lemonade has been established as AI doing insurance – that is the foundation on which our company is built”.
Bisbjerg said that converting traditional “incumbent” insurance companies into fully digital operations was considered costly and impractical due to legacy systems and bureaucratic obstacles.
“Companies that are going to be fully digital are only companies that startup from scratch,” he added.
Approach
Panellists at the roundtable, hosted by Future Processing, explored current challenges and future opportunities in the insurtech landscape.
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Bisbjerg made the claims during a discussion about the digital future of insurance companies.
Sharon Stanley, manging director of information services firm GPM Development, also said that startup companies were looking to adopt a digital approach, but warned this would depend on a company’s “capability to move to digital”.
And she stressed that insurance firms had to take “the consumer” and “legacy” into consideration over their decisions.
“Consumers are much happier with digital than they’ve ever been,” she said.
“But, there’s still not a one size fits all”.
Generational gap?
Stanley pointed towards a generational gap as a reason for this, explaining that the “baby boomers generation usually want to interact by voice or in person”.
However, the younger generation “want to interact digitally”, she added.
“So, that digital [approach] doesn’t fit for everyone [and] traditional [methods] doesn’t fit for everyone,” Stanley explained.
Bisbjerg suggested that instead of companies completely transitioning, a middle ground approach can be taken, where a layer of new technology is added while maintaining some traditional systems.
He said that while the industry will become more digital over time, there will likely be an equilibrium between traditional and digital processes.
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