Insurance innovation in Germany: InsurLab “Don’t just talk – do it!”
The #InsurLabDE in Cologne was chosen as one of the InsurTech hubs by Germany’s government-supported Digital Hubs initiative focusing on digital innovation. It was founded last year with an opening ceremony that took place during EXECInsurtech in November 2017. (See The Digital Insurer’s report from the event here). I connected with Sebastian Pitzler from InsurLab to learn more.
Sebastian is the Managing Director of InsurLab Germany and has a long track record of working both in the traditional and new space of the insurance industry.
Sebastian, if you were not working in the InsurTech space, what would you be doing right now?
My friends gave me the nickname ‘iPitzler’ because of my love of technical gadgets. I am admittedly a tech addict and would probably work in the tech industry. Apple or Google would be great, but also any cross-industry application like IoT, connected home and car would be very interesting field.
You have a number of innovative event frameworks at InsurLab Germany. Can you tell us a bit about your main activities to promote innovation and collaboration among your members and network?
All our events are about collaboration and bringing together insurers, startups, tech companies, and young talents.
Our club events take place every eight weeks. They are typically centered around one specific topic per evening which we kick off with some ignite keynotes and use-cases followed by networking. For example, our event at the AXA Innovation campus in Cologne last April brought together 120 decision makers and innovators. Our August event focused on ‘building digital ecosystems’ at VHV in Hannover and saw over 60 attendees.
Then we have our innovation workshops, which take place once every quarter. This is an intense one-day workshop with a maximum of 35 participants. The session typically features four to five highly relevant startups focused on a specific topic like blockchain, AI or customer communication.
We start the workshop with a keynote to introduce the topic and then the startups pitch and present a use case for the corporates to understand their technology and services. Afterwards, the attendees choose the startup they want to discuss with and separate with the startups to discuss applications in the insurance companies and possible Proof of Concept (PoC) ideas.
That sounds awesome! How did these work out?
We, too, were surprised about the success of the concept. Last time we had 36 company representatives from 29 of our insurance members working with the startups. This resulted in 10 PoCs of which now 3 projects have been created to build prototypes.
Pretty cool. So, what are your top takeaways to make these innovation sessions such a success?
- Have a low, select number of participants.
- Be specific in your invitation: We tell our member companies that they need to send decision-makers. The motto for our sessions is “Don’t just talk – do it!”
- A well-curated set of participating startups. We make sure that their ideas have a certain level of maturity in the selected topic. This brings me to a fourth point:
- Focus on a topic that is truly relevant to the members. We did this through a member survey at the beginning of the year to understand their topics of interest.
This year our quarterly workshops focus on:
Q1. Customer communication
Q2. AI & analytics
Q3. Blockchain & smart contracts
Q4. Fraud detection & prevention
Is that all in terms of your activities?
No, of course, we also have our anchor events like EXECinsurtech, which is organised by Pirate Global and presented by us in November in Cologne, or the Insurtech Week which we co-hosted with Startplatz in June in Cologne.
Then we have several special formats, like the legal day in which we look at regulatory challenges for startups together with our partner law firms; our innovation journeys where we take our members’ c-suite representative on trips to our partners Sosa & FinTLV in Tel Aviv and Finleap in Berlin; and we collaborate on bachelor and master theses with the Technical University of Cologne, for example.
That sounds like you are rather running an event organisation than an insurance innovation platform ?
We are for sure not an event organisation. We organize and realize several offerings, that create value. Another example is our Accelerator program. The selected, participating startups get to work in our co-working space together with our members, be exposed to a large number of relevant insurers and receive mentoring – from one member insurer’s top decision-maker and one from a senior partner from the consultancy companies (e.g. Zurich, KPMG, IDEAL, SCOR, NRW Bank, Gothaer). As we are a non-profit, our startups get all these benefits without having to spend money or give away shares.
What are success factors for startups in collaborating with corporate insurers?
Startups need stamina. I know that this is easier said than done and we are putting a lot of effort into communicating between our corporate members and the startups. At the same time, founders need to be aware of corporate decision-making processes. This also brings me to the second point: being able to speak the language of the corporates and understanding what issues the big corporates are dealing with is very helpful. We call this ‘corporate empathy’.
Finally, of course, you need to have a good product that actually solves your clients’ issue no matter whether your clients are the consumer or a corporate insurer.
Talking about issues, what do you see as the biggest roadblocks for insurers in their transformation journeys?
I think legacy is one of the biggest internal issues. No matter whether its processes, IT systems or lengthy planning and release cycles, they all tend to slow down insurers’ agility.
Of course, due to the massive scale of the change processes, limited resources and budgets are also an issue.
Externally, we should keep in mind that regulation is also a huge topic that keeps insurers busy whether it’s data protection, IDD, or solvency. This puts another heavy strain on resources and opens up the question: what data can be shared with which partner and how?
Finally, I see the war for talent in full swing. This extends not only to attracting and retaining the right employees, but also applies to attracting the right partners from the startup and technology ecosystem.
What are the most successful incumbents doing right in their digital transformation approaches compared to the others?
I think they first and foremost know that they cannot do everything by themselves. Also, decision-makers that truly support the initiatives are willing to take the risk that things might not work out as planned are incredibly important.
With this is mind, we see the following success factors:
- Having a good sense for picking the right partners.
- Assigning the best people to the mission and giving them the freedom to dedicate time and resources.
- Adapting their processes to quick decision-making and rapid prototyping – failing fast is key!
To wrap it up, let’s talk about the ones that have been in the focus all along – what do clients get out of all these digitalisation initiatives?
Well, I think that more client-centered product development is surely an important outcome. There is now so much more focus on User Experience and User Interfaces than ever in the industry before. Also, insurers start to feel the increased consumer expectations from the GAFAs. So, they have to raise the bar in terms of their processes’ client friendliness.
But to me, the most exciting point is the possibility to tackle radically new business models and product propositions that span across industries and platforms. So, if we look at smart home, connected mobility, cyber, health and prevention there is so much opportunity out there. In my opinion we have only scratched the tip of the iceberg in terms of what is possible.
As a final word, what kind of InsurTech startups would you like to see more of?
On the theme-side, we see a lot of interest in the field of blockchain and smart contracts. Furthermore, clever use cases for AI and particularly IoT will become even more relevant and offer great opportunity for innovations.
If you top that up with the necessary stamina and a dash of corporate empathy, I can predict a promising future for them! 😉