Interview Gabriel Lazaro
We invite Gabriel Lazaro to talk about insurance and technology. He shared with us his views about the insurance market in Latin America, the future of the industry and the digital transformation of insurers.
Gabriel is the Digital Vice President of Chubb for Latin America. He has more than 15 years of experience in the technology and the insurance industry. He graduated from the University of Madrid with a bachelor’s degree in psychology, and from the University of Rome with a bachelor’s degree in marketing. He also has a master’s degree in business and marketing from ESIC in Madrid. Gabriel joined Chubb in 2016 as Digital Vice President for Latin America. Before Chubb, he worked for technology and financial sector companies in Europe and the United States. Gabriel is also an entrepreneur, an angel investor and advisor to startups. In 2014, he co-founded StartupHub.NYC.
– What is the current landscape of the insurance industry in Latin America concerning digital innovation? What are the trends that are prevailing in the market regarding technology?
GL: When we talk about the insurance and the technology industry in Latin America, we first need to understand where Latin America is standing regarding technology and compare it to the rest of the world. Currently, Latin America is only 12% of the Internet population. However, it’s a population with high access to mobile devices, and with habits of use that often exceeds the averages of other regions. It’s a region that is increasing the use and consumption of mobile technology.
In Latin America, there have been efforts to start selling insurance products through platforms such as Google and Facebook, among other social networks. Also, there are interesting approaches to create new shopping experiences through aggregators, especially with auto insurance policies. This approach has been in Latin America for a few years now with very active players who have established themselves as actors within the ecosystem of the insurance value chain. Furthermore, major insurance companies, banks, retailers and large brokers have developed websites with quote and transaction capabilities. I believe that in this sense, the region has made good progress in recent years.
But we are still at the tip of the iceberg; there are functional issues of the industry that must be solved. For example, the ability to purchase products online. At this moment, customers do the searches and interactions through digital means, but the closing of the sale still needs a strong human component, either from agents or through a telephone, and it is in these offline channels where the closing of the sales are largely carried out. Beyond the insurance industry, the penetration of credit cards and banking services in the general population is one of the biggest challenges for the development and advantages of new technologies. Also, it is important to consider the lack of insurance and financial culture in the region in comparison with other regions of the world. Everything changes and evolves at a fast pace, I see great opportunities, but we need to understand the stage and the transition moment in which we are now.
– Continuing this topic, do you think that the low penetration of the financial sector is going to be benefited from the high penetration of internet and connectivity that we see in the region?
GL: That perception can be misleading because even though more of 90% of the population has access to the internet and connect through their mobile phones, most of the consumption happens on social networks with a recreational nature. Platforms such as WhatsApp, Facebook, YouTube, and Instagram are the dominant platforms in Latin America, which means that people are interacting in leisure activities mainly. But if you measure how many of those people are active in eCommerce, the figures fall, reaching numbers below 35% on average according to the latest data from eMarketer, although with exponential growth in recent years.
An example of what could happen in Latin America is what happened in China. China is competing “face to face” with Silicon Valley regarding the evolution of services and features developed on platforms. Cases such as WeChat could happen in Latin America. For example, if WhatsApp becomes a payment platform between users, this would be a disruption to the region since people who use the platform will have access to electronic payments through the internet. When platforms like Facebook or WhatsApp offer money exchange and payment options to its users is when we are going to achieve greater penetration of financial products in the region.
We need to evolve the vision of the digital offering in the region beyond having a web page to sell products. There is an enormous opportunity since there are interesting digital ecosystems that allow you to create contextual offerings thanks to data and integrations with different ecosystems. This will allow a company to offer a specific coverage to the right person, at the right time, and the users could buy the product with a single click, without generating additional processes like sending the customer to another page to enter credit card information.
– From your point of view, where are the greatest opportunities and challenges to take advantage of new technologies? What are the parts of the business that are being impacted by new technologies?
GL: At the distribution level. What we have seen so far in the region are only developments of web pages that go from worse to better user experience and comparison sites or aggregators. However, I think these are only the initial players of what we can reach eventually. As we have seen in other regions, new technologies such as API’s and big data create better user experiences and services.
The use of big data available internally and externally opens the door to new opportunities, and this is how we will compete in the future. A great advantage of using big data and APIs is the ability to offer customized quotes without asking any question. Also, the context of the offering is a key aspect. Thanks to available tools, such as artificial intelligence and the ability to make decisions using large volumes of data, we can create unprecedented business rules and connect to different ecosystems and its digital platforms. This “virtual shopping malls” are the ideal platforms to offer contextual insurance ultra-personalized and ultra-relevant for the user in the exact moment. Improving the purchasing experience and adding value eliminating the friction from end to end.
At the product and service level, thanks to technology, the relationship between the insurance companies and the client (insurer-insured) is evolving significantly. The “product ” becomes the “service,” and with new product development processes focused on the consumer, the business model will evolve from a risk transfer-compensation model to a risk prevention model thanks to mobile technology like wearables. The underwriting role will evolve thanks to the technology and the ability to obtain and analyze new data from each customer, given additional capabilities to configure products and services. An example from auto insurance is that thanks to technologies such as ” telematics,” the market can offer pay-per-use models, creating a different user experience.
At the level of claims, there is the possibility of automation in many processes that now are manual; this is going to be a before-and-after experience. A new customer experience that not only will it be a better experience, but also a more efficient experience, which will be translated into greater customer benefits.
– What do you think is the role that Insurtechs are playing in the insurance ecosystem, are they a threat or an opportunity? How does Chubb see them in the region?
GL: We see it as an opportunity for the industry. Chubb is collaborating with some InsurTech companies. It is important to highlight that we have several digital distribution partnerships, multi-year, exclusive or preferred distribution associations that are reaching millions of customers in the United States, Asia, and Latin America.
In Southeast Asia, Chubb partnered with Grab, the main “on-demand” transportation company in the region. With the Grab’s application, the driver can select different insurance options to protect their vehicles, their means of subsistence and ultimately, even their families.
We partnered with DBS bank based in Singapore to offer insurance products (cars, home, travel) to its extensive network of customers in Asia. A key element of this partnership involves the availability of real-time payment capability for DBS customers.
In Latin America, we are selling accident and health insurance through telecommunications companies, banks, retailers, software and e-commerce through Facebook, Google ads and searches.
We are partnering with suppliers of new technologies that provide telematic, biometric, machine and environmental sensors to improve efficiency, effectiveness, and accuracy within our digital ecosystem.
We do not see it as a zero-sum game. For us, it is an opportunity to learn from new business models, but at the same time, an opportunity to share Chubb’s knowledge and experience with new players, such as the InsurTech industry, and even with new business models and new product development. It is an opportunity to improve and learn for both; we are always looking for joint opportunities to satisfy new customers.
– What is the meaning for Chubb of the term digital transformation? And how the company is preparing for it?
GL:Digital transformation is part of Chubb’s corporate strategy, and it is on the agenda of all the senior executives of the company. Therefore, we have the necessary resources in all fields; we are investing in the technology, in human resources, and in any field that is necessary to carry out a real transformation.
Chubb has been preparing to take a step towards a complete digital transformation from three pillars: technology, company culture, and product innovation. To make all the changes necessary in all the areas of our organization, we are putting the consumer, our agents and strategic partners at the center of the operation. All these human, technological, product and service capabilities are owned by the channel, and the goal is to provide the market with the maximum value and evolve to meet our customer’s needs.
– In your opinion, what do you think will be the main disruption that will impact the insurance market in Latin America in the next five years? Why?
From the insurance point of view, I do not see a big disruption in the next five years. In Latin America, I think we are going to have an acceleration in the business thanks to the technology, that is not only going to transform the insurance market but also the eCommerce in the region.
One of the engines that will drive this transformation is the growing access of the population to banking services through digital technologies. When we start to see options in the region where the user can actively and natively buy products in their mobile devices with one click from your phone and other platforms, we will see an important difference in the level of purchase penetration on the Internet.
Also, in the next five years mobile devices will remain the main platform. Today, the average is that we spend more than six hours on these devices, but we will see a takeoff because of the IoT and wearables. We will also see further development of ecosystems and integrated platforms (auto, home, etc.); the self-driving and electric cars will be a reality. I see a great opportunity in these platforms and ecosystems for the distribution and sale of insurance in a much more contextual, friendly and personalized way.
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