We have a strategic competitive advantage for a digital era, being a composite insurer with a very large customer base, albeit entirely untapped.
That’s the claim being made by Mark Wilson, Group CEO at UK-headquartered insurance giant Aviva, a company with a long history. While the Aviva name itself was only coined in 2002, the firm can trace its roots back to the Hand in Hand Fire & Life Insurance Society in London in 1696!
It’s an interesting boast in terms of the awareness of the need to offer a different model of client engagement in a digital age for an industry that all too often has had a bad reputation. Wilson argues:
We're trying to do something that no one else in the UK can do. It is game changing both for Aviva and the industry. You'll see a range of products that we offer from pensions, ISAs, car, travel, home, health, but this range might be different for each customer.
So, imagine a scenario where you have a pension with us, and when you check your balance, you get pre-underwritten, pre-approved product with three clicks, with a discount.
Wilson cites the example of MyAviva, currently in beta test, as the shape of things to come. Costing £13.5 million to build over 12 months, this is essentially a one-stop-shop for a unified customer account, where users can log in and access information on all their Aviva products in one place, review terms and conditions and make alterations to policies.
As well as offering discounts on other products to MyAviva customers, the online offering also provides content that should be of interest to the customers, such as tips of home renovation and maintenance.
Wilson is particularly pleased that regulator Financial Conduct Authority (FCA) highlights MyAviva in its new discussion paper on Smarter Consumer Communications. He says:
They single out MyAviva as a good example of effective communication. They've even posted a video of the MyAviva app on the website. So, the regulators are also working with us.
The CEO also hopes that digital products will help increase the number of products and services taken up by individual customers:
Our average products holding per customer is inadequate at 1.7 products per customer. Our initial target here is three products per customer, and it needs to be high.
Money and mouth
Aviva certainly can’t be accused of not thinking digital. In September last year, it appointed Andrew Brem as Chief Digital Officer, reporting directly into Wilson.
Brem’s role is to focus on product innovation and development through data analytics, customer insights and risk management and will be responsible for direct distribution, interactive communication and claims handling as well as marketing and branding across social media and the mobile internet.
In a blog for Insurance Age in April this year, Brem provided some insight into his belief that the insurance industry is on the cusp of major change:
It is well acknowledged that this is the age of the digital disrupter - and that's as true in insurance as it is in any other industry. So if we are to survive and succeed in the digital age we all need to up our game - whether we are a broker or an insurer.
The winners in our industry will be those who keep up the pace - and constantly iterate, invent and innovate. And as an industry we're still waiting to be digitally disrupted.
We've seen an explosion of innovation in fintech (payments, banking, lending and investing). Insurance has not yet had much of a presence but I believe it's only a matter of time.
That's not to say customers want digital for the sake of it. My experience has taught me that digital succeeds best when it meets customers' needs with surgical precision. Off-the-shelf products just won't cut it. What we offer must be simpler, faster - and personalised.
To achieve this, Aviva has also set up a ‘Digital First’ tech hub in London’s Tech City area in Shoreditch. This aims to encourage digital start-ups to focus on insurance industry projects as well as bring tech experts within Aviva into one location to develop new digital offerings for existing and new customers.
Shoreditch is also playing host to an Aviva-led Insurance Tech Meet-Up Group, which meets regularly for peer-to-peer networking around Fintech issues. It also runs 'hackathon' events at locations such as the Google Campus.
It’s not just in the UK that Aviva is focusing on digital. Last week Aviva, the Monetary Authority of Singapore (MAS) and the British government signed a statement of intent to promote digital innovation in the insurance sector and help develop new business models and products in areas such as life, savings, retirement and health insurance.
The alliance will also be exploring options to promote competition, lower costs and minimise barriers to digital products and distribution. They also aim to support financial technology (FinTech) start-ups with expertise, resource and facilities.
And in a case of putting money where mouth is, Aviva is also setting up a "Digital Garage" in Singapore for technical specialists, creative designers and commercial teams to explore, develop and test new insurance ideas and services. Wilson explains:
Digital is not just limited to our UK business. We're doing initiatives all around the world.
The Singapore government has been very active in making Singapore a digital hub and help us lead the way in that insurance revolution.
This deal came out of the initial success of the UK ‘Garage’, he adds:
I had the head of the MAS here looking at our Digital Garage and London and Shoreditch. And he saw that and went back and decided – wanted to help us get him one in Singapore and be the hub there. The MAS announced they had put a specific team on making the regulation appropriate for digital and they're trying to be helpful, not harmful.
Admitting that it remains to be seen whether Aviva can replicate its UK success in Singapore, Wilson argues:
I think you will see a digital revolution in Singapore, and obviously we want to be at the front of that and that agreement we signed helps us be at the front of that. But we'll wait and see.
But the digital direction is emphatically set, he concludes:
I think it's happening everywhere now. I think it is easier here for us in the UK, for sure, because we already have the customer base. We have 16 million customers in the UK and we have one in four pensions, and pensions is the key to this. You have the pensions, you can handle the other products offered. And so far, although it's only in beta testing on small numbers, so far the results are extraordinarily. So we'll wait and see.
The insurance industry isn't the sexiest part of the finanicial services world, but it's ripe for 'Uber-isation'. Aviva's being proactive here and making some significant investments in some interesting areas. It doesn't mean the pureplay digital disruptors will be held at bay, but it does give Aviva more of a fighting chance at fending them off.