The insurance world in digital change – building a Digital Transformation Unit
R+V Versicherung is one of the most renowned and largest insurance companies in Germany. The company is part of the Genossenschaftlichen FinanzGruppe Volksbanken Raiffeisenbanken and looks back on a long history of success – from its foundation in the middle of the 19th century to the restructuring of the corporate groups. But even with such a track record, digitalisation is an important challenge. Willms Buhse met the former R+V board member Peter Weiler for an interview.
Mr. Weiler, what attracts you personally to the topic of digital transformation?
The digital transformation brings with it many new issues, including the chance to make a difference. It is driving the industries and all of us as a society. I am personally particularly attracted to these diverse opportunities.
What do you think are the most important developments in the market? What surprised you?
About three, four, five years ago, it was all about online business models. That has completely turned around. Now the focus is shifting back to a stationary presence and personal skills. They are more important than often assumed. At the same time, the various customer channels are growing together and converging. Selling CDs and books online is easy, but many insurance products are highly complex and require explanation. As a result, there is also a need for personal contacts who can help drive the digitalisation trend. This is a learning experience: In general, we need to look more closely at start-ups and technology providers and consider collaborative ventures, even if many young companies have difficulty generating profits.
You have already seen and experienced a lot – are InsureTechs a hype for you?
I wouldn’t speak of hype, the InsureTech generation is developing into potentially interesting partners for us. At the same time I observe how some InsureTechs try to steal customers from us. We won’t be able to meet them. But many start-ups also develop alternative strategies if they do not succeed in acquiring their own customers quickly enough. This is partly driven by investors. In some cases, they may then be interesting again for a cooperation. InsureTechs are therefore not a passing trend. Many start-ups have already exerted lasting influence on the market. We have to move faster.
So with all this change, what’s left?
I see a change in customer behaviour. Customers are striving for more comfort and simplicity. At the same time, we are struggling with data protection guidelines and the handling of personal data – e-privacy and basic data protection regulations are currently causing a stir. Here, the InsureTechs have an advantage: Due to the lack of large legal departments, they are often more relaxed when it comes to data protection, and we don’t dare to that. On the other hand, we also have more to lose, for example our reputation. Consumer protectors simply prefer to look at the established providers rather than at InsureTechs.
Which new competences do you wish for at R+V?
New methods and knowledge are relatively easy to learn. Much more difficult are cultural skills – the mindset. But a cultural change is the success factor. Security and risk awareness are deeply rooted in our corporate genes, but they also hinder us when it comes to new things. Our current challenge is to move away from these traditional patterns of behavior that have shaped us for decades, to more courage and more willing to try things out. Not thinking everything through 120 percent and calculating risks – which we are very happy to do.
Mr. Weiler, what opportunities do you see for the business model of the Genossenschaftlichen FinanzGruppe Volksbanken Raiffeisenbanken through digitization?
Our major competitive advantage is an established relationship of trust with our customers and our reputation. In addition, as a financial services group together with the Volksbanken Raiffeisenbanken, we offer an omni-channel approach with presence and good advice on complex issues from our local contacts. The conditions are good, but the process is demanding and lengthy.
From your personal perspective, what is the role of the executive board in the transformation?
The role of the executive board in the transformation is obvious to me. Above all, it consists in acting as a role model. It must demand, encourage and set an example. The big challenge is to make quick decisions and have the courage to support unconventional solutions. Networked cooperation with the departments also means learning from each other. As insurers, we are used to calculating risks and tend to avoid them. Risk sensitivity is part of our business system, and solid work is a core brand value. These attributes and our image have helped us to be perceived as a haven of security during the financial crisis. The executive board has the task of reconciling this with the new requirements arising from the digital transformation.
Everyone is talking about agility – where do you see the potential at R+V?
We are already gaining good experience with agile working. However: The risk with agile working is that you proceed too superficially, too quickly and too simply. Agility does not mean that you don’t plan any more. It doesn’t mean chaos, but a systematic approach and discipline – the methods are easy to learn, but the right mindset is all the more difficult. Quick decisions bottom-up lead to acceleration. But even with an agile approach, there is no harm in thinking. Agility is not a magic solution.
What do you personally expect from a Chief Digital Officer (CDO)? What qualities does he or she need to bring with him or her?
The CDO with the division has a bundling and driving role, must actively shape digital change and align our digital activities with our strategic goals. It must take the company as a whole along with it, while maintaining contact with the other divisions and acting in an integrative manner. The CDO should increase the speed without losing the others. To do this, he needs communication and integration skills.
How do you assess R+V’s position on digitisation after the project with doubleYUU?
The cooperation with doubleYUU has helped us a lot. We knew that we had to do something, only how we wanted to strategically arrange it was unclear. How do you manage change, what are tasks and what options do we have for shaping and controlling them? These were the questions that needed to be answered and with which we had insufficient experience. From doubleYUU we received a lot of experience and also knowledge from other industries from outside-in. That worked well. Our challenge in 2018 is the acceptance and integration of these impulses in our daily activities. However, this depends heavily on the people involved. This year, also thanks to doubleYUU, we have created the basis for this so that digitization does not become a bureaucratic hurdle. We have enough of that anyway.
What do you personally appreciate about working with doubleYUU?
doubleYUU has managed to bring a very heterogeneous project team to common results using participative methods. In workshops we have developed many good ideas for the design. In the end our entire project team was behind the overall result. As a result, the decision-making process in the board of directors was highly consensual. This was only possible thanks to the good support and strategic steering by doubleYUU.
Thank you very much for the interview and the inspiring collaboration, Mr. Weiler.