Munich Re's Digital Partners: 'Diversity of thought' in action
Bethan Moorcraft, of Insurance Business, sat down with Courtney Hill, head of Digital Partners North America, to discuss the evolution of insurance experiences.
American entrepreneur Malcolm Forbes described diversity as “the art of thinking independently together.” That art is forever being tested and tweaked within Munich Re’s Digital Partners, which combines the best of reinsurer, insurer, and insurtech expertise to enable the evolution of insurance experiences.
Digital Partners launched in 2016 as a standalone entity within Munich Re. Digital Partners North America was blended into Munich Re Specialty Insurance (MRSI) in 2020, where it continues to provide insurtechs and digital distributors with a comprehensive, go-to market partnership for innovative insurance experiences.
“We all bring different expertise and perspectives to the table. It is a good definition of diversity of thought when you get a reinsurer and an insurtech in the room together – and that's important,” said Courtney Hill, head of Digital Partners North America. “As the reinsurer, we are very risk centric; we think about things in terms of lines of business, limits of capacity, and limits at the policy level.
“Meanwhile, insurtechs are excellent at observing what customers want, and capturing that buying behavior in new ways. We see a lot of insurtechs going direct to consumer, and making plays on the embedded side, and I think there’s a lot of value there. These players are accessing customers at the point in which they actually need insurance, and they're doing it through digital ecosystems.”
Digital Partners teams up with insurtechs, fintechs, scale-ups, disruptors, and mature companies to innovate and digitize insurance along the entire value chain. It offers insurance capacity, product expertise, data, analytics, technology, execution, and operational expertise – but only if every party is aligned on the value proposition and is willing to collaborate and learn together.
“We want to partner with folks that capture customers differently than the traditional market and who are capable of building technologies to digitally acquire and service customers,” said Hill. “We want to partner with folks who leverage data beyond the traditional market, and bring something to the table, whether it's a marketing play or leveraging data for rating and underwriting.
“We also want our partners to hire insurance leaders. That's really important because it helps us impart our learnings, and vice versa."
While Digital Partners has been successful at merging some of the best minds and ideas in reinsurance, insurance, and insurtech, Hill believes the collaboration can be optimized. Reinsurers must set aside some aspects of their traditional approach to business, she said, and insurtechs must leverage the years of insurance experience found in their traditional forebearers – despite attempting to transform or disrupt what they do.
“Collaboration is really about understanding what each other’s roles and responsibilities are,” Hill told Insurance Business. “What do we expect each other to bring to the table? Insurtechs need to understand that not all aspects of the value chain can be handled through some sort of online apparatus or online mechanism. Sometimes, you need people, and those people need experience and expertise.
The best collaborations happen when we think about the entire insurance value chain. Insurtechs are great at understanding pain points, and they’re the experts on the customer. But their insurance partners are really great at understanding traditional insurance infrastructure like rate versioning and accounting. The optimal collaboration acknowledges everyone’s strengths and uses transparency to establish roles and responsibilities.
Enhancing the customer experience
There is always an element of competition in digitalization, but Hill does not believe insurtechs are impeding traditional players. Rather, she believes they are enhancing the customer experience and giving customers a different way to buy insurance – which ties back into the Digital Partners’ promise to deliver innovative insurance experiences.
“Insurtechs are capturing customers who want to buy online. They want digital experiences, but that does not entirely replace the need for an agent, a wholesaler or retailer,” she said. “There will always be business that needs to go through those channels because you can't write them in a digital fashion – either we haven't figured it out yet, or maybe we have chosen not to completely digitalize it because there are too many manual touch points to make it efficient, and in some cases the customer just wants a non-digital experience.
“It doesn't mean that we don't deploy digital efficiencies at certain pain points in the process; it just means that it doesn't immediately all go online and cut out the agent. Even for folks that purchase online, a lot of them still want the option available to pick up the phone to make sure that they're doing it right. In my opinion, insurtech and digital enablement does not replace an agent or the traditional distribution channels; it just enhances the customer experience.”
Beyond digital acquisition – which Hill believes insurtechs are now “fantastic” at – the opportunities for insurtechs and digital distributors to transform insurance experiences are endless. The entire insurtech ecosystem has exploded with vendors in recent years, specifically service and data providers looking to partner with insurtechs to solve new pain points.
Where Hill sees a great opportunity for innovation is in claims, as she still sees too many cumbersome, manual processes. She said: “That’s the biggest gap in this digital value chain. How do we digitize and optimize the claim process more, making it more equivalent to the acquisition and servicing experience that these insurtechs are really good at?”
Digital Partners has evolved over the past six years, but its inherent value proposition remains strong – to enable and partner with insurtechs and digital distributors. Hill added: “As part of MRSI, we’ve repositioned Digital Partners to have a more balanced top-line and bottom-line approach. Our pipeline is open, and we’re looking for partners with whom to work that fit within our value proposition.”
This article was produced by Insurance Business America in collaboration with Munich Re.