2 August 2017 07:00
Alex Veilleux | Photo : Alain Castonguay
Insurers must stop to monitor what their competitor does and simply follow the parade. In this digital era, they must adapt to their customers and not expect them to adapt to them.
Alex Veilleux, vice-president of innovation of Desjardins general insurance Group, was one of the experts present at the conference InsurTech Quebec, held in the framework of the Week of the digital, in Quebec city, at the beginning of April. Responsible for the strategy of «fintech» of the insurer, Alex Veilleux note that the offer of products and service has been greatly modified by the digital distribution. «In insurance, we are not perceived as being very agile nor brought on the change. We are no longer in the era where this is the customer to adapt to us, » he said.
He has worked in start-up technology companies in Silicon Valley and New York city. He notes the «exponential growth» of venture capital investments in the technology sector, associated with the insurance.
Within the venture capital fund, Plug and Play, an incubator launched in Silicon Valley and now established almost everywhere in the major financial centres, the technology sector in insurance has been launched only 18 months. The growth of the sector «insurtech» is the highest, across all sectors, known in Plug-and-Play, » notes Mr. Veilleux.
According to a study done on innovation in insurance between 1959 and 2007, the sector has changed little during this period. «Apart from the discount for the double contract, you can’t say that much has been innovated during this period,» he said, smiling.
Since 2010, and with its magnitude being renewed for 2015, the new «fintechs» attacked financial services. The distribution network has been attacked first. All segments of business insurance are covered by the new players of the most promising.
To come to Canada
The five companies with the highest capitalization are not yet established in Canada. These firms are themselves supported financially by the very large corporations.
Trov has among its shareholders Guidewire and Suncorp, an insurer in the australian. Slice has found the funds at XL Catlin and Munich Re. On his side, Lemonade is supported by big reinsurers, as well as by a subsidiary of Google. «What is interesting is that all the marketing of Lemonade shows that it is an insurer, even if the company does not use this term,» he says.
The big global insurers have started to create investment funds for uncovering innovative companies with the most promising. The insurer Mass Mutual has created its subsidiary in venture capital in 2014, with a budget of 100 million US dollars (M$). Since the end of September 2016, the fund, MassMutual Ventures has invested$ 81.6 MILLION of US in four companies.
Mr. Veilleux is estimated that if insurers want to become more agile, they need to attract the best talent. This is achieved by investing in startups. At Desjardins, we now think in terms of products, not projects, as has been the case for the module of telematics Ajusto, he said.
Mr. Veilleux cites a survey of the major leaders of insurance companies, of which 44 % stated that the lack of skilled human resources impedes their ability to innovate. To implement the culture of innovation, «we need to build a DNA that allows the failed attempts and the risk of failure,» he said.
He held his small team dedicated to innovation reporting directly to senior management. «We got the right to do things differently,» he says.
When Desjardins launched the Ajusto, the product was not perfect. «It continues to evolve «, adds Mr. Veilleux. Ajusto started with a telematics system installed in the vehicle in 2013. Since march 21, 2017, all services related to the product are now available in a single application.
It is not always easy to incorporate the innovation carried out to the external. Mr. Veilleux has seen great groups forcing startups to provide multiple versions of their platform, until the exhaustion of their resources. «We have to come to decide to launch even if we don’t have all the answers «, he insists.
For its Alert program to home insurance, which was launched on 20 march, his group has designed the product. The insurer, however, has funded a startup company to assist in the development of the platform and sensors.
The goal is to use the resources optimally. His background as an entrepreneur help to make the link between the financial giant and the start-up company. «By investing in a startup, we want to get the same performance as that required for a venture capital investor «, he says.
The insurer shall retain the intellectual property ownership of the application, but for all the hardware, he prefers to rely on the best suppliers, what Desjardins has done for Ajusto with Cambridge Mobile Telematics, and to Alert with Roost. «We’re in insurance, we are in the relationship with the client. It is not our role to find the best supplier of computer chips in Asia, » he says.
At its debut at Desjardins, we asked him news of his » bébelles «. Since then, the interest shown by the committee of management has greatly evolved, as shown by the time taken (less than ten months) to begin the Alert program, as had been the case for Ajusto. «Our partners have found that, for once, the big insurer was pushing hard,» he says.