C-Suite Europe: Technology opening up new avenues for insurer partnerships

The concept of partnership has been synonymous with the world of insurance for decades. This ranges from traditional distribution agreements at one end of the spectrum to public-private infrastructure investments at the other.

It's nothing new. Insurance companies are experts in partnering and they would rank pretty highly on any corporate dating website as a 'desirable long-term partner'. It's what we do. For many of us, Ageas included, it has become central to our business model. But success isn't a given.

Making the relationship work

To be successful requires a clear alignment of vision, purpose, culture and strategy, and complementary skills built upon a strong foundation of trust. People at every level of the organisation must have a strong resolve to make it work consistently over time. And when it does work, it is a beautiful thing.

But it comes with a price: be prepared to give up part of your control and to share in the rewards. In return, expect superior local market knowledge, excellent distribution capabilities and a ready-made customer base. And as a consequence, you will experience significantly lower risk than going it alone.

It's not an easy thing to do. Closing a long-term partnership deal can take anything up to two years from the initial contact, even longer in some cases. Just like a marriage, there is a period of courtship where both parties need to get to know each other before committing.

Each partnership is distinct, reflecting the unique nature of the market and the partners themselves. It is important to respect cultural differences and to create a win-win for both parties. Impose a standard global framework and, more often than not, trouble will be lurking round the corner.

Flexibility and adaptability are key characteristics. Successful partnerships require an important investment, not just of capital, but of people and time. If you believe you can successfully manage a joint venture remotely, think again. Be on the ground as frequently as possible, be engaged, and sit across the table from your partner if you want to build real trust. It's the only way.

From distribution to knowledge partnerships

So partnering in the insurance world is bread and butter. There's nothing new going on, right? Wrong. The type of partnerships insurers are now engaging in is evolving beyond distribution. New elements are coming into play that will disrupt the world as we know it such as data analytics, connected homes, autonomous cars, sensors - some of them wearable - and more informed, assertive customers. As a consequence, we need to have a better understanding of the impact of these developments and the role we can play as insurers. The important role of technology is leading insurers in the direction of new non-traditional partnerships based more often than not around knowledge.

Developments such as connected homes and driverless cars represent a revolution. Be part of it by engaging with those who are driving change or be left on the sidelines. Healthcare technology for instance will drive new types of partnerships between insurers and hospitals, pharmacies, elderly care homes etc. Car manufacturers and energy companies will become important allies and information providers to insurers.

Interestingly, in many cases insurers are being viewed themselves as highly attractive distributors: suddenly the distribution shoe is on the other foot. Insurers are among the biggest collectors of data in the world, but we haven't always used that data as well as we might. Partnering with those who know how to leverage data becomes obvious.

It takes two to tango - and insurers know the moves

Don't think that because these are less conventional relationships, there is a home advantage for the partner. Insurers have a lifetime of success in partnering. But always field your best and most knowledgeable people around the table. People who understand and can speak the language of the partner.

These partnerships are unlikely to be exclusive and they may be shorter term in nature. Regardless, the decades of experience gained in partnerships will help equip those insurers who choose to explore the wider market for the sake of their customers. Ultimately they are the reason we do this. It's a marriage of convenience in which all parties have a lot to gain.

By Bart De Smet, CEO, Ageas