According to CEO Christian Mumenthaler, Swiss Re’s new partnerships with industrial partners such as Daimler and Ikea aim to overcome people’s natural aversion to buying insurance policies.
Speaking in an interview with German publication Handelsblatt, Mumenthaler explained that packaging insurance in with products sold by other companies helps consumers to avoid the neurological hurdles normally involved in buying a policy.
“Buying insurance is difficult for the human mind because we then have to deal with negative thoughts and think about probabilities,” Mumenthaler told Handelsblatt.
“Nobody sits down in the evening and has fun choosing a new policy – that’s why even cool and cheap digital insurers have it so difficult,” he explained.
“That’s why we’re trying to integrate insurance into another product that people like to buy.”
Swiss Re plans to offer new digital insurance offers with automotive manufacturer Daimler from 2021, and it began selling household and personal liability insurance in Swiss furniture stores this year.
“Our strategy includes developing new, innovative products,” Mumenthaler noted. “We want to develop fully digital auto and mobility insurance products in a joint venture with Daimler. We want to create a platform that integrates insurance products into the car purchase process and thus creates a uniform customer experience.”
Swiss Re will start its partnership with Daimler in France next year with plans to open up to further markets both inside and outside Europe in the coming years.
Mumenthaler acknowledged that the company is very much still at the beginning of this new partnership strategy, and warned that developing new products takes considerable time.
However, he added that there is “a lot of potential in the long term.”
“I can imagine that there is a wide range of business in partnerships with industrial partners,” he told Handelsblatt. “It won’t take over the entire insurance market, but there is tremendous growth potential with a platform like iptiQ – I’m sure of that.”
There have been some concerns in the industry that re/insurers would simply not be able to compete if large technology groups such as Amazon or Google decided to fully enter the insurance market.
But on this point Mumenthaler was confident, arguing that “the big technology groups are interested in working together, but they don’t want to get involved directly themselves. That is not financially attractive for them.”
With heavy losses from the COVID-19 pandemic this year and the prospect of low interest rates for the foreseeable future, Mumenthaler explained that Swiss Re will be charging a higher premium from its customers for some time.
“It is always psychologically difficult to raise prices,” he said. “But we are very strict on that.”