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I am German, and I am a die-hard soccer fan. Believe me, it’s relevant.

In my view, digital transformation in the global insurance industry is about to play out like a season in the Bundesliga, the German soccer league.

Every year we see the same procedure: A certain group of teams dominate, and in the end, Bayern Munich wins the national championship and the cup. But every year there are surprises, both positive and negative. Positive surprises are mostly smaller teams with tight budgets. They have great management, as well as talented, hungry players. Sometimes, even completely new teams enter the spotlight, driven by investors and regions hungering for a successful club.

Then there are the negative surprises: Teams like my beloved Hamburg Sports Club. After years of decay and mismanagement, these mostly traditional teams implode upon themselves and end up de-ranking in significance to the point of the lower leagues. Or they disappear completely.

No Surprises at the Top

The insurance industry in the digital era looks pretty similar. In Europe, the largest incumbents include Allianz, Axa, Prudential, Aviva, Generali, Aegon and Zurich, not to mention many very large reinsurers. It is very likely that all of them, despite challenges, will remain not only relevant but on top.


Kicking the Competition. Should the moment of truth come, and their position become endangered, I’m pretty sure they can just buy their way into the future by acquiring new competitors.
Compared with large parts of the market, these companies have started to invest in modernization. Though from the outside it occasionally may seem much too hesitant and far too slow, these companies are outstripping the rest by conducting one large-scale change program after another. In addition, should the moment of truth come, and their position become endangered, I’m pretty sure they can just buy their way into the future by acquiring new competitors.

Giants Ready to Fall

Then there are the negative surprises, the Hamburg Sports Clubs of the insurance industry. In Germany alone, there are more than 500 insurers. In Europe, hundreds more. In my countless talks with insurance company senior management, plus my time working with a number of incumbents, I have had ample opportunity to see into organizations that maintain an aging workforce and an overwhelmed senior management team.

I’ve seen multibillion-dollar insurers that don’t even have tracking on their websites. Most don’t sell the majority of their products online. There are many cases where the customer, who is accustomed to taking care of almost all needs online—shopping on Amazon, ordering groceries through Rewe, taking an Uber or Car2Go, and sleeping in an AirBnB—is obliged to go to an agency or broker and fill out paper forms to manage coverages.

After looking at digital products of European insurers, it seems that conversion optimization—or user experience as a point of measurement and improvement—are unknown to large parts of the industry.

After looking at digital products of European insurers, it seems that conversion optimization is unknown to large parts of the industry.
Considering that most of these “negative surprises” may still generate a respectable amount of revenue and profit, their downward turn might not be obvious at first sight. But I am convinced that a lot of them seem ready to fall.


The lack of fundamental skills and preparation mean that large parts of the industry’s C-suite, senior management and workforce simply are not ready to handle a successful digital transformation, even if management decides to do so.

There are exceptions, of course. It was a quite smart move on the part of Allianz, for example, to share their ABS CRM software with other insurers. My hypothesis: By sharing their software for free and allowing other insurers to move on their code base, it’s now cheaper and easier for Allianz to acquire and integrate these companies after they have reached their point of no return on the downward fall.

Small and Smart Players Using New Opportunities

There will also be positive surprises. If you attend any insurance, InsurTech or technology conference or talk to providers of top-notch digital products and services, including speaking with the cooperating technology companies, you will always hear the same handful of names. In Germany, you hear Baloise and very small players, such as the Deutsche Familienversicherung, working and releasing modern products and some digital services.

Baloise, for example, recently released an AI-driven image feature. You just take a photo of an item, and you receive an almost instant proposal for insuring the product. Not one paper form filled out, nor one foot stepped out of your apartment. Though this does not necessarily mark a step toward a completely new technology or business model, it is still leading in the market.

(Editor’s Note: Deutsche Familienversicherung, roughly translated to English as “German Family Insurance,” on its website describes itself as the first digitized insurer and the only functioning InsurTech on the German market. Insurance products described on a translation of the website include dental supplements, accident insurance, home insurance and personal liability, among others.)

Young Challengers—Results Unknown

Besides the regular players, in the last few years, other teams have entered the field, and most seem to not even play the same sport. For the sake of this analogy, these teams are the InsurTech startups. After a first wave focusing on attacking or improving parts of the value chain, right now we are seeing a second wave of digital full insurers rolling. Besides aggregators putting themselves between insurer and customer, we have not yet seen the “Uber moment” in the insurance industry, but there are also a lot of teams working in stealth mode.

A Big Threat: Tech Companies

New market entrants (with very deep pockets) are more horizontal tech companies, like Google, Amazon and Facebook in the West, and Tencent and Alibaba in the East. The rumor of Amazon opening an insurance department in London, aiming at the six largest European markets, caused widespread panic in European insurance boardrooms. Google mulling over checking accounts should make any bank senior manager nervous. The success of WeChat and WeChat-Pay in Asia could be transferred very easily to Western markets. We have not seen a massive attack yet by tech companies on the insurance and financial services industries, but I have the feeling that when they hit it will be a hard and merciless attack.


To me, the wild card is the reinsurers. Many have set up teams and created innovation hubs around the world, from which they massively support InsurTech and tech companies entering the market. I once witnessed a chat between senior managers of re- and direct insurers where the direct insurer asked a pretty emotional question: “Why are you guys supporting the people attacking us, after collaborating together for over 100 years?”

The response of the reinsurance manager: “Well, we are building our customer base of tomorrow, and we don’t believe that you’re going to make it.”

No need to say that they did not remain friends that day.

Crisis as Chance for Resurrection?

Tech and customer-driven InsurTech, reinsurers, innovating incumbents and tech companies are reshaping the industry because customers demand it. Some players are just now taking the first few steps on a thousand-mile journey.

The insurance and financial services industries actually have the unique opportunity at the moment to use the crisis of digital transformation, low interest rates and regulatory challenges, as a chance for positive self-improvement. Why not reinvent oneself and use the endless opportunities of the digital era to provide customers with exciting products and services, both digital and nondigital, with fully automated, AI-driven and blockchain-based tech and product stacks?

Why focus on relegation to obscurity if you could win the national championship and cup?

If the cards are played right, digital transformation will not mark the endpoint for traditional insurers but a new beginning and an opportunity to reclaim the lead in the life of the customer and, in the end, in the world economy.

Kiera will be discussing his views on the threats and opportunities that digital disruption presents for the global insurance industry at the 2018 Global Insurance Symposium coming up April 24-26 in Des Moines, Iowa. More information on the program and registration details can be found at