Gunter Uytterhoeven, Chief Customer & Innovation Officer at AXA Partners & AXA NEXT
"New technologies have the power to foster customer interaction"
Innovation comes in many forms. Of course, there is a truckload of new technologies changing the way the insurance industry operates. But taking customers' needs as a starting point, innovation leads to creative new solutions - where data is also involved. "Installers of solar panels ask if we can 'insure the sun', so they can promise return-on-investment to customers. Of course we can, even if we're not Madame Soleil", says Gunter Uytterhoeven, Chief Customer & Innovation Officer at AXA Partners & AXA NEXT.
The insurance sector has an impressive legacy. "What we need, is to rethink our processes with fresh minds: people who look past processes, actuarial tables and 30-page contracts from many many years gone by. Only if we approach what we do from a different perspective, will we write a future proof story and avoid making only small improvements to what we already have", says Gunter Uytterhoeven. And he would know, as he himself is a prime example of that attitude: "I have a polyvalent profile - like a Swiss knife. By education, I am an economist and master in Business Administration. I started my career in audit and compliance from where I moved to Boston Consulting Group (BCG), where I worked on strategic missions, M&A, implementing pricing models..."
In 2007 you switched to the financial sector.
Gunter Uytterhoeven: "Indeed, I joined BNP Paribas Fortis - at that time, Fortis - as Head of Alternative Channels, which is how digital, apps, callcentes and ATMs where labelled in those days. When you talk about 'distribution channels', it's often mentioned in the same breath as 'digital'. 2007 was a significant year because it marked the birth of the iPhone. In the following years, innovations rapidly emerged at the heart of the company: Hello bank!, Easy Banking app, ItsMe, the online sales of banking products... That decade feels for banking like the 60's feel for music."
A lot was going on in the banking sector and yet, in 2015 you decided to join an insurance company: AXA Belgium. Why?
"As I mentioned, the banking sector had experienced a remarkable period with many innovations. That didn't go unnoticed by the insurance sector, that also wanted to step up its game in terms of digitalization and paperless work. As Head of Marketing & Transformation, that seemed like a challenging opportunity to me. AXA Belgium, being the market leader in non-life insurance in Belgium and collaborating with brokers, had outspoken ambitions We began with online insurance sales, online claims notification, and together with all colleagues at AXA Belgium, we modernized the company. The results were significant: the Net Promoter Score (NPS) increased substantially over the years, largely thanks to digital utilization."
"Early 2022, I joined the AXA Group, the world's largest insurer with 145,000 employees. The challenges related to digitalization and finding ways to operate differently were immense. Therefore, I embarked on a journey at AXA Partners, where we handle B2B2C-contracts on a local or global scale with clients like Club Med, Accor, Trip.com, among others. At AXA Partners, there still remains a lot of room for digitalization, especially considering the 80,000 calls we receive daily at our call agents. Each call being a customer who expects us to arrange assistance, mostly around mobility, health, home or travel."
"In parallel to being Chief Customer & Innovation Officer at AXA Partners, I manage the AXA NEXT team of innovation specialists that support AXA entities across the world in applying innovation in their daily work, typically with Open Innovation solutions from the marketplace (Insurtech, artificial intelligence, virtual reality...) These days we are developing solutions around AI applications, LLM (large language models), metaverse applications, the impact of sustainability..."
"Technology is a tool, not a goal. We never think: there's a new technology, let's see how we can apply it"
Innovation is clearly the common thread in your professional journey.
"And that's despite the fact that I never asked for it. ( laughs) Innovation actually always comes along somewhat accidentally. I always look for a challenge and when you try to do things differently, you sometimes - not always! - need a new technology. Nowadays, you quickly stumble upon AI and LLM. Ultimately, you want to improve a service to or the experience of your end customer. Technology is a tool, not a goal. We never think: there's a new technology, let's see how we can apply it."
"At AXA, we prioritize the customer as our starting point. Our colleagues in AXA's Emerging Technologies department possess a profound understanding of cutting-edge technologies such as the metaverse and LLM-like models. However, our focus remains on utilizing these technologies for the benefit of our customers."
If you start from the customer's needs, does that mean the Marketing department at AXA is the driving force of innovation?
"Marketing, sales & operations are the main forces for impactful innovation, as they are close to the customer. It's always the end customer who sets the tone. Innovation comes from various corners within the company."
"Creativity is crucial in innovation. Techniques like focus groups with customers can lead to unexpected perspectives"
Henry Ford said that if he had listened to the customer's desires, he never would have designed a car rather than a faster horse. Sometimes, you also have to provide the customer with something they don't realize they need.
"That's where creativity comes into play. Creativity is crucial in innovation. Techniques like focus groups with customers can lead to unexpected perspectives. Another powerful technique is the 'analogy from another sector'. For example, we once applied an airline's pricing formula to a newspaper in Singapore. It's a completely different sector, but the same principle applies. An airplane with 200 seats becomes worthless when they are unsold. Similarly, a newspaper with empty advertising spaces is also underutilized - both are perishable goods. However, the airline sector is much more advanced in pricing than a newspaper. By thinking through the analogy, we came up with an exceptional solution. A third technique is imagination. Think of ItsMe. The basic idea in 2013 was simple: we'll put the physical wallet into an app. Not rocket science, but it wasn't possible at that time. What should be included: payment and loyalty cards, passport, driver's license. The payments failed at that time; it was too early for the market. The loyalty cards didn't work either, but the ID-card did, and that part of the idea evolved in today's Itsme. And now, ten years later, we see many new possibilities for this specific application."
You work at both the Belgian and international levels. Are there significant differences in dynamics?
"In my current global role within AXA, I indeed have the opportunity to compare our way of working with the Mexicans, Chinese, Swiss, Americans... The major difference lies in the cultural aspect. I would characterize Belgians as pragmatic, down to earth, and quick decision-makers. They often operate under the radar until something concrete arises. Latin ultures have a more haphazard concept, while the Swiss-German model, on the other hand, requires a solid case before someone takes action. In an international role, it's important to understand the strengths and limitations of each of these models and adapt accordingly, or else you'll quickly encounter obstacles. While there are certain elements of an international AXA culture, such as integrity and a set of values, when you're truly in the field, you'll notice that there are country-specific values that can't be easily changed and must be accepted for what they are."
"Thanks to digitalization, innovation, and apps, we can establish more frequent contact, ensuring ongoing engagement"
Does the rise of new technologies pose a threat to personalized customer engagement within the insurance value chain? Think of losing direct customer interaction and chatbots replacing helpdesks?
"Indeed, the initial reaction might be that there is less human contact. However, with such innovations, we can actually foster more human interaction. In reality, as a consumer, you may not have regular interactions with your insurer. Yet, through digitalization, innovation, and apps, and instant messaging, we can establish more frequent contact, ensuring ongoing engagement. When we reach out, we always extend an invitation for contact, but it's ultimately up to the customer to decide whether to respond or not. One of the design principles in the customer journey is always offering the option for human contact, even though most customers may not feel the need for it. By the way, how customers choose to make contact varies by culture: Flemish individuals are more likely to send an email, while French-speaking Belgians prefer picking up the phone. Innovation must adapt to cultures. Scandinavian countries never relied on call centers and went directly digital. Similarly, in Africa, they skipped landlines and went straight to mobile. Today, we see that conversations with call agents tend to be longer in Latin countries than in Anglo-Saxon countries. That's purely cultural, and it's something we need to consider when adapting our customer journeys. While Apple can impose a global approach, as a local insurer (AXA is multilocal), we must choose a different path."
Are new digital technologies top priorities within AXA and AXA NEXT?
"Not just at AXA and AXA NEXT, in every company, data and AI are top priorities. AI has numerous applications today, and particularly the LLM models, such as ChatGPT. Because the latter generates texts and images on its own, I consider it a game changer. The AI we have already implemented within AXA remains primarily internal. It involves automating decisions, such as accepting or rejecting a claim. The end customer doesn't see that; the output remains the same. But now, with the next generative steps of AI producing various outputs, the current chatbots will be swept away, contracts will be simplified... This will have an impact on the end consumer. And suddenly, everyone is waking up. Many CEOs suddenly have their eyes on AI, but for that, you need data. This places data at the top of the agenda for every company."
"The customer doesn't ask for AI, but they do want a readable contract or the ability to consult with something smarter than a chatbox at any given moment. The customer has a requirement, seeking a solution to their problem; they don't specifically ask for a particular LLM, machine learning, or metaverse technology."
How important is it to collaborate to tackle current and future technological challenges?
"We don't isolate ourselves; we work with open innovation and collaborate extensively with insurtech companies and other tech companies - they are all on our radar. We don't possess the ultimate truth; we absolutely need to leverage the power of partnerships. It's our responsibility to manage our core processes effectively, keep our architecture in order, and conduct our customer analysis ourselves - that's not something we easily hand over. However, when it comes to technical solutions, we must rely on market solutions because we can't do everything alone."
You were talking about the need for data in order to feed AI. There's no lack of data at AXA, I guess?
"Insurers have an enormous amount of data. We handle it with great care due to privacy concerns. It's a competitive asset to compile the right statistics for pricing purposes. This works in favor of larger insurers because scale is necessary. Let's take the electric vehicle market, for example. Since we are present in so many countries, we have an extensive dataset immediately, even though the number of EVs per country is still relatively limited. A purely local insurer could never establish a correct risk profile in the same way. You can also search for new patterns in those datasets: there are quite some differences between fossil vehicles and electric vehicles. Just to name one of those new variables, is the weight of the vehicle: the heavier the battery, the higher the risk of a flat tire. That is also part of innovation: not looking at an EV through the lens of a traditional car. You need to set aside the entire model, engage in a new thought process and search for different data correlations."
"Travel insurance is the most complex and noble form of insurance"
AXA Partners' offerings focus on eight key industries. Do you see a difference in the level of maturity regarding the use/presence of data and new technologies in any of these industries?
"Airlines and OTA (online travel agencies) are truly at the top of innovation. This is because they have always operated with slim margins and have a significant number of variables and yield management systems for pricing, which they extend to insurance. Therefore, they have excellent data. We are experiencing strong global growth in travel insurance, and I particularly enjoy working for the travel sector."
"Utilities (gas, electricity) were traditionally state-owned companies, but they have evolved significantly and become modern retail businesses. They have a lot of customer data and seek to sell additional products or services to their customers, creating an intriguing dynamic. The banking sector on the other hand has a legacy of good data, but the industry doesn't change massively with regard to insurances."
Do you approach the industry with fixed products, or do customers come to you?
"Customers come to us. AXA Partners operates on a B2B2C model, where partners approach us, and we develop a product without disrupting our entire back office. This requires a good architecture. We need modular products like computable contracts for that purpose. This is quite innovative in the insurance sector and enables advanced automation. Without such capabilities, we would have to come up with tailor-made solutions time and again, which would put enormous pressure on the back office, considering we have around 3,000 companies as clients."
"For me, travel insurance is the most complex and noble form of insurance. It may sound strange at first glance because isn't travel primarily about fun? But travel insurance encompasses many aspects: trip cancellation, repatriation, air ambulance, damages, baggage... We have a global network of doctors, mechanics, etc., and our our intervention capabilities follow the sun, 24/24 across the globe. There are only four or five insurers worldwide capable of offering such services."
Already 6 years ago, AXA launched Fizzy, a product based on the blockchain which offers automatic compensation to policyholders whose flights are delayed. Ever since, blockchain seems no longer on the forefront of innovation within insurance. Do you still see a future for blockchain within insurance?
"Next to being based on the blockchain, Fizzy was also innovative due to the fact that it is an example of a 'parametric insurance' product. However, blockchain has somewhat faded from the radar in our sector. For me, blockchain has always been a technology in search of a problem ( laughs). I have worked on three projects involving blockchain applications, including Fizzy. With Fizzy, if your flight is delayed, we can see that in the flight datasets, allowing you to automatically receive compensation. These projects started as blockchain proof-of-concept pilots, and two of them went into production. However, we realized that blockchain technology was overshooting its target. Achieving the same results at a much lower cost is possible with a good API and a robust data architecture. That has been my experience with blockchain to this day. I don't question the technology and believe that blockchain can achieve remarkable results, but with AI being so widely applicable today and with API technology, blockchain has taken a back seat."
Can we expect more parametric-based insurance products that offers pre-specified payouts based upon a trigger event in the near future?
"Customers have new needs, and as an insurer, you must offer new products to meet them. One example of this is solar panels. Electricity companies come to us with the question: 'Our end customers find it quite expensive and want to know how much their final bill will actually be reduced, because, well, how much does the sun shine? Can't you insure the sun?' Of course, we can insure the sun. And so, we create products that automatically (parametrically) calculate the number of hours of sunlight based on public data. If there is insufficient output, we provide additional coverage so that the end customer can achieve their desired return, and the electricity company can convince their customer to install solar panels due to the insured return."
"Assisting over 100,000 people per day gives a great feeling. I love it"
You've worked with companies in various industries throughout your career as a strategy consultant. What do you think makes the insurance industry unique, and what challenges does that present when it comes to innovation?
"Two things attract me to the insurance industry: from a customer perspective, it's often very emotional (losing a home, a serious car accident, being stranded abroad, being unable to repay a loan due to an unexpected setback...), sometimes events that can make or break a life. So, I find it a very noble profession. Especially at AXA Partners, where we handle around 80,000 calls per day - and that's just the tip of the iceberg, as much happens digitally - and each call represents a person with a problem whom we help. Assisting over 100,000 people per day gives a great feeling. I love it."
"Secondly, internally, there is a vast amount of data, a unique resource that still has a long way to go in terms of automation and digitalization... We are working hard on that, but there is so much more that can be done on data and AI. The sky is the limit for data professionals in this sector."
What advice would you give to someone aspiring to pursue a career in the insurance industry?
"Come in with a fresh mind. The insurance sector has many processes, actuarial tables, and contracts from days gone by, a whole legacy. We are transforming all of that, but the sector needs people who look at it from a different perspective. We need fresh minds; otherwise, we will only make small improvements to what we already have. See the car, not the faster horse."
Gunter's data
80,000 / The number of people with an urgent problem that call us every day at AXA Partners.
12 / Kilometers is the distance I run every week to stay somewhat healthy. I do it all at once because I don't have time to put on my running shoes three or four times a week. Besides, I want to be back home quickly, so I run too fast. By the way, I just bought a new pair after eight years, and I've noticed that I'm running quite a bit faster with them. That must be innovation too, right? ( laughs)
3,9 / Each year, I try to go on three family trips abroad with my children, who still live at home. It's partly to alleviate my guilt for being absent often. Professionally, I travel to nine countries for work. That's what my year looks like: 3 and 9.