In this interview, Dr. Stefan Knoll, CEO of DFV shares the story of how he worked with Amazon to develop the world’s first liability insurance, delivered directly through Amazon’s digital voice assistant, Alexa. He has led DFV to become Germany's first fully digitized insurance company and recently took the company public where they raised €52 million to invest more in sales and growth.

What problem did you set out to solve when founding DFV? 

The main challenge was having enough money for the foundation of an insurance company and afterwards having enough money available for business operations, especially for sales. I managed this by selling two companies, which I founded in 1994 and 2000. But I started from scratch. In 1988, after the successful completion of my law studies and my doctorate in law, I entered Allianz. After 6 years as Assistant to the Chairman of the Board and as Director of Allianz's most successful sales Directorate, I quit and became self-employed. 

My first company, which I founded in 1994, was called DIATEL DIRECT Assekuranz Marketing, a communications service provider and service provider for insurance and insurance distribution. In 2000, we incorporated the fast-growing company into a joint venture with Dutch SNT N.V. and SNT Deutschland AG was founded. As CEO, I successfully led the company into the 21st century. 

In 2005, at the peak of our success, we had 3,500 employees and service revenues in excess of €200 million. I took advantage of this situation to sell my shares of the company and use the generated assets to make my long-cherished dream come true: I had enough money to start my own insurance company – in 2007, DFV was born. 

We had to build our own IT system, which was the worst time of my life so far. In the end, we were successful and developed a digital insurance platform that allowed us to do business in real time. We use artificial intelligence in conjunction with an event-based process engine and flexible interfaces. This allows us to optimally integrate our insurance application and our customer portal and our customers can, for example, very easily make contract changes or submit complaints and receive an answer immediately afterwards. New products can be launched on the market within a few weeks and it only takes a few hours to implement product changes.

How are you using Amazon Echo's Alexa to improve engagement with insurance customers? 

In 2017, we were already the first mover in using Alexa as information and consulting-clerk. At the same time, we had the idea to use Alexa not only for consulting but also for selling insurance. Since May 2017, we've been deeply discussing with Amazon in Seattle, Berlin, and Luxembourg to convince them. Thanks to our proprietary IT platform which is a highly modern event and Java-based portfolio management system, we have finally succeeded in making the fully digital conclusion of contracts using Amazon Alexa a reality. Customers can now not only receive advice from Alexa but can also simultaneously conclude an insurance policy within only a few seconds. We started with our foreign travel health insurance in November 2018, then we continued with our liability insurance in December 2018 and we will be gradually adding the products from the “16er Matrix Kranken” (Matrix of 16 Health Insurances) and the “16er Matrix Sach” (Matrix of 16 Property Insurances).” So, DFV is the first insurance company in the world able to sell insurance via Amazon Echo using Amazon Pay for payments. This is the future of insurance sales. In my view, in 5 to 10 years, there will be no need to use a website for selling insurance anymore. Voice will be the key! That’s why we also want to convince Google to allow us to sell insurance via GoogleHome. 

How is the behavior of customers changing in the insurance industry and how is DFV managing the changing behaviors?

The insurance industry has not yet fully understood that digitalization starts first and foremost with the product. After all, how should digitalization work if the customer doesn’t understand the products or only with the greatest difficulty. A product that customers don’t understand has no chance of being completed online or digitally processed. That's why we have reduced 106 different products down to 16. Our simple16x matrix products: Just enter your age and get 16 prices for 16 insurance policies. All you have to do is choose. We are unique in the world by having this much simplicity. The result is that we only need one simple process, a product information sheet and a policy that covers all product families. An added bonus is that we’ve streamlined the health questions and simplified the entire application process.

Additional customers want to take out insurance as quickly and easily as possible. For this reason, DFV has radically simplified its final section. Thanks to Amazon-Login, the input of data is shortened substantially, saving precious time. In addition to conventional payment methods, we also offer the use of Amazon Pay or PayPal. This is a matter of course for us. We are the first insurance company to offer Amazon Pay and monthly payment with Paypal. After completion, the policy is issued. The entire policy process is fully automated and takes an average of six minutes. The customer then has access to the DFV customer portal, the DFV customer app, and the DFV customer wallet. The customer can use these digital customer services to manage his/her contracts and initiate performance and claim notification. In the case of submitted medical bills, artificial intelligence determines what content is involved and assigns the bill to a contract. It checks whether the medical service is covered by the contract concluded. 

Thanks to artificial intelligence and digital value creation, payments to customers are made quickly, easily, and fully automatically. Thanks to this AI-based digital capability, our record for regulating a dental bill is 45 seconds. That's real customer centricity! 

What are the advantages and current limitations using digital language assistants? How do you plan to overcome them?

Apart from regulatory obligations, there are no limitations for us, thanks to our modern and flexible IT.

You are the first insurtech to complete an IPO. Please elaborate on this decision and do you want to use the proceeds from the IPO?

Yes, you’re right, we’re the first Insurtech IPO in Europe and the western world! Due to this fact, the whole Insurtech community should support us, because I think our IPO is the beginning of the next era of the international insurtech movement. 

Let me give you some facts about our plans: With a scalable, in-house programmed digital IT platform, DFV is specialised in the sales and portfolio management of supplementary health and property insurance policies. The use of Amazon Echo, modern payment methods and the implementation of artificial intelligence facilitate rapid and highly-efficient processes. And by the way, we also have the best products, according to Stiftung Warentest (comparable to “WHICH” in the UK). 

And now, with the proceeds of €52 million from the IPO, we plan to invest more in sales and growth to enormously increase our growth. To give you numbers that illustrate our growth intentions: In 2017, we gained 40,000 new customers; In 2018, there were 50,000 new customers; In 2019, we want to double the result of 2018 and win 100,000 new customers. On this basis, we aspire to become the market leader in new sales in the segment of supplementary health insurance in Germany. But we also want to broaden our product portfolio and launch new insurance products. Furthermore, we are planning to enter one further European market in 2020. France, Spain, Italy, or the Netherlands could be eligible countries. 

Hear More About DFV

Dr. Stefan Knoll will be speaking at Insurtech Insights Europe 2019 in March where he will be joined by more than 2,000 insurance entrepreneurs, executives, and investors. He will be speaking about the key to winning customers over in insurance. Learn more here.