Meet the Insurtech Pioneer who Partnered with Deutsche Bank to Deliver Smart Insurance

January 23, 2019 BACK TO PRESS RELEASES

In this interview, Tim Kunde, CEO of Friendsurance, shares his thoughts on the problems facing insurance and how he is helping banks provide better insurance solutions for their customers. Tim started his career with The Boston Consulting Group, advising various companies on consumer goods and insurance matters. In 2010, he left consulting to disrupt insurance, launching the world's first peer-to-peer insurance in 2012.

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

When founding Friendsurance, we started with the cashback as we think customers should get something in return if there hasn’t been a claim. Centuries ago, people protected each other in small groups. In village communities, an individual got support when his house burned down. This was trusting and efficient. However, the financial possibilities were limited. Today, insurance companies can carry damages of any size. Unlike in earlier village communities, nowadays you have to pay in advance. The money is gone even if the insurance was not used. With this in mind, we have developed a peer-to-peer insurance model for our customers, combining the strength of large insurance companies with the benefits of small groups, rewarding staying claims-free within those groups and making insurance more affordable. 

This was the first of many services aimed at making insurances customer-friendly. Today, we offer these services and solutions to other companies (like insurances and banks) to reach even more customers and to reach our goal.  

Where do you see the primary pains and wishes from insurance customers? 

When thinking of what customers don’t like, I just think about what I don’t like: I don’t like complicated insurance products, I don’t like lots of paperwork, and I don’t like non-transparent processes. I think this is how most people feel. That’s why we just ask our customers in user test what they want.

Customers wish for easy, understandable, and convenient services, they wish for individual consultancy and a better overview of their insurance situation. Digitization has the ability to bring all this to customers. That’s why our digital bancassurance platform offers customers an overview of their insurance contracts and the possibility to manage and optimize insurance contracts online. In a representative study in 2018, we found out that more than half of the German population is interested in having these options – preferably on their online banking portal. We provide this platform as a white label solution to banks and insurance companies, implementing it on their existing platform. This solution meets a major customer demand: ability to manage all finances in one place. One good example of that is our cooperation with the Deutsche Bank. Here, customers will find our digital bancassurance platform on their online banking portal. They will see what insurances they have, for which conditions, and how they can optimize those. The all-in-one solutions bring value to customers and to companies. 

Bancassurance actually failed two decades ago. Why do you think now is the right time to give it another try? 

Originating in France, bancassurance was nothing else than the physical distribution of insurance products through bank branches. Usually, bancassurance focuses on life-insurance products. Due to low margins and sometimes the lack of knowledge or interest on the side of the banker, property insurances are less interesting to them. This strategy results in a low penetration of insurance products amongst bank customers and usually in a low cross-selling rate. This was rather a product, it wasn’t a very customer-centric approach.

Digitization and new regulations are now key for the new, digital bancassurance solutions we offer. PSD2 is a very strong trigger for digital bancassurance. So, the data stream that could potentially flow into the digital insurance platform is increasing. 

But it's also the right time because customers are ready for it! As I said before, the digital bancassurance platform just meets their needs. And finally, we have gained lots of experience with our own platform and we have the technological know-how to build and implement an extensive platform like this. That's why it's a logical next step for us to go this way and partner with banks and customers which maybe don't have such experience.

What is the advantage for the bank or insurance company you're partnering with?  

The advantages of having a platform as described are obvious – also to the companies. But these often struggle with time and cost-intense development and implementation. Our white label platform is a fast way to offer a high-tech solution to their end customers. And as our approach is modular, our customers can even choose between different features. It’s up to them whether they want a fast onboarding process, a pension planer involved, an insurance-needs analysis or a tariff comprehension within their digital bancassurance solution. What our business customers also appreciate, as Friendsurance is an insurance broker, is that we can even cover different regulatory aspects, like an independent consultancy. 

How do you expect the insurance business to evolve in the next five years? 

Compared to other industries, development pressure is lower in the insurance sector. The reasons for this are mainly low interaction frequency of customers, stable economic results, and regulatory restrictions. Therefore, the developments observed so far are rather incremental. In five years, however, the pressure on insurances will have increased so much that the developments will be more disruptive. There will be a clearer shift in the structure of the market, which will involve the consolidation of existing players, stronger entry of technology companies into the market and deeper integration between established and new entrants. The Internet of things and artificial intelligence will play a greater role in pricing, but also in damage prevention and calculation. There will be further shifts in the distribution channels, and especially stronger interconnections between the channels, thanks to digital possibilities. However, the industry will still be in the midst of a transition to an ecosystem in which established truths are being tested every few weeks rather than every few years - for the customers' benefit.

Learn more about Friendsurance

Co-Founder of Friendsurance, Sebastian Herfurth 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 value of partnerships in insurance. 
Secure your seat here.