InsurTalk: The role of Insurance in the emerging digital ecosystems with Dr. Evangelos Avramakis, Lead Corporate Foresight, Intelligence & Development at Swiss Re

76% of insurers agree that competitive advantage will not be determined by their organization alone, but by the strength of the partners and ecosystems they choose. Because of that insurers will have to consider mapping emerging ecosystems to assess how they can best offer coverage. 

Our guest is Evangelos Avramakis, Lead Corporate Foresight, Intelligence & Development at Swiss Re. In this episode we discussed the role of Insurance in the emerging digital ecosystems and why it is so important to look at the ecosystems through a non-industry specific lens.  

Paul Blowers: IT insights in short talk interviews with insurance leaders about what matters to the industry. Hi, I’m Paul Blowers and I’d like to welcome you to another episode of IT insights, the intro talk series by Future Processing filmed here at the Vaults in the City of London.

70% of insurers agree that a competitive advantage will not be determined by their organization alone but by the strength of the partners and ecosystems they choose. Because of that, insurers will have to consider mapping emerging ecosystems to assess how they can best offer coverage.

My guest today to discuss this is Evangelos Avramakis, an internationally recognized expert in the insurance field. He is known for his ability to anticipate future industry and market trends as well as his expertise in emerging technologies and innovative business models.

Evangelos provides valuable insight on business opportunities to the corporate division of Swiss Re (transcribed as “Swiss rig”). Additionally, Evangelos has co-authored several publications and frequently presents as a keynote speaker at industry conferences. Welcome, Evangelos.

Evangelos Avramakis: Thanks for having me.

Paul Blowers: Very kind of you to join us today. Before we talk about the role of insurance in the emerging digital ecosystem, I understand that you have another passion – a keen interest in sports shoe design.

Evangelos Avramakis: Yeah, that sounds weird but indeed, indeed. I was studying sports sciences and part of that was, of course, performance. Performance is also part of the shoe, and I thought that is really interesting: how to design a shoe that you can run faster, better, smoother.

For joggers, that was solved somehow, but not for indoor sports, which is much more complex from a behavioral perspective. So I was focusing on how we design a new sports shoe design which is completely innovative, futuristic – that was a dream.

Paul Blowers: And actually, the question for me is, did you ever have the chance to design a shoe that you could actually wear?

Evangelos Avramakis: At that time there was very futuristic; now we see flavors of it, but it was not because of me, because others are doing that. And of course, I had to learn it the hard way – it’s not about the structural way of how shoes are designed, it’s more about marketing. Marketing is the look and feel, and the special marketing sponsoring famous sports figures.

Paul Blowers: Very good. Starting off, how do you define digital ecosystems and where are we with insurance involvement in them?

Evangelos Avramakis: The term “ecosystem” or “digital ecosystem” has been here for a long period of time, but everybody might have a different flavor or understanding of it. I think what’s going to be key is to differentiate between platforms and real ecosystems.

Platforms are where you try to combine the demand side and the supply side on a single platform, like Uber or Amazon.

But digital ecosystems look at the opportunity from a customer perspective; you try to fulfill several needs along his customer journey. This is why you need different suppliers, or “complementers,” that are complementing the value proposition on the platform.

It’s really about trying to understand what is important to the customer and finding complementers that fulfill those needs.

Paul Blowers: So who in this journey is responsible for managing the expectation and the journey of the customer? Who’s ultimately responsible out of the stakeholders?

Evangelos Avramakis: In general, this terminology is called orchestration. This is the orchestrator of this relationship – the entity that looks with the eyes of the customer. If you want to play the orchestrator, you need to be very, very good at relationship management because this is key.

You need insights from customers at your core because you need to translate those insights into potential relevant products and services. The complementers are just plugging into this, adding value to the “orchestra.”

Paul Blowers: I’m assuming the orchestra character in this scenario is the person that collects the revenues.

Evangelos Avramakis: This is one source, of course, because there’s value in understanding the customer and trying to orchestrate not only the demand side but also the supply side. But it doesn’t mean that the complementers don’t have anything. The question is, do you share the data among the different parties involved?

The more people know about what is there, the more people can add value-adding services to all stakeholders. That’s actually the value of this kind of ecosystem – it’s not just plugging in and not hearing anything; it’s getting access to information you didn’t have before in order to personalize and customize products.

Paul Blowers: In your view, is this something that is just going to continue to progress, or do you feel it could be a short-term fad?

Evangelos Avramakis: Classically, you try to plug in with something you know how it works, like a car insurance proposition for a mobility platform. But over time, you learn how to more personalize the products and services.

I assume we will start with classical propositions that are slightly customized, but over time we will get into a much more dynamic way of producing and complementing products together. I see much more personalization because data is being shared among those players.

The classical way is a backward-looking thing, but going forward, the insights you get from the data and from the customers is where future value will be generated.

Paul Blowers: Why is it so important to look at the ecosystems through a non-industry specific lens?

Evangelos Avramakis: Especially for insurance, that is very important because so far we did a very transactional business. We closed deals through brokers or agents and then didn’t really have a close relation to the customer unless there was a claim. Ecosystems are actually happening where the customers finally are.

If you talk about mobility, retail, or health, some of the classical touchpoints are not insurance players—they are somewhere else. These touchpoints are changing over time, so you need to make sure where to plug in without losing your old models.

Paul Blowers: You mentioned different genres – mobility, transport, health. What are the use cases from these B2B and B2C marketplaces, or potential synergies between those industries and insurance?

Evangelos Avramakis: What really makes sense to look at is if these touchpoints are changing. For a mobility producer like Uber, is it the same product? No, it’s actually a usage-based proposition, so your classical model might not fit. You need to understand the other side in order for the orchestrator to get the value you can create for their customers. The access channel is different, and you need to get prepared to plug in where these orchestrators are. You come from the classical business with legacy systems, but now you need to create a modular way of producing products.

Paul Blowers: Is there an industry within the digital ecosystem that is further ahead than others? Healthcare? Transport?

Evangelos Avramakis: In Europe, we still do business in a very similar way because we have very established relationships. This might not be the case in Asia. In Asia, the mobile phone has accelerated digital propositions directly because access was not given a couple of years ago. There, big healthcare, mobility, retail, and entertainment players are already orchestrating these relationships. Insurance rarely plays the orchestrator role; they usually play the complementer role. Playing the orchestrator role is very hard and requires fundamentally changing the business model and architecture.

Paul Blowers: You mentioned that access to data and insights will be the key to success. Could you elaborate on why?

Evangelos Avramakis: If you sell car insurance today, we don’t have a direct connection to the car or even the driver; our policy is actually “blind.” In a digital ecosystem, you get a lot of data on customer behavior and where they are clicking. This allows you to start personalizing your value proposition. The only thing you need to orchestrate is getting the consent from the consumer to use that information.

Paul Blowers: What do you mean by consent?

Evangelos Avramakis: Consent to use the information, of course, because the consumer wants to see if you are misusing the data or if they get a benefit. Consumers are very willing to share if they understand the risk and the benefit. The more you can personalize the proposition, the more the customer feels you are actually caring for them.

Paul Blowers: So the customer gets a better deal, and the insurer gets insight into the marketplace.

Evangelos Avramakis: Exactly. It’s about relationship management. Today we are completely blind. Think about the COVID time where risks were changing with respect to exposure, but our value propositions stayed exactly the same. Going forward, we should be enjoying more bespoke, personalized insurance policies after the intelligent use of data. But changing legacy systems to be modular and agile might take some time.

Paul Blowers: How do we need to transform to prepare for the future, considering how dynamic the digital world is?

Evangelos Avramakis: Change is hard for many corporates because nobody really wants to change until it’s probably too late. The key is understanding the “signals” in advance and how they impact our business model. If you start too late, it’s a double effort because you have to change systems and the way people behave. Having this anticipation will help a lot.

Paul Blowers: We live in a world where change is accelerating. Do you feel we are waking up to change at a quicker pace?

Evangelos Avramakis: Perhaps put it this way: change will never be as slow as it is right now. It’s just accelerating. We saw it with ChatGPT (transcribed as “Chat GDP”) and how fast things can happen. You need to be prepared to at least keep up with the speed of change, because change is here to stay.

Paul Blowers: This has been extremely interesting. Thank you very much for joining us. I’d like to thank the audience for joining us for another episode. Stay tuned for more.