As financial institutions dig into the complex process of recovery, one truth is abundantly clear: They need to adapt to the "new normal". This requires businesses, across all sectors of the economy, to be bold, show resilience under great uncertainty and accelerate their pace of digital transformation. It's a sentiment shared by Metin Demirel of AKSigorta, one of Turkey's leading insurance companies, in our latest interview with financial services industry game changers.
Q: How has the pandemic affected the insurance business?
Let's be clear; Covid-19 is more than a health crisis. It is transforming businesses and even entire economies and societies across the globe. The insurance sector is not immune to these changes.
In April and May, we had lockdowns and travel restrictions. As such, motor insurance claims dropped sharply, along with car sales. Then, in June, our economic life bounced back with more car travel than usual, as people were cautious about using public transport. Governments also introduced stimulus packages, such as low cost loans and low interest rates, so we saw car sales jump like never before.
Now, we are seeing car sales go down again from the highs we experienced in the early summer. This is just one example of the rollercoaster times we are living in. It's challenging, but with agile decision making and a strong focus on building relationships with our agents, third parties and employees, we are making it work.
Q: Covid-19 put a spotlight on insurers, do you think it is a wake-up call to transform digitally and improve customer service?
Yes – although, at AKSigorta, we already use the latest technology to support our agents. Customers want their claims and queries handled quickly and effectively so it's essential insurers have fast, accurate and personalized digital offerings. We're well ahead on that score, thanks to our digital assistant, Ada.
Ada already handles around 10% of our operations. That's over two million interactions in the last year and this year it'll be much more than that. Ada is helping us, and our agents, stay agile and responsive to customers' needs.
We've also been using Robotic Process Automation (RPA) for over three years and it's extremely effective. Our business has doubled and our SLAs have improved dramatically. Yet, our employee numbers have stayed about the same. By automating many processes we have effectively created the equivalent of an additional 100 virtual employees – and that has given us huge leverage during the Covid crisis.
We have used that leverage to continue to improve our offer to the 15,000 insurance agents, brokers and banks across Turkey that use our services. Although, as an insurer, we have limited direct contact with our end customers. Instead, our focus is always on how we can support our distribution channels.
Agents have close relationships with their customers; they are like family. They understand exactly how to support and communicate with customers during a crisis. For example, if a customer is involved in a traffic accident, they call their agent who usually deals with the repair shop and takes care of everything.
It's essential that we provide an excellent service to all our distribution partners. That allows them to give the end customer a good experience. It's a kind of triangle.
We're also mindful that agents don't just work with one insurance company. They'll work with at least five and maybe ten. They can easily move customers from one insurance company to another, so they'll use the insurer that offers the most efficient and convenient service.
Q: Do you think we'll see more insurers pushing for regulators to allow digital signatures to deliver end-to-end digital experiences?
In the Turkish market, the regulations surrounding end-to-end digital experiences are quite flexible and many insurance claims are already handled digitally. In the future, restrictions on cloud utilization could have an impact. I think this is an area regulators could focus on.
Q: Covid-19 is changing many people's attitude to how and where they work. How do you see the future of work?
I'm responsible for retail underwriting, digital operations and IT at AKSigorta and we have been working very effectively from home since mid March. Thanks to Microsoft Teams, we've found that we can all be in a virtual room together and stay well connected. This has helped us to become more productive than when we worked in the office. We've also become more efficient by using our digital assistant for some of our internal operations.
The pandemic forced us all to work from home. But, we took an innovative, agile approach and combined our teams into squads. When we worked in cubicles in the office, it was actually more difficult to work in an agile way because that set up was designed for hierarchical organizations.
Our employees have really embraced remote working. Commuting, especially in big cities like Istanbul, is a challenge and it's inefficient. Even waiting around for the elevator in a high-rise office creates inefficiencies.
Remote working is also a big motivator for employees. They enjoy working in a less hierarchical way. Now, we are all on Microsoft Teams, everyone can do their job effectively and no one worries about whether someone is a director or a manager.
Q: How has VeriPark helped you to during these challenging times?
We have been working with VeriPark for many years, especially on CRM. Although we work with distribution channels, we still need to monitor our customer touch points. Car repair shops, for example, act on our behalf and the service they provide to customers affects our brand reputation.
When we implemented VeriPark's CRM solution, VeriTouch, we integrated more than 20 partners and even outsourced part of our call center. This has been a huge help to us, especially during the Covid crisis. The call center service is amazing and I was particularly impressed by how smoothly they transitioned to home working; VeriPark's tools definitely helped with that.
Q: What are the future plans for AKSigorta in a post-Covid-19 world?
I believe this is going to be a new world. We will not be returning to how things were before and the businesses that adapt will be a great success. Those that can't adapt will probably not survive.
AKSigorta is adopting an agile working environment because it is the right fit for this new world. That means working remotely on a flexible schedule. We are already working with a consultancy to plan how the whole company will work like this from now on.
Working in an agile way is the key to future success. Covid-19 is accelerating our digital transformation and it will bring new products, processes, and customer and employee experiences. Silos and hierarchies are the old world and, even though insurance is a very legacy heavy industry, we should not try to go back to the old way of working.
Q: What do you think should be the key priority for insurance companies in this new world?
We are investing heavily in Artificial Intelligence (AI) and machine learning, especially on the pricing side. Insurance pricing is challenging since you are giving a price for something that is not certain. And, you need to segment customers to give them a fair risk price.
We have already started to see the benefits of this investment during the Covid crisis. By applying AI we can reduce our prices and improve customer experience with faster decision making. But, crucially it also means we can constantly monitor and adapt our pricing to increase our market share and profit.
If you would like read more about the CRM digital transformation partnership between AKSigorta and VeriPark, you may find this case study interesting.
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