When did you start in the credit insurance industry and what stations have you been through to this day?
Gero: After studying business administration, I completed a 12-month trainee program at Euler Hermes (EH) in 2008 and then worked as a general agent in Stuttgart until 2012. From 2012 to 2014 I was assistant to the sales director of Euler Hermes Germany and then until 2019 Head of Sales & Broker Management at the headquarters of EH in Paris. I have been Sales Director DACH at Zelros since January 2020. Zelros positions itself not only as a technology and AI company, but also as an insurance expert, with a clear industry focus and a clear mission statement: to put artificial intelligence at the service of the insurance industry and help market players to become the leaders of the future.
How did you perceive the digitalization advances in the credit insurance industry over the past 10 years?
Gero: In principle, it has to be said that credit insurance is still a fairly manual product. Although there has been some digitalization progress in the areas of risk analysis and billing, there are hardly any significant developments in the areas of sales, contracts and claims.
Why do you think credit insurers are having such a hard time with digitization?
Gero: The problems of credit insurers also lie particularly in the success of their globalization strategy. The big providers have pursued a strong expansion policy for years and bought local credit insurers around the world. On the IT side, this has led to the situation that large corporations have to work with countless different systems and different processes. In this way, it is very difficult to develop digital processes on the basis of an integrated platform that are also valid worldwide. To solve this problem, enormous investments would be necessary, which could possibly depress profit significantly for a certain period of time. In a world in which the short or medium-term shareholder approach predominates, such investments are difficult to implement internally, even if they are indispensable for the continued existence of the company in the long term.
In which areas of credit insurance do you see the greatest potential for digitization and artificial intelligence?
Gero: In risk and commercial underwriting in particular, I see great potential for digitalization progress. AI can make the processing of a lot of data / information-, the recognition of patterns in possible claims, and decision-making way more efficient. Although many credit insurers already process data / information in their scoring models, these models do not automatically learn in order to avoid mistakes from the past for the future. The increased use of AI can make processes more efficient and give customers the feeling that the underwriting is more individual and less rigid. AI can also reduce the use of portfolio risk measures in times of crisis and thus significantly increase confidence in the product.
What advantages do you see through the use of AI in the interface to the customer and in the sales process on the insurer and broker side?
Gero: In the sales process, AI can help identify potential customers who are more likely to close. This helps to use decreasing sales capacities in a more targeted manner. Brokers can also reduce the risk of their own broker liability if AI supports them in finding out whether the customers have really insured all risks in line with the market in the international benchmark and can explain this more easily to customers on the basis of data analytics.
Do you think that technology companies like Amazon and Google will enter the credit insurance market and possibly oust established providers from the market with their superior digital solutions?
Gero: Yes, in any case. The insurance business offers attractive margins. The necessary tools have long been available at the technology groups. B2C processes have already been digitized and B2B processes will follow, which will make it way easier to start with digital credit insurance solutions. However, I don’t think credit insurance will lose its relevance. The importance is likely to increase. In my opinion, which providers win the race depends on the respective focus on digitization.
Thank you for the discussion Gero!
Gero Reiniger
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