LUXEMBOURG
XAVIER ROBLIN

Like the rest of the world, Luxembourg is experiencing the digital revolution and businesses need to adapt or are likely to disappear quickly. This is particularly true in insurance, a sector that was for long considered as conservative but whose business model is being challenged by the digital wave.

Take car insurance for instance. Even if the car market in Luxembourg is still buoyant, analysts generally agree that structural trends will reduce the number of cars to insure in the future. The boom of car sharing and car shared ownerships, like CFL Mobility, Carloh and City Mov’ in Luxembourg, will induce a smaller volume of cars to insure. And cars will more and more belong to fleets or municipalities with a higher bargaining power.

On top of that, autonomous vehicles are expected to be much safer than current human-controlled models, thus impacting the need for insurance in the future. Distribution models will evolve too: a manufacturer like Tesla recently launched a model with insurance included in Australia and Hong Kong.

Pricing models in the car insurance branch are thus under pressure. But digitalisation will also play a role on the home insurance segment. Even though the Luxembourg market is not ripe for home sensors yet, many experiences abroad show that detection hardware at home - for fire, intrusion, water or gas leakage - can trigger automated alerts to owners or first responders. This phenomenon will undoubtedly reduce the level of damages to homes and the need for this type of insurance could decline in the future.

In parallel, insurers are investing a lot to match rising customer expectations. For a decade, clients have been accustomed by the “GAFAs” (Google, Apple, Facebook, Amazon) to customer-centric interfaces giving them full command and control on their experience. They are now expecting the same from their insurer, be it for their car, their home or their life insurance. This expectation (called “ATAWAD” for AnyTime, AnyWhere, AnyDevice) is forcing insurers to invest heavily in IT projects and in innovation. Many of them, including Bâloise Luxembourg, have created in-house innovation labs and have hired Chief Innovation Officers to manage internal change and adaptation.

Amidst this changing environment, Bâloise Luxembourg, as a challenger on the Luxemburgish market, has voluntarily embraced digitalisation, seeing it as an opportunity for differentiation. An opportunity to become more relevant to clients and prospects, to evolve from being a simple risk carrier to becoming a value-added service provider. This vision materialised last month with the launch of GoodDrive: thanks to this product, young drivers can

now improve their driving style to reduce their insurance premiums. The better they drive, the less they pay: a smartphone app makes live measurement of their driving style possible and good drivers are eligible to a discount of up to 30% on the normal price. Further evolutions will come next, aimed at building an ecosystem of services around the car universe.

Let the word spread: innovation in insurance is now possible and it will not be stopped.

Bâloise Assurances Group

Insurance, pension and wealth-building

Founded in 1890, Bâloise Luxembourg provides a wide range of insurance, pension and wealth-building products to private and business customers in the Grand Duchy. Bâloise Luxembourg also works closely with highly successful banking partners and selected distribution partners outside its domestic market to sell wealth-building and pension solutions in a number of European Union countries. In March 2017, Bâloise Luxembourg ushered in the era of connected car insurance with the launch of GoodDrive, the first telematics-based car insurance solution in Luxembourg.