The Future of Insurance The Future of Insurance – Edouard de Lamarzelle, CEO, Stellantis Insurance
We met over a year ago when we were part of research Capgemini was doing on the future of Mobility and its impact on insurance as part of their World Insurance Report in 2023, which Lars Boeing joined the show to discuss. I shared my work on the Future of Auto Insurance with Edouard, and was excited to bring him on the show to discuss his take on the question given his rich background in the space and being a key driver in where things are heading.
Highlights from the Show
- Edouard began his insurance career while still in school, doing his master's dissertation on new entrants into insurance
- That lead to a roll at Volvo Group to setup an insurance business, which then lead to a roll with PSA (now Stellantis) to build their insurance business
- Why would car companies (OEMs) get into insurance?
- Total Cost of Ownership (TCO) - if insurance for a given car model is too expensive, people won't buy your car, so OEMs want to work to control insurance cost as part of TCO
- Diversification of Revenues - important in any business, and if you run it right, there's attractive margin in insurance
- Opportunity - insurance is a way to demonstrate to consumers that you care, and the perception of most insurers is that they're against you rather than trying to pay your claims, so OEMs are well positioned to be the solution to that issue
- But can OEMs succeed?
- They're very well positioned with existing assets – brand name with high loyalty and affinity, logistics and supply chains, key purchasing moments, repair and distribution networks, deep understanding of the physical product being insured, etc.
- They have the assets and resources, but the remaining challenge is execution
- There's also a question of whether the OEM has to be the insurer, or simply partner with insurance providers and capacity
- This depends on risk appetite, which is trickier in insurance since you don't know the cost of product until after it is sold
- Stellantis has looked at multiple models, from building their own insurer to partnering with insurers to working with platforms like Bolttech in each of their global markets to meet local needs
- Partnership matters because, even if you have your own insurer, you cannot and do not want to take every risk that comes in
- Car dealers still need to make the sale, so they need solutions beyond an OEM's insurer to be sure they don't get forced to say "No" to a customer who needs coverage
- We discussed whether OEM's push into subscription services means insurance mustbe part of the equation, but there are local regulations that need to be navigated that may not allow this, so Stellantis must have options for customers that could include an embedded insurance offering but has to include other paths
- The technology we have to enable new pathways for OEMs to sell insurance are completely different than ever before
- It's important for insurers to create far more technical capabilities to partner with OEMs as most insurers currently are not flexible enough for most OEM needs
- You can get the report at future-of-insurance.com/capgemini2023
- Download The Future of Auto Insurance: Connected, Embedded, Subscribed for free today
This episode is brought to you by The Future of Auto Insurance: Connected, Embedded, Subscribed, which you can download for free today, thanks to support from Guidewire. This report is part of The Future of Insurance book series, available globally from Amazon in print, Kindle and Audible audiobook.
Follow the podcast at future-of-insurance.com/podcast for more details and other episodes.
Music courtesy of Hyperbeat Music, available to stream or download on Spotify, Apple Music, and Amazon Music and more.