"There are more and more startups that are at a much more interesting stage from a business point of view, not at the seed stage, but more scale-up stages. I think there is still a big challenge in how insurers can get the maximum from these startups."
With the new historical investment rise. Do you consider that the Insurtech market is still in a growth stage or is it going more towards consolidation?
It is a growing trend, and everything that has happened with the COVID, it accelerates it even more. This COVID trend towards digitalisation in all environments also acts as a driver for startups outside the healthcare sector. There are more and more startups that are in a much more interesting phase from a business point of view, not in the seed phase, but more of a scale-up phase. I think there is still a big challenge in how insurers can get the maximum from these startups.
At Savia we have set it up as a digital health insurance platform. We are very strong in the integration of third-party health services, particularly startups, in the application to make those integrations easy and in the management of data and user consent. Savia's value proposition is growing day by day and very fast thanks to startups and I will give an example of four of them that we have integrated into Savia's value proposition over the last year and in topics accelerated by COVID.
We have integrated the services of a company called Made of Genes, which carries out genetic tests, into the proposal for Savia customers. At Savia, we offer our clients solutions from Made of Genes and they do a genetic test tailored to the potential problems that you are going to develop related to COVID.
Another very interesting example is Smart Dyspnea, which has a Machine Learning algorithm that processes a recording of the client's voice saying something very fast and without breathing and is able to tell you if you have a blood oxygen saturation problem. For our part, we have taken that Smart Dyspnea functionality and integrated it into Savia, with a white label model. If you download the Savia app right now, you have access to this service.
Another need that has arisen with COVID is the need for companies to take care of their employees' health with health insurance. But health insurance has a barrier to entry, which is a high price, and not all companies can afford to pay for health insurance for their employees. Recognising this within our Savia B2B proposition, we have incorporated the service of other startups, which in this case is called Wellwo, which has a specific well-being platform for the employees of a company, where it incorporates digital solutions with content consumption, but to be consumed in a collective model.
We have also identified that, within the boom in the digitalisation of health, we are talking a lot about the equation of users, people, and companies that use the services. But on the other side of the equation are the doctors. Doctors need to be digitised in order to keep up, and the reality is that this is not the case. In the vast majority of cases, COVID has affected doctors who have been forced to talk to their patients using these platforms or WhatsApp. We have seen the opportunity to help doctors with this too and have integrated the services of another startup, in this case, called Docline, to offer them the possibility of going digital and everything a doctor needs to provide their services in the digital world. All these services are perfectly integrated into Savia.
In 2021 and 2022, we are expanding in Savia the services we offer, taking advantage of this great opportunity that is coming in digital by integrating third-party solutions to those we see most interesting. I think startups, particularly in healthcare, are very ready and very developed. And what do they need? In general, they need someone big to help them have critical mass, which is what they all lack.
In regard to post-IPOs results and the exponential growth of these startups. Do you consider there’s more hype in Insurtechs than real impact in the market?
Even if the startups are very good and the value proposition is very solid for the user, it is very difficult to grow in a B2C market and that is why there are so few unicorns. However, in a B2B proposition where they offer their solutions to companies that have a large volume of customers and can do the marketing that is more complicated for them, for me it is the perfect model. In this case, startups give MAPFRE what it doesn't have, which is the capacity for innovation and rapid development. However, we have the clients, the possibility of reaching them, and the trust that clients have in us.
We have 7 million clients in Spain. When I talk to startups, for example, Smart Dyspnea, Wellwo, or Docline, I tell them that 20,000 to 30,000 doctors are working for us, and that is attractive to them because in the end that critical mass is what they need to scale. In this case, the collaborative model between companies and startups is the winning way forward.
"For a relationship between startup and corporate to work well, three things are needed: apification, a Win-Win relationship model, and bidirectional humility".
Does your company consider itself an active player when it comes to investment and partnerships with startups?
Firstly, investment is a way forward and the big insurers are clear about this. During the Mobile World Congress, we announced the launch of a new phase of MAPFRE Open Innovation, which basically talks about the collaboration with startups and where the possibility of MAPFRE investing in startups is a very real possibility, either directly or through funds in which we participate, as in the case of Alma Mundi.
I believe in the flexibility of commercial relationships between insurers and startups because what one brings and what the other brings are perfectly complementary. For a relationship between a startup and a corporate to work well, three things are needed. The first is apification, i.e. that the integration of the startup solution into MAPFRE's core value proposition is a simple integration. As MAPFRE, I can finance the MVP involved in integrating the startup into MAPFRE's value proposition. We make ourselves available to the user and let the user say whether they like it or not. If the user likes it, then we grow together.
The second is a Win-Win relationship model between startups and corporate. Not everything you integrate with the startup is going to work and if it doesn't, nothing happens. This is not a failure; it is a learning process because this integration is done with low integration costs.
And the third, which for me is very important, is two-way humility. On the one hand, humility on the part of the corporate, we big companies tend to think that what startups do is easy, but that is a lie, we will never be able to do that because we do not have the hunger, the ambition or the orientation that startups have. Despite working in a big company, you have to humbly recognise that these startups are capable of doing things that I am not capable of doing. Humility is also necessary on the part of the startups, they have to have the humility to recognise that helping a large company like MAPFRE to transform itself is also changing the world.
If that balance of two-way humility is found on the part of both the large company and the star-up, things can work, but it is not easy.
Insurers are investing more and more in distribution channels and Commercial Lines of Business supported by Insurtechs rather than in Health companies. What is your insight on this? How do you foresee this trend for the following years? Related to Health, why do you think those investments decreased during this last year?
When we talk about health startups, they mostly help a single branch, which is the health insurance branch. But there are many branches of insurance, so these companies have horizontal capabilities. For example, cyber applies to everything, to health insurers, to life insurers, to auto insurers, while health startups probably compete in that market. If you were to complete an analysis and say that we are going to divide up the insurance market and we are going to put the health insurance business on one side and the rest on the other, and compare the startups, you might be surprised, because I think that in the health part, I have seen a brutal development, obviously led by the COVID.
As for distribution, in the end, it is a natural trend, and distributors play a very important role in digital. Many insurers have marketing networks to preserve or protect and this often makes them very ambitious and daring in terms of purely online distribution, which means that they can cover this part of their business by establishing relationships with third parties. It seems to me to be a natural trend and one that will continue to exist, at least in the medium term.
"If the big insurers want to compete and look the Big Techs in the eye when they come to compete in our field, the only way to survive is to reach an understood working model with the Insurtech and Heathtech ecosystem in the case of health.”
What is your perception of the interest of Tech Giants in the Insurtech market?
The value of Insurtechs is always the same, customer orientation and very intelligent data management. Lately, I see them very active in health, like Google's initiative with Verily and Amazon Care. Apple also has all the health solutions associated with wearables, Apple Watch, and so on. They are very strong, but they do not lose their core, which is to give a fantastic user experience and make very smart use of all the data they capture. Health data has to be the most protected data on the market obviously, which is a challenge. Big Techs feel very comfortable in this market because we are talking about user experience and data, and there is a gap between reality and what can be delivered, which they can cover perfectly.
What do Insurtechs bring to them? The insurance market is highly regulated, as is the case with banking. If there are certain startups that have solved that part of the regulation, then it is probably more profitable for a Big Tech to invest in those startups than to develop those capabilities on its own.
In my opinion, large insurers need Insurtechs much more than Big Techs. If large insurers want to compete and look Big Techs in the eye when they come to compete in our field, the only way to survive is to come to an understood working model with the ecosystem of Insurtechs and Heathtechs in the case of health. This is the only thing that can give us the user experience gap that Amazon, Google, and Apple bring as standard.
On the other hand, for Insurtechs, the Big Techs can obviously provide all the financing capacity and branding, so in the end, they obviously provide the critical mass that startups and Insurtechs need to function as standard.
We have seen mainly 3 roles in the ecosystems: owner, enabler, and participant. On the one side, we see insurers are participating in different ecosystems actively partners, but sometimes insurers are intending to build and own their ecosystems. What are the roles that you think that Insurers are playing in different ecosystems?
When it comes to large insurers, they have several cards to play. The same company can play at being a participant in one thing and an owner or enabler in another. In the case of MAPFRE, for example, we play these three cards. In the case of health, with the Savia platform, which is 100% MAPFRE, we are more of an owner of this ecosystem, where many startups coexist and where we propose a digital value solution to clients and companies.
However, with MAPFRE's innovation initiative, we are more involved and participate in equity funds, and the two things are perfectly compatible. In fact, it is not so much a right as an obligation for big corporates to work in the different systems to try to get the most value out of each of them.
One of the main pillars of ecosystems is Data. Sometimes data comes from within insurance. However, data is now required to be real-time and actionable, this source is most likely from outside the insurer. If Data is then, the main driver, will Insurers transform into data-driven companies, or will they just serve the ecosystems at the end of a value chain?
It is true that an insurer's data is very valuable because insurers have been data companies since the market was created 100 years ago. And it is true that what the world in which we operate is showing us is that we need to rely on third-party data for the pure insurance business. In addition, we as insurers can also develop our own initiatives that improve the data we have, such as the non-insurance services initiatives that many insurers are considering.
The case of MAPFRE with Savia could be one of them, which is based on non-insurance services. MAPFRE also has another series of non-insurance services, such as the "Te Cuidamos" loyalty plan or the "Multimap" value proposition for the home.
Non-insurance services cover a very interesting objective for large insurance companies, as they allow you to maintain a more frequent relationship with your customers and this frequent relationship allows you to know more about them, to have more data, and this allows me to fine-tune the insurance services proposal much more on the one hand, and on the other, to improve the link with the brand. There is a lot of data at stake here, but if we are talking about non-insurance services data, it is once again data that is the property of the company.
How would you define the degree of maturity of your company regarding participation in Open Insurance initiatives?
The reality is that in Spain today it is quite complex. How do we solve it? At MAPFRE, for some things we have our own sandbox within the Open Innovation environment, where we provide the startups that collaborate with us with the critical mass of data they need to be able to do their work.
I think it would be very good to have Open Insurance initiatives at a national and even European level to allow the Insurtech business, which needs data to be able to develop its work, to develop further. That will be a reality in a while, but we are not there yet.
Which trends do you see becoming increasingly important?
Internet of Things, Big Data, and Machine Learning are three closely related trends that will undoubtedly have the greatest impact on the world of Insurtech in the coming years.