14 Aug New technologies and continuity are the key to sustainable development in insurance

Three generations of experts in insurance and pension fund development: Todor Todorinski – Executive Director; Maria Mineva – Head of General Insurance Department; Nikolay Sotirov – Member of the Board of Directors

(collective answers to Maria Kouzmanova)

– We live in times of rapid change and constant technological evolution. How fast can a company grow in relatively conservative sectors such as insurance and retirement savings?

– The short answer is: as fast as it fully absorbs and exploits the vast theoretical and applied knowledge in the sector and keeps pace with the advances of the digital revolution. Since its establishment in 2008 as a health insurance company, DallBogg has reached a leadership position in just 5 years. Since then, we have been preparing for the unbundling of the National Health Fund, and in the meantime, in 2013, we expanded our license as an insurance joint stock company with a primary focus in general insurance and offered products in over 10 insurance classes – motor insurance, property, casualty, surety, liability, transportation and agricultural insurance. We have virtually stopped the advance of age and have remained forever young and in demand. After obtaining the license for the compulsory motor third party liability (MTPL) insurance in 2014, DallBogg achieved remarkable results in a record period – from 8125 policies in the same year, in 2015 we have already reached over 89 thousand, or almost 12 times more, to exceed 255 thousand policies in 2018. Since then, DallBogg has been among the leading insurers in Bulgaria, and to date we are firmly in the top three with over 515 thousand policies.

In 2015, our entry into new European markets also began – we have effectively launched operations in Greece, have a solid position in Italy and Romania, and have recently expanded into Spain and are growing in the Polish market. We are diligently preparing to enter Europe’s most competitive market – Germany – by the end of the year. At the same time, we have permission to operate in 10 more EU countries. Thus, in this otherwise conservative market, thanks to the knowledge and deep true continuity within the company, we have built and preserved over the years our impeccable reputation and the DallBogg brand has become highly recognizable in the sector, both at home and abroad. Our excellent performance and perfect capital adequacy have earned us the respect of regulators and the trust of customers on the one hand, and the strong support of our partners, including leading reinsurers such as SwissRe, MunichRe, AXA.

In mid-2016, we obtained a Guarantees insurance licence and here too the growth was not delayed – the premium income at the end of that year was only BGN 1,634 and BGN 20,673 in 2017 and already BGN 646,736 in 2018 to reach the impressive BGN 89 million total income for the last three years. These results have brought us into the top three insurers offering this important insurance for business development, especially in attracting large investments and the construction of key infrastructure projects for the country.

With the establishment of the DallBogg: Life and Health Pension Assurance Company in 2021, whose three pension funds achieved impressive returns in the first quarter of this year alone, DallBogg’s non-banking group has made the country’s financial sector very attractive to savers and investors. This is the only way the geopolitical and other challenges can be overcome, because otherwise our, the citizens’, inactive financial attitude to everyday life leads only to an unhindered, centralized and patriarchal – non-market budgeted – national economy: weak economy, weak nation.

– You really have a wide view! The dynamic development is also impressive, and what is the real recipe for success?

– Excellent financial discipline, strict adherence to sector regulation and general legislation, a linear profitable and flexible structure, investment acumen, a company culture of success with constant training of young professionals and development of competent creativity, management strictly based on expertise and predictability. Over the years, we have remained true to our spirit of openness and respect for client needs, along with a constant drive to provide well-informed choices within a competitive insurance and now retirement savings market. We have our feet firmly planted on the ground and have dreams for centuries to come: every day we are inspired by the constant challenges of team play and continuity – the experienced management and maturity of our veteran experts combine with the drive and modern solutions of our younger ones. Last but not least – the positive attitude on the implementation of new technologies. Because technical innovations have long been no longer just adding value to the services in the insurance sector, but in fact determining its growth and development. In recent years, the logic of the digital world, mobile networks, GPS devices and social media have had a huge impact on the way we communicate with our customers, research and respond to their needs, store, process and use information, process insurance claims – with much greater speed and accuracy.

– Clearly not afraid of European and global competition in Bulgaria! Is it true and if yes – why?

– We are naturally afraid, we are normal and honest, that’s why we mobilize – a few “fighting” millions against many but unorganized billions! We believe that is why every stone weighs in its place!

Imagine a near future of market capture and organized, intellectual and inspired supremacy! Regional entrepreneurial enterprises will never be surpassed in profitability and flexibility, in management dedication and honesty – this is recognized on Wall Street, in the City of London, in Frankfurt and Paris, in Singapore and Tokyo and even in Hong Kong, now China!

– How do you see the future of the sector going forward?

– With the rise of digitalisation and advances in data collection and analytics, insurance companies can better understand their customers and contribute to the modernisation of the country. In addition to anticipating inflation’s emergence from the darkness of unpredictability earlier than many, we are increasingly providing customised insurance products tailored to individual needs, risks and preferences – the customer receives optimally tailored coverages, terms and services. Our advice and requirements in each specific context often help increase productivity in individual businesses. In short, the future includes customised insurance and especially pension products, retirement savings for the modern man and his entrepreneurship.

Although the NZIA (Net Zero Insurance Alliance), established by the UN two years ago, is about to collapse due to the withdrawal of major insurance companies, we are convinced that the “green transition” cannot stop and must continue, supported by all legal means and forms.

Advanced algorithms can handle tasks such as coverage recommendations, risk assessment and fraud detection. This means faster and more accurate service at an affordable price. The so-called “Internet of Things” (IoT) is at the heart of the digitalisation of the global economy. Data collected in real time through electronic tags, sensors and cameras could be used in various types of insurance – health, export and especially pensions. For example, wearable technologies could monitor health parameters, telematics could assess driver behaviour in car insurance, and smart home devices would help us detect potential risks such as fire or water or gas leaks. We are well ahead in investment solutions thanks to our dedicated specialists in our Bulgarian and overseas offices.

Blockchain technology is also increasingly entering our work. The features of a transparent, decentralised digital register of traceable data, the so-called “blockchain trail”, are becoming part of the toolkit for fraud prevention, contract verification and claims. This technology has already shown us more than promising possibilities for creating a decentralised, transparent and efficient system for managing insurance processes – we are working towards wider implementation.

– And what is AI’s role in your field? Will you be cutting jobs?

– Many aspects of the insurance and pensions industry, from underwriting to claims processing or from savings to second pensions, can be automated using AI and machine learning. Telemedicine is entering, on a serious scale, with increasing success. This is helping to reduce costs, increase efficiency and limit human error. AI can automate the claims process, making it faster and more efficient. It can analyze damage in photos, understand the extent of damage, and even determine the appropriate amount to pay out.

Since its inception, DallBogg has continuously increased company employment with the discovery and development of talented, highly skilled and well-paid jobs. There is only growth and prospects that dictate this trend to continue – not only because the applications, direct regulation and “fine-tuning” of AI for various walks of life, including insurance, have yet to be more precisely developed, but also because our employees are in a constant mode of training and refinement to utilize, not be replaced by, AI’s potential, which in any case seems great:

•    Detecting insurance fraud in Bulgaria and in Europe: AI can analyse vast amounts of data to identify patterns and detect fraudulent behaviour. It can recognise inconsistencies in claims data, alert investigators to suspicious behaviour.

•    Risk assessment: algorithms can use large datasets to more accurately determine the level of risk in an individual area of activity or in relation to a particular person or business. Together with the skills and experience of risk specialists (actuaries), we will be able to set premiums more fairly because we will know clients and partners even better.

•    Better customer service: AI chatbots can respond to customer queries 24 hours a day, 7 days a week, providing immediate assistance. AI can also personalize recommendations based on individual customer data, which improves the customer experience, including reducing cost, increasing trust and the relationship with the company.

•    Discovery and development of new niche markets: a large part of the population in the Balkans (Greece, Bulgaria, Romania), millions of people insure themselves against risks only when it is absolutely mandatory by law (similarity in mentality, despite serious language differences) and therefore, with unpredictable climate changes and cutting-edge ventures, they increasingly find themselves in difficult financial situations. AI will greatly help to develop personal risk assessment and elevate the health, financial and insurance culture of large populations.

Of course, we would very much like to see higher education in Bulgaria reformed towards and with a strong focus on STEM (Science, Technology, Engineering & Mathematics). Society and we still have a lot of work to do to create and implement a regulatory framework that ensures AI takes into account the ethical implications and complexities of each individual situation, such as fears around data storage and privacy.

But one thing is certain: the future is already here and we are building it.

The full article is available here in Bulgarian.