Insurance is a centuries-old industry built on products rather than services. Unlike banks, outfits such as Aviva haven’t strayed too far from this straightforward relationship, making them less attractive to a younger generation whose concept of ownership is changing. Fitting into these amorphous lifestyles is a challenge facing most businesses now but not many will be as big as the one in front of the 320 year-old insurer. By Aviva’s own admission it was late to recognise its business had to be fit for digital purpose, a problem it hired Razorfish 16 months ago to help It understand and launched its Garage division at the turn of the year to put those learnings into practice. But what does that shift mean for Aviva when it’s becoming abundantly clear that there is no insurance policy for the social, economical and political headwinds on the horizon? Essentially, it means scrapping the “jargon and numbers” that have come to define insurance claims Charles Reeves, the insurer’s global digital product director. Where it might have green lit “fairly dry” product for cab fleet managers to assess the insurance needs and risks of their drivers without much questioning, that idea eventually morphed into one for business owners to ensure they have safer roads – “it all came down to the idea of how do you protect kids, dogs and cats,” explains Reeves of how Aviva’s mindset is changing to a climate where securing the future of younger generations is never too far from the public consciousness. “The way it’s always worked is the industry says we produce stuff that people don’t understand so what we do is we get good sales teams to push that on other people and they are burned out by that,” he says. “If you think about younger generations they’re incredibly savvy about when they’re being sold to and it’s a real turn-off when they see through it. There’s no easy solution, and while it’s not the complete answer, Aviva sees the Garage as the foundation for future innovations. Imagine if an insurer could persuade people to cut out risk and consequently push down the cost of claims by tracking how they drove (through telematics) or their physical activity (through a wristbrand). Financial security is a clear and present danger for many so-called millennials and therefore there’s an opportunity to Aviva to offer more practical services. A recent Facebook survey revealed, the financial focus for nearly half of its millennial users was debt freedom. For another 20 per cent of the so-called “Generation Rent”, it was home ownership, the Financial Times reports. “We’ve mapped out human life from birth to death and beyond,” says Reeves. “It’s no longer about accumulation and decimation curves and actuarial tables. It’s about how do people recognise and visualise the future in a meaningful way.” One product that taps into that insight is the Shape my Future app, which could’ve easily been a “dry calculator” that’s all about numbers, plus “very abstract” for people to understand, but instead it allows them to look at what their future lifestyle will be when they retire and then adjust their spending habits accordingly. It’s products like these Aviva hopes steal a march on its rivals. Investors ploughed $2.6bn into insurance tech start-ups in 2015, according to CB Insights, while both Allianz and Italy’s Generali have digital hubs of their own. The opportunities appear to be bountiful. A survey by Boston Consulting Group and Morgan Stanley revealed that customers interacted less with insurers than with any other sector. “We’ve looked at what happens in people's lives over generations … we’re coming to the life cycles of our customers and saying 'where can be of help to them?', because that’s a great way to build trust and we want our customers to think of us as a great partner, really delivering and actually changing their lives … We know that a lot of people are over-insured and under-saved so if we could help them turn that around and do it in a way that made that meaningful then what would happen is they could essentially rebalance their insurance and savings,” he adds. Part of that turnaround is based on the dynamic between Aviva and Razorfish, one that Reeves says is unlike anything he has seen during a career that spans Activision, Yahoo, Hulu and Digitas. It’s far more fluid than the typical client/advertiser relationship, with staff from both sides regularly working in one another’s offices and the whole creative process being a more collaborative affair. It’s such a comfortable relationship that when Aviva wanted to hire two of the Razorfish executives it was working with, the agency did not attempt to block the move. Equally, Reeves would react the same if one his team wanted to move in the other direction, though assures that such things are not part of the plan. “It’s a bold move when you start to shift people from agency- to client-side and so we asked people on both sides if it was something that could work,” explains Reeves. “What it allows for is a level of continuity rather than someone who has to get up-to-speed.” Alongside its effort via the Garage, Aviva also made an undisclosed investment in Founder Factory earlier this year, an accelerator scheme that plans to develop over 200 technology businesses over the next five years. “Some of the work we’re doing is really foundational,” explains Reeves of Aviva’s recent investments in digital. “You have to build platforms to be able to support them. When you’re thinking about a 320 year-old company you’re thinking about how you make those changes for the long-term.”
Aviva is to overhaul its 320-year-old business to become a “digital-first” insurer, in an effort to serve the younger generation. Historically the industry has created products that consumers don’t understand and relied on strong sales teams to make sales, but the younger generations are unresponsive to such methods according to Charles Reeves, the insurer’s global digital product director. The company sees Founder Factory, the site it set up earlier this year to explore all things digital, as the foundation of its plans to innovate and has also invested in Garage, an accelerator scheme aiming to develop more than 200 technology businesses over the next five years.