News that generated a lot of attention in the insurance industry and beyond in the fall of 2022: Incumbent insurer HDI and the InsurTech Neodigital have joined forces to develop a modern claims platform in an innovative co-coding approach. This is intended to enable faster claims processing. The development is taking place in coopetition - an approach that is still rare, especially in the insurance industry. Coopetition realizes strategic advantages for both sides and also improves the digital customer journeys for customers. It's an approach that not only excited the industry and the trade press. Also the Expert jury of the InsurLab Germany Collaboration Champion Competition was convinced and awarded both first place as "Collaboration Champion 2022.
The initial situation
The claims platform is a central core system of every property insurance policy and the basis for customer-oriented, swift and efficient claims settlement. As is the case with many competitors, HDI's claims system is as tried and tested as it is outdated. Today's consumers are also increasingly oriented toward the digital customer journeys they experience at companies like Amazon or Netflix. The insurance industry must be able to keep up - but that is precisely what HDI's current claims application landscape cannot do. Attempts at modernization have also often failed in the past. In-house development was rejected due to the expected lengthy implementation and high capacity requirements. Buying standard software, on the other hand, would entail very high integration and licensing costs as well as a loss of competence. So what to do?
The solution
In search of an alternative to the classic "make-or-buy" approach, HDI, together with Neodigital, took an innovative path: a mix of buy (setting up on the standard "Neodigital Insurance Factory" platform) and make (development partnership in the joint venture). The approach, affectionately known as "B-ake" by those involved in the project, combines the best of both worlds: Long-standing insurance expertise with state-of-the-art insurance technology and innovative processes. Specifically, the claims platform including digital and automated E2E customer journeys for all property lines of HDI Versicherung will be provided and further developed via a joint venture on the basis of a SaaS business model. The company MachDigital GmbH was founded for this purpose.
"At Neodigital, our goal from the very beginning has been to take the insurance landscape in Germany to a new digital and innovative level. We are delighted to be able to offer customers convenient solutions and real innovations through our partnership with HDI, and also to continue driving the digital transformation of the insurance industry."
Stephen Voss, Chief Sales and Marketing Officer of Neodigital Versicherung AG
The innovation
In view of far-reaching changes, significant investment requirements and limited funds, new, innovative forms of collaboration are required in the market. Traditional large-scale projects with terms of 10 to 15 years are incalculable and not flexible enough. It is not possible to react quickly enough to constantly changing customer needs and market requirements. In addition, speed and agility in particular are decisive factors for successful transformation today. In the search for an innovative process model, HDI and Neodigital therefore chose an approach that is unique in the German market and is based on a strategy that is still rarely used, especially in the insurance industry: "Coopetition" - the coexistence of cooperation and competition.
In order to reduce bureaucracy and control effort, the joint venture focused on agility and self-organization: A joint implementation team was formed in the joint venture, which implements the new claims platform in rapid iteration cycles with a high degree of autonomy and in a minimally invasive manner, based on the agile@HD model already established at HDI and the start-up mentality of Neodigital.
"We are pleased to further improve our claims service through the joint venture. Our customers will thus benefit from our many years of expertise and the combination of state-of-the-art insurance technology and market innovations. The best of both worlds, in other words!"
Dr. Adam Melski, Managing Director of MachDigital GmbH and responsible for the claims application landscape at HDI
The history and reasons for cooperation
HDI and Neodigital came closer together as members of InsurLab Germany as early as 2020 and have been conducting intensive rounds of exchange on potential collaboration since 2021. These culminated in the founding of the joint venture and thus MachDigital GmbH in September 2022. The reasons for the joint co-coding approach were obvious:
- Neodigital's insurance platform is mature and state-of-the-art. An experienced team of developers has built the platform and continuously adapted it to the requirements of the market. Neodigital is an InsurTech, but has successfully left start-up status behind.
- The Insurance Factory has been successfully in productive use for years - with a high level of automation.
- Aligning with the Neodigital standard helps HDI reduce complexity in its processes and "cut off old ties."
- The collaboration is one building block in driving forward the cultural transformation at HDI. As part of its "GO25" strategy, HDI has set out to transform itself "into a medium-sized company at heart". Neodigital is just that, a midsize company.
- Last but not least, a partnership like the joint venture was also financially attractive.
The outlook
Following the development of a minimum viable product in the area of motor vehicle glass claims processes, expansion for other lines of business is planned. In the long term, both parties intend to completely replace HDI's existing claims application landscape with the modern claims platform and increase customer satisfaction through excellent claims service based on digital customer journeys. In the long term, the platform is also to be made available to interested market participants, as they see great potential in this area.