EP 194 – Susanne Møllegaard – Partner and CEO at Process Factory – Have Insurers Become InsurTechs?


Michael Waitze worked in Global Finance for more than 20 years, employed by firms like Citigroup, Morgan Stanley and Goldman Sachs, primarily in Tokyo.  Michael lived and worked in Tokyo from February 1990 until December 2011.  Michael always maintained a particular focus on how technology could be used to make businesses more efficient and to drive P/L growth. Michael is a leader in the digital media space, building one of the biggest and fastest-growing podcast listener bases in the region.  His AsiaTechPodcast.com show has listeners in more than 170 countries and his company, Michael Waitze Media produces some of Asia’s most popular podcasts.

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The Asia InsurTech Podcast enjoyed speaking with Susanne Møllegaard, a Partner and the CEO at Process Factory. Susanne thoughtfully enlightened us about the biggest trends in insurance and InsurTechs in the Nordic Region, where the Process Factory is based. Susanne noted that incumbent insurers in the region are becoming more like InsurTechs and that Open Insurance is also gaining momentum.

Check out the best efforts transcript of our conversation below:

Michael Waitze 0:03
Hi, this is Michael Waitze. And welcome back to the Asia InsurTech Podcast. Today we are joined by Susanne Møllegaard…You’re a good sport, by the way, a partner in the CEO of the Process Factory. Susanne, it’s great to have you on the show. How are you?

Susanne Møllegaard 0:24
Fine. Thank you, Michael. And thank you so much for inviting me to the podcast. I have been looking forward to it.

Michael Waitze 0:30
It is completely my pleasure. What do you think is the biggest trend in insurance and InsurTech in your region? And maybe tell people where you’re based as well?

Susanne Møllegaard 0:41
Yes, I can say that Process Factory is based in Copenhagen in Denmark. So our primary focus is the Nordic Region, working, you know, solely together with the insurance industry, and all the insurance companies, insurance vendors and so forth. And from my perspective, I think it’s also important to note that if you take the Nordic Region, it’s very digitalized. To my opinion, when I look at the industry, I see that InsurTech sort of has been adopted by the insurance industry, the incumbents. So, whereas some years ago, you would see all these clever insurer tech startups primarily it insurer Tech’s then today, I will say that, that I see that the insurers have become insurer Tech’s, and most of them, at least the ambitious ones, they have a very ambitious agenda will digital and twin products and so forth. So I think one of the trends is that the insurtechs InsurTech agenda has been adopted by the incumbents. So that’s one of the big trends. The other one I would mention is actually the open insurance agenda. That even though for many years, insurance, they have sort of kept that data to themselves, they are opening up also seeing that they have big benefits for the the end consumer opening up in the data.

Michael Waitze 2:22
So these two, these are two amazing points. By the way, I want to dig super deeply into that, can we get a little bit more of your personal background, just for some context, then I want to come back to the two things that you just brought up?

Susanne Møllegaard 2:34
Well, I can say that my personal background, I’m I’ve been in the insurance industry since 94, and also been part of some of the big insurance in Denmark, on the business side, among other things I’ve been on, on the claims management about in one of the big insurance. But besides that I’ve always had big interest in how your support business processes with it. And that’s actually I know, 934 is a long time ago, but still it was already there, prevalent that you were trying as an insurer to support the business processes will it not as brilliant as today, but and then in 2014, I left sort of the insurance company to become CEO of process factory. And we an IT company, I’d see local market, specialist competences where we actually assist insurance system then does the local market specialties. complexities, for instance, in integrations to third party systems.

Michael Waitze 3:44
So this comes back to what you were talking about at the beginning of this conversation, this idea that incumbents have adopted the InsurTech strategy, right, in a way they become InsurTech themself. I guess the key thing for me is you’ve watched all this happen in real time, particularly from your project process factory. What changed? Like, was it just having the bear poked? Do you know what I mean? All these InsurTechs are coming up saying we should fix this. There’s some value chain innovation to do here. There’s some process innovation to do here. Like what was the impetus thing for insurance companies to finally say, Okay, wait a second, we need to be more like that.

Susanne Møllegaard 4:23
Yeah, good question I got what I saw was that from the beginning, they were very scary, all the brilliant InsurTech companies because they came with the ideas of how to use technology to actually improve the business model or the insurance. And in the beginning, quite a few actually tried to sort of protect themselves against this wave of innovation. But slowly I think that I think actually based a lot on also the public discussion about InsurTech they started actually collaborate Writing will InsurTech and trying to understand how did they learn the work? What did they see of potential in the way you use technology to improve what you can offer the consumer. And then, of course, slowly, you start seeing organizational changes in the insurance companies, they start adopting the technology. And then I think the most important part is also understanding that it’s not so easy to disrupt insurance, and the young InsurTech, they might have a lot of knowledge about technology. But insurance is also very capital intensive, very, a lot of know how that you also need to add to the equation to actually make changes in the industry. And I think that there was a lot of self confidence to be gained from that. And the thing that is actually a collaboration, a competition,

Michael Waitze 6:02
when when I was sitting on a portfolio trading desk, right, which is highly technology intensive, we used to have to make this decision, like do we build it internally with all the resources that we have? And Goldman Sachs or Citigroup? Or do we buy it from a third party vendor? Right? In other words, do we build it or buy it, constant push and pull right in industries? If if, in fact, incumbents have decided now that they need to be more like insurtechs. In a way, this gets back to this idea that one of the gentlemen that I had on the show a few months ago had it was that in short, text will go away. But insurance companies will do it, but still rely on external developers to help them build the ideas that they have. In a way, this is great news for you kind of, but do you see that mindset changing internally at these big companies when they decide that they need to be shoretex? Or have that mindset that they still need to get some of this development done externally?

Susanne Møllegaard 6:59
Yeah, I think so. Cause the problem for big insurance is that they are struggling, will they the visions, they actually find the fly very fast. But they are struggling with a legacy and slow development internally, and I have seen good cases where insurance collaborate with some of the inputs x. And when they do that, and it’s money, it’s also important that they let them work independently on the big mesh of the big machine. Because you also see all cases where InsurTech support or make collaborations with insurance, but they die because of because they try to make them fit too much into the equation and the big insurance. But I believe that the SEC driven insure checks, they can, they can still assist because they are they’re still adding the different viewpoints, different angle and the supplement what you can do on the inside, but to make it work on a larger scale, and so forth, then the picture insurers have the machine to do it. But to prove the concept and to actually get something out to the end consumer, I think the smaller players, they are more agile in doing that.

Michael Waitze 8:23
Do you think that the big insurance actually may have an advantage when it comes to localization in the sense that they’ve kind of always let their independent businesses live under the same umbrella, but operate locally? And then if you’re gonna build software enhanced businesses, like maybe you can talk a little bit about how the nuances of every individual market are so different, that building one kind of monolithic piece of piece of software, it’s so hard, and that’s where localization really comes into play, where knowledge is super important. Yeah.

Susanne Møllegaard 8:55
Yeah, you’re very right about that. Michael, I totally agree on that. I think that when you go abroad countries, then I see a lot of system vendor actually, under estimating the need for localization and the cost of the localizer. And that makes for instance, implementing interpretation projects very, very expensive, because they miss understanding there. But for instance, travel insurance, which is very similar in some countries, then you will be able to move across borders, with less friction. But if you take the usual insurances like home, insurance, car insurance, every market is different. That’s how I experienced we can see if you take the countries that have huge differences between how you do localization between Denmark, Norway, Sweden, and it’s very important that you have local market specialists that understand the processes, the systems, the third party inspections, and so forth. And that’s actually where we impresses factory try to help them insure us whether they are local insurance or they have insurance that wants to answer the Danish market, that we can actually come with a local market knowledge and also offer an integration platform software service that makes it easier to actually infer the market and focus on in consumer benefits.

Michael Waitze 10:28
Can you talk about in a little bit more detail this second trend that you mentioned this concept of open insurance, just kind of what its status is in the markets in which you operate? Where you think it’s going? And really would like what you think the impact is going to be on the insurance market for this idea of open insurance? Yeah.

Susanne Møllegaard 10:47
Yeah. But I think is actually that if you take my home turf, Denmark, then you can see that the insurance industry is actually taking on responsibility regarding open insurance. They’re developing industry specific systems. For instance, if you want an injection, you can actually ask me as your new customer, to give access to all my information about my pension across all pension companies in Denmark, right. On top of that, we see that the companies offering pension, they can actually develop what they offer me as a customer, like I’ve put a lot of extra value to what they offer me. And that’s actually what I think is important. I believe that open insurance will help assist innovation in the industry, and more focused on what type of extra value that the insurance insurers want to offer to their consumers.

Michael Waitze 11:56
Do you think the underwriting process changes at all because of this? Or do you think this is more service based? In other words, if we all have access to the same information, pricing should look relatively similar, depending on how you measure risk, right? But the services that can get built on top of it is that end up being the differentiator, you think,

Susanne Møllegaard 12:13
Yeah, but I’m not sure that the prices will be exactly the same cause each insurer will have their own experience, will you and me as a consumer, but I think actually the data for the underwriting will be more fine grained. So there will be it will be able to imply will be more correct, because you will be able to go to the source to get the data. But I still think that when at the end of the day, when the insurers calculate the price, they will not be exactly the same.

Michael Waitze 12:44
Yeah, I mean, again, it just depends on what your risk model looks like, among other things, but I mean, obviously, there are a ton of factors associated with it. But in general, how are you looking at this risk? What do you expect? What are your expected outcomes? And then how do you price that risk? Right, is really what it comes down to at some level?

Susanne Møllegaard 12:58
Yeah, exactly.

Michael Waitze 13:00
Do you think that this type of open insurance approach will lead to even more personalization? In other words, if I understand your cohort at scale, then I can make a product specifically for you? Because I feel like I can also make it specifically for a bunch of other people that seem like you, do you think that that’s gonna happen as well?

Susanne Møllegaard 13:21
Yeah, I think that’s both one of the big benefits of open insurance, but of course, also a risk for the consumer, because it’s positive if you can get paid, you can feel that you will recognize that you need to put in less data to get a good, good proposal. But on the other hand, if you have had a lot of claims, and you are not a very attractive consumer, then you might end up at risk of being a very expensive insurance. Best case. So that’s actually one of the topics that the industry at such discuss in Denmark, for instance. And also, of course, in the EU concept, because insurance is a collective, it’s, we help each other right. And it’s not very good if we ended up excluding some groups of possible consumers.

Michael Waitze 14:19
Right. I mean, the reason for the question is to is to sort of reiterate the point, that insurance itself is a collective endeavor, right? Yes. In other words, it’s good if nothing bad happens to me if something bad happens to you, because then I help fund what’s what the bad thing is, it’s happening to you and at scale. Most people won’t have bad things happen to them. But if they are protected in the group that’s large enough, well, then they’re insured, right? I mean, not to put too fine a point on it, but that’s the way it’s meant to work. So where do you fit personalization into that? There’s got to be some connectivity right between the personalized service and product that I get, and the overall risk that the insurance companies are underwriting because that’s the only way it remains collective at some level No,

Susanne Møllegaard 15:02
that’s true. That’s true. For instance, take motor insurance. If you take, for instance, motor insurance, and you get more data about how I drive, you will also be able to support me helped me become a better driver, you will help me, for instance, will, if I’m a driver that travels a lot abroad, you know, you can see, you can, you can sort of personalize the add ons that you want to supply to me, because you know, my pattern of driving the pattern of claims I’ve had, and so forth, actually one of the big things also in relation to insurances claims prevention. Because if I get a lot of the same type of claims, maybe the insurance will be better able to help me prevent the claims in the future, given that they have a better data set forward.

Michael Waitze 16:00
Got it. So using it in reverse as well, for preventive reasons. That’s interesting, right? In other words, you know, all the stuff I’m doing wrong, helped me out both sides, right, because it helps you out a little bit as an insurer, because you have to make fewer payments. But by definition, if something bad is happening to me, I probably don’t want that to happen either. So fair enough. And if you have all the data, that would be super helpful, right? It’s not just a one way street. I like ask this right, because, like, I can make it through line for the stuff that I love to do. And I’m curious, like, you’ve been at this for a while now. Right? Do you remember like, what got you interested at the beginning in being in this industry? And then just what keeps you there on a day to day basis? What is the thing that that keeps you so so interested

Susanne Møllegaard 16:44
today? In insurance? Or? Yeah, yeah,

Michael Waitze 16:47
both? Both? Because you’re involved in a bunch of different ways, right?

Susanne Møllegaard 16:51
Yeah, exactly. It’s actually I’m actually my education is actually mastering business economy. So I started. And then actually, it was coincidence that I ended up in the insurance industry. So it’s not like that I you know, I’ve always wanted to be in the insurance industry, it was coincidence. But I somehow got really interested in because insurance is people helping people it everywhere you experience how you know, the customers, the end consumers, or people, the people helping them or people, everything is about, it’s a service somehow. And that that’s, I find this very, I like working with that. I also started on a bit technical side, because when I started in the industry, I was actually doing analysis with what was called SAS, which was, you know, an analysis tool that was used a lot in the insurance industry. And I made all kinds of extractions of data describing how is the business doing and so forth. And then I ended up in the, in actually being part of the business organization, but I brought this interest for the technical side with me. And I always been driven by the curiosity of what St can do for business processes. And you can say, well, let’s stop. But I remember that in Denmark when we started talk, and when I first heard about it, it was back in 83. It sounds like a long time ago. And I was in ninth grade in public school. And they offered programming as an extra curricular activity. And I volunteer for that. And we were very small group four or five students thinking this will be interesting. Yeah. And I was sitting there in the afternoon trying to understand what is programming? And if then else and whatever. And somehow that Curiosity has, I don’t know, if it’s some kind of creativity, it triggers in me, how can we make things better? Because I really would like to improve things everywhere.

Michael Waitze 19:08
I will say that it was not long after you had that experience. What did you say? 1983? Is that what you said? A long time? Well, let’s just say let’s just say I was well past ninth grade in 1983. But it wasn’t long after that, where I realized and the reason why I like asking you this right is because I think we lived in a really interesting time as well. I saw the impact that technology could have I when I worked at the computer center at my school, which didn’t have one before I got there, and just saw what it did to productivity, particularly for my own writing, but also in the math, spreadsheet thing and in the paper writing that the other students did and I was like, this is the future. I remember it specifically it I remember thinking it and when I also remember seeing a guy walking around with a Macintosh that he was carrying. And now I just saw that I swear that I’d seen the future but no also impacted everything that I did at work. So it’s not just a casual conversation for me, because when I finally got to Morgan Stanley, and I didn’t have a computer on my desk, I said to my boss, I need one of the things in the computer room on my desk, and I’ll show you why I’ll be 15,000 times more productive. And that was the beginning of a career doing what you did. How do I make a business a tech enabled business? And then how do I make that business more profitable, more fun? And that’s why I ask you, because that’s what kept me going for so long. Because it was so necessary where I was, go ahead

Susanne Møllegaard 20:32
and follow you totally and let my book because it’s difficult to understand exactly. Why why did you feel that? Why you see it? And why Why were you intrigued by it? But But I also see that you can do a lot of bad things with technology, of course, but in the end, what what is the motivator is how can you use it actually to make other people able to do what they do even better?

Michael Waitze 21:03
Yeah. Do you? Do you feel like the the way you can access technology today has caught up maybe to the vision that you’ve had for how easy technology should be able to use? Do you know what I mean? Like back in 1983. If I look even just like a word processor, there was a lot of stuff you had to do was still better than on a typewriter. But I had this vision of like, can we just like do this thing. And the other thing, and obviously technology caught up to where I can literally have my own media company, because the cost of everything came down. And the way all that stuff connected, match the vision that I had 25 years ago. So it must be the same for you at some level in the insurance industry. Yeah.

Susanne Møllegaard 21:43
Yeah, but that’s true. And, of course, visions develop. So it’s always like, and you’ll see new land that you want to conquer. But but if we go back in that space, then we are probably even past what we could imagine at that point. Because we develop our conception all the time. Also, I think what what we might not have understood back then is also the risk of where we are today. Because today we talk a lot about about security gdPI cyber risk, also the risk of being, you know, people can use the data in a bad way. I think I didn’t, I didn’t see that. I saw that nirvana. Well, now, I understand that you have to sort of make sure that things are also regulated in some way that that you will take care of the data, right? Because the data is they have great influence on people’s lives, how they are used,

Michael Waitze 22:51
how would you characterize the conversations you have with the corporate leadership and the company leadership with whom you interact at home? On their view, and their understanding of the technology risks, the cyber risks that you were just mentioning? Or do you have to do some kind of convincing with them as well, like, you know, just as actually a bigger threat than you think it is? Or most people just in line and they get it today?

Susanne Møllegaard 23:18
Yeah, I think now, we have had really bad stories about companies being attacked, data being misused in some ways. And also, eu is very aggressive on the agenda. And I see, for instance, sort of the third party, the chapter in the GDPR, is something that is spoiling the insurance a lot. And it’s sort of contradiction, airy, because at the same time, they are go to the cloud, with American vendors and so forth. And at the same time, there’s a big risk there that everybody is really afraid of, but also relying on EU to get some agreements with the American other countries. Leadership,

Michael Waitze 24:09
I was gonna say, What’s the big concern there, that if the data is stored outside of your own country, that you’ll lose access to that data due to some political or geopolitical reason and that the data should reside inside? Like, what’s the biggest concern here?

Susanne Møllegaard 24:24
No, it’s actually that NCAA, for instance, can get access that if we have a Danish citizen, and they have the possibility to get that data, and the insurance can say no, yeah,

Michael Waitze 24:38
okay. It’s a certain amount of stuff. But of course,

Susanne Møllegaard 24:40
also the cyber risk is also important, but specifically here it’s is the possibility that other states can get access to citizens data.

Michael Waitze 24:52
Got it, okay. And that’s important, right? Because you lose some of your sovereign control if you don’t have access over your own citizens data. So fair enough. again in your role, right? If there was one thing you could change about the interaction that you have with some, you know, just trying to get people to understand where the technology is going, what would that one thing be that you could change?

Susanne Møllegaard 25:14
I think that the trust in opening up, and that if you open up and if you could collaborate on the parts of your business that is not essential for getting a new customer or the competition, if you trust that, that will actually bring you to a better place. Because that opens up for a vast, vast possibility of new business opportunities. That’s actually the thing. Please relax, trust. We opening up will be bring you to a better place.

Michael Waitze 25:54
That is the perfect way to end Suzanne Bellegarde, a partner in the CEO of the process factory. That was really super, thank you so much for doing that today.

Susanne Møllegaard 26:03
And thank you, Michael. It has been a pleasure.

Episode 266