Read more inspirational cases in our magazine FINANCIALS IN TRANSITION
The ‘yin and yang of Aegon’s data strategy’ are getting the maximum value out of data and at the same time carefully respecting privacy, says to Folkert van der Ploeg, the company’s Chief Data Officer. But how can he ensure he gets the balance right?
Research shows people would rather visit the dentist than think about finances including their insurance. The average consumer, apparently, sees insurance and pensions, as boring, complicated and anything but urgent...which often leads to procrastination about getting them organised. ‘Many consumers are unwittingly under or over-insured,’ says Folkert van der Ploeg, Chief Data Officer at Aegon, who completely understands their dilemma. ‘And many people are not at all well prepared for their old age.’ There’s work to do at insurance companies such as Aegon, where this research came as a shock. The challenge is to stop people seeing the word ‘insurance’ as a synonym for dusty and boring. One idea is to make products more accessible and simple, letting customers do their own calculations with trendy digital planning tools. Another is to offer useful apps instead of dry ‘uniform pension overviews’ or traditional insurance policies with enough terms and conditions to make even an insomniac fall asleep.
Aegon’s experience is that digitalisation can offer solutions, while at the same time more and more clients expect a straightforward, digital service. Aegon also needs to handle customer data carefully and screen current and future customers properly – and here, too, computers can make the process faster through neural networks and algorithms that become ever better at recognising deviations in behavioural patterns.
What is the key point of your digital strategy?
Folkert van der Ploeg: ‘We see our data strategy as Yin and Yang, having an offensive and an defensive side. On the ‘defensive’ side, data handling is about dealing as carefully as possible with client data, managing data quality and privacy. In the ‘offensive’, we try to get as much value as possible from it with the help of data analysis and data science. The two sides need to fit together seamlessly – if they don’t, you are in trouble. I firmly believe that in the future it will be essential for insurers to deal with customer data in a responsible way because clients will only want to share this information with us if we are absolutely trustworthy. Client privacy should be the starting point for all of our innovation and data use.’
Folkert van der Ploeg (1980) studied economics before starting his career at Aegon. He first worked in various teams as a finance manager. In 2014, he moved over to the insurer’s marketing team to build new teams for analytics and pricing management. He has been Chief Data Officer of Aegon Netherlands since last year.
Do you see legislation such as the General Data Protection Regulation (GDPR) as an obstacle to your customer approach?
‘No, but it does require a lot of attention and a careful balancing act. Every innovation we make starts with the needs and expectations of the customer, and privacy is now a permanent part of these. But what if you comply with privacy legislation and customers are still concerned about what you are doing with their data? Then you still need to take a step back. I always consider three questions. What are you allowed to do? That’s the law. What can you do? That’s determined by technology. But the most important is: what do you actually want to do with all this data? We want to answer this ethical question together with our customers.’
How does this work in practice?
‘We explore all this, for example, using our cX centre, which is a development studio where we test new services, website, and app concepts with our customers. In addition to this co-creation process, we also tell customers how we want to use their data and find out their opinions. Recently, we asked what customers would think if we shared their data with intermediary third parties, which are an important distribution channel for us. If they don’t want us to do this, we don’t. We see that customers value the fact that we are transparent about this, because above all we want to guarantee that they can trust us.’
‘Actually, our app has become the bank.
Digital is our new normal’
Can you give an example of an innovation that was co-created with your customers?
‘One good example is FinSnap, our online financial planning tool. You can use it to easily retrieve data from places like the tax office, social security department or pension register. Then, on the basis of their own data, customers can calculate various scenarios and receive answers to specific financial questions within ten minutes. For example, they could look at their financial situation and whether they can retire early, and then we can help them make financial choices. We are currently only offering this service through employers and our intermediaries, with the goal of making it easier to get financial advice. Customers can share their data and insights with an advisor to get specific recommendations and possibly take some actions. The tool currently focuses mainly on customer questions around pensions but we want to expand it to more topics. Right now, we have about 50 advisors and 35 employers using FinSnap and in the long term we’d like to offer this tool directly to consumers. But always with the proviso that they can share their situation with an advisor at the touch of a switch and get specific financial advice.’
How will you know if Aegon’s data-driven approach is successful?
‘Good question. The numbers tell the tale. Our Analytics & Data Science department works with a number of KPIs. First, we have a Net Promotor Score which can be increased by better understanding and improving our customer processes using data analysis. We have other KPIs involving improving product margins and reducing costs. Recently, we have also included ‘risk’ as a KPI, which involves looking at how we can use data analysis to improve our legal and regulatory compliance. By making our risks more transparent, we believe we can manage them better.’
How do you ensure that Aegon employees think and act in a data-driven way?
‘We believe in sharing knowledge, including knowledge about digital transformation. For example, we hire students to study at our own ‘Analytical Academy’ – a three-year programme that trains employees around the world to become all-round data analysts through lessons from experienced colleagues. Last year, ‘C-level’ executives had a brush-up too, with a two-day ‘Analytics for Leaders’ programme where our own data analysts trained them in what they needed to know to lead a data-driven business.’
‘We’ve been a data company for 120 years so customers trust that we are
careful with their data’
Do you want to digitise all customer contacts, for example using chatbots?
‘No. Of course, you can increasingly handle simple questions and transactions using computers, and that is what we do. We also have digital services such as financial planning tools and robo-advisers. By automating standard processes, our front office staff now have more time to talk to customers about complex cases or major damage. The trick is to combine our digital capabilities with professional advice so we can be much more relevant to our customers. I think that at crunch times, customers still want to talk to a person with empathy and expertise – for example if they are going through a divorce, their house has burned down or they have had a serious car accident. I really believe in this combination. Certainly, since the corona crisis, our customers have really appreciated getting a real-life employee on the phone even more.’
Do you get a lot of competition from fintechs and bigtechs offering insurance services?
‘This is starting to happen, although the threshold for entering the market is high because of the complex laws and regulations. I suspect that customers will be more likely to trust an insurer with their data privacy rather than some bigtechs like Facebook... although we believe in working together with the large platform-based companies. In China, we are working with Alipay, for instance, which has hundreds of millions of customers and a mountain of data. We offer relatively simple insurance products on its platform and by using data and an all-digital process, the acceptance process is lightning fast. We are starting to use these kinds of digital, data-driven innovations in ever more parts of Aegon worldwide.’
Sector: Insurance | Workforce: 23,750 | Active in: More than 25 countries | Net profit 2019: €28.2 billion
Read more inspirational cases in our special FINANCIALS IN TRANSITION
The CTO's of leading financials such as ING, ABN AMRO, Rabobank and AEGON give insights into their own, unique approach to digitalisation. And discover how BDO's integrated approach makes the most of the opportunities which digital transformation can bring.