Legal insurer ARAG is increasingly reaping the benefits of its digital transformation. Corporate processes are becoming more efficient, customer service is improving and, thanks to data analytics, the company is able to innovate more quickly. However, says CFO Hans van Gool, the personal touch remains important.

ARAG CFO Hans van Gool had IT in his portfolio until the beginning of last year. But now digital transformation has become one of the legal insurer’s main strategic priorities, the management board of ARAG Netherlands has been expanded to include a Chief Technology Officer. ARAG was founded in Germany in 1935 and is now active worldwide. Founder Heinrich Fassbender’s business aim was simple: ‘every individual should be able to assert his or her rights, not just those who can afford it’. Today, that founding principle is more current than ever and is still displayed prominently on the company’s website. In the Netherlands, ARAG has for years set the pace when it comes to legal insurance with DAS and Achmea as its main competitors. Slow market growth, driven mainly by premium increases, has today led ARAG to focus on providing legal services as well. ARAG has more than 400 legal experts whose specialities include employment, housing, personal injury, social insurance and corporate law.

Why does ARAG want to transform into a Smart Insurer?

Hans van Gool: ‘Because we realised that our corporate processes, such as handling claims, are becoming more efficient through digitalisation. And by clever management of data, ARAG is well placed to improve its service to our customers and to develop new concepts and business models.’

How are you translating this ambition into practice?

‘We focus both on improving our daily operations and developing new business models. We’ve already witnessed new services coming on the market, which are taking the place of traditional forms of insurance. You can, for example, buy in specific services for a legal problem without having to take out insurance. Our product Flight Claim allows travellers to check online if they have a right to compensation from an airline if a flight is delayed or cancelled. This service is free to our customers and we charge others a fee. We are also setting up partnerships. Last year, for example, we launched the Legal Tech Studio with the start-up platform B. Amsterdam. This is a hub which allows entrepreneurs and start-ups to make the most of working together.’

Hans van Gool (1971) Finance chief, he studied for a master’s in economics and business admini-stration economics at Maastricht University and has an executive master’s in finance & control from the VU (Amsterdam). He began his career as a consultant at EY and held various (inter)national roles at Atradius. In 2006 he was appointed business controller at SNS Bank, later Head Finance & Control and then Director Finance & Control at SNS Property Finance and Propertize. In 2015 he moved to ARAG as CFO.

What innovations has this led to?

‘One good example is Appjection, a fast-growing legal tech start-up which helps consumers to appeal against traffic fines online and at speed. The people behind the start-up brought in the technical know-how and we provided our expertise in the market, the network and part of the budget. Of course, you need to generate enough online traffic as well as innovate to really get there, so we have been looking for more business partners for Appjection. LeasePlan and the company behind parking app Parkmobile have also signed up to participate. The great thing about a service like Appjection is that everyone can use it for free. Another ARAG portfolio start-up is Appeal. Appeal is working to claim back the illegal service fees that Dutch tenants have been paying to rental housing agencies and platforms.’

So how are you improving your business processes through digitalisation?

‘In many different ways! We have implemented a software system from Salesforce within our call centre, where we deal with customer phone calls, and within the legal aid department where our legal experts and lawyers work. The process works roughly like this: a customer makes a claim, we check if it is covered and if it is, the claim is transferred, if necessary, to a legal expert. If not, we offer the customer an alternative solution. We are also working on further improving our processes and systems to speed up the entire claim settlement process. In addition, we've used predictive modelling to develop the Voucher Check. This is a new online service which helps consumers find out what they can do about cancelled holidays and replacement vouchers. It is particularly relevant given the Covid-19 situation.’

'The personal touch

is and will remain crucial'

You work with distribution partners who also have customer data that could be useful to ARAG. Does digitalisation help with this?

‘Absolutely. After all, we are primarily a b2b company. The major part of our turnover comes from proxy brokers who sign up customers on our behalf and via handling claims at our own risk for third parties. Our partners used to be the only ones with access to customer data and if customers got in touch with us about a legal problem, we had to ask the relevant partner to find out if they were covered. That was a time-consuming process. Digitalisation has allowed us to reduce this considerably because we already have for the most part the relevant information about the customers in house. The customers benefit as well, because they know where they stand more quickly.’

Digitalising customer contact could put an end to customer-human interaction. Is this something you are aware of?

‘Of course. We do, of course, offer functions such as live chat and a chatbot which can answer questions 24/7, but most customers still prefer to talk to a person. They are looking for a listening ear, so personal contact is very important and our call centre will always be staffed by humans. Our motto is: digital if possible, personal if necessary. And the personal touch remains crucial if, for example, a customer has less coverage than they thought, and we would like to solve the issue as well as we can. We are currently testing a new service for legal support in which customers can opt for three levels of service. Customers who are happy to do a lot of the legwork themselves will pay less than those who want us to take care of the issue as much as possible.’

Would you like to use digital technologies, such as data analytics, to forecast the claims your customers are likely to make?

‘Our actuaries already do this, together with a number of data scientists who we have taken on over the past two years. They are developing models within specific parameters which should support forecasts about what an individual or a group of people is likely to claim. At the same time, you have to be careful with the results of such analyses, from a compliance perspective. Visualisation tooling will allow us to study the claim ratios per town or village, which might offer interesting business insights.’

'Digital if possible,

personal if necessary’

Could these developments eventually lead to dynamic pricing, depending on where the customer lives?

‘Technically yes, but you need to ask yourself how far you would like to go with implementing dynamic pricing and if such a move would be ethical. It has always been our belief that all citizens should be able to assert their legal rights – regardless of their financial situation. This belief still guides us today. We remain committed to providing equal opportunities, access to justice for all, and supporting people in legal matters. But if a specific customer is making structurally large claims, a different premium set-up would be called for, partly to keep it affordable. Data analytics can also give us insight into consumer behaviour that we can take into account in our marketing and product development. We are, for example, rationalising our range of services by taking a more modular approach, which is both easier and clearer for our distribution partners, customers and ourselves.’

How has data analytics allowed you to improve operations with regard to your business partners?

‘Improved analyses has allowed us to see which distribution partners and which products are profitable. If a distribution partner is lagging behind, we can ask our account managers to talk to them to find out where there is room for improvement. In this way, the digital transformation is giving us an increasing number of instruments to make improvements across a broad field.’



Legal insurance and legal services


701 fte

Finance department

26 fte

Premium income

€ 163.5 million (2019)

Underwriting result

€ 16.7 million (2019)