“Think big, start small, scale fast”

ERGO has been running a successful innovation scouting programme for several years and has gained extensive experience in collaborating with start-ups and scale-ups. Our colleague Hanbing Ma, Head of Innovation & Digital Transformation, explains in an interview with the magazine changement which criteria are important when selecting start-ups, how ERGO promotes a digital culture within the company – and what is particularly essential for the success of innovations.

The insurance industry is traditionally regarded as rather conservative. How do you manage to embed genuine digital innovations at ERGO without jeopardising the stability of the core business?

Stability is a key concept: as an insurer, we make a significant contribution to social, individual and economic stability. We are there when something happens, offering protection for everything that really matters in life. Our systems and processes are therefore geared towards stability and efficiency.

But one thing is also clear: in order to fulfil our mission, we must be economically strong ourselves and work consistently on our resilience and competitiveness. Especially in these volatile times, when external shocks are increasingly becoming the norm and technological upheavals are occurring in ever shorter cycles.

A diversified portfolio of digital innovations is an integral part of this. On the one hand, the numerous innovative digitalisation projects make a significant contribution to our core business. They enable us to offer our customers simple, intuitive solutions, relieve our employees of routine tasks and peak workloads, and achieve greater efficiency, effectiveness and better growth opportunities as a company. On the other hand, we test digital innovations in order to discover new business potential in the long term.

With over 90 start-up partnerships, innovation scouting is particularly active at ERGO. What criteria do you use to decide whether a start-up is a good fit for ERGO?

At ERGO, we established our own innovation scouting unit back in 2016, which continuously scans the German and international markets for the latest digital solutions, with a view to making them available to the Group if they are assessed positively. This gives us, as an insurer, access to new technologies and innovative solutions, whilst allowing us to focus on our core competencies such as excellence in underwriting, risk management, new market strategies and so on.

In the nearly ten years of innovation scouting, we have gained a great deal of experience in collaborating with start-ups and scale-ups and have established a set of selection criteria that help us and the companies assess whether we are a good fit. This starts, for example, with the question of whether a technological solution already has the level of maturity we require as a group. Whether it can be scaled. Whether it meets our high governance requirements.

And, of course, whether the teams are a good fit, because the human factor is just as important as the technology.

And how do you ensure that these collaborations really make an impact?

When it comes to digital innovations, we follow the “Think Big, Start Small, Scale Fast” approach to ensure that the collaborations deliver real added value. “Think Big” is about ensuring that innovative ideas address a real business challenge and meet customer needs. With “Start Small”, prototypes and pilot projects for innovative solutions are first developed, tested and validated iteratively with our specialist departments to demonstrate concrete business benefits. If this is the case, the final step, “Scale Fast”, involves providing the right resources and taking calculable risks to quickly achieve the desired volume and quality. In other words: to fulfil the business case.

“Conversational AI” enables natural, human-like conversations. What role does this technology currently play at ERGO – and what is your vision for its future use in customer dialogue?

The fact that generative artificial intelligence (GenAI) is capable of understanding and generating human language will significantly accelerate the development of the insurance industry. Used correctly, GenAI-supported tools will lead to further optimisation of business processes, improved customer experiences, higher productivity and new services.

The field of ‘Conversational AI’ already plays an essential role for ERGO today. For instance, our phonebots in our German customer service centre already handle over 15,000 customer calls daily, forwarding them to the appropriate department depending on the issue or processing them independently from start to finish.

Our aim is to use this technology to make insurance as simple as possible. True to our motto: “Simple, because it matters.”

Can AI really promote “customer proximity” in the digital age – or do you think there will always be limits to interaction with customers, which is why people will remain important in the future when it comes to customer relationships?

Our Chief Digital Officer, Mark Klein, always says, “AI makes work more human,” and he’s right. Because AI can relieve employees of repetitive tasks, thereby giving them more freedom to focus on what really matters: our customers. Even though initial research into insurance is increasingly done online, personal advice usually follows this initial phase, particularly for long-term or advice-intensive products. Customers want someone who sees them as human beings, understands their circumstances, and advises them individually and empathetically. Or who stands by them when an emergency arises. People will therefore remain important in the insurance context, because insurance is and always will be a “people business”.

Digital transformation is changing not only processes, but also corporate culture …

That’s right; a digital transformation is always a cultural transformation as well. Because even the best technology has no impact if it is not adopted and used by employees. This applies not only to AI, but to all new technologies. At ERGO, we are therefore taking action on several fronts to successfully embed and further develop our digital culture.

Can you give some examples? And what are you doing to actively involve employees in this change?

In addition to a clearly defined digital strategy, we have had a procedural agreement on digital topics and projects with our employee representative bodies for years. In particular, we have agreed on a dialogue format designed to foster transparency and a shared understanding of the content and implications of digital transformation.

We also enable our colleagues to experience and use new technologies for themselves through numerous initiatives. One example from the field of AI is our internal “ERGO GPT” model. We made this available to all ERGO employees in Germany in May 2024 and supported it with numerous training initiatives. As part of the associated “adoption management”, we have, for instance, set up an influencer programme, offered an “ERGO GPT Lounge”, organised roadshows, launched a prompt library, held a prompting competition and much more. Engagement and participation are key elements of a vibrant digital culture for us.

We also engage colleagues on other digitalisation topics such as the metaverse, robotics, voice technologies and the like through all available channels, both in person and via images, text and audio. For example, through (online) workshops and training courses, theme days, presentations or articles in our corporate magazines. Since 2017, we have also been regularly organising the “digital.morning” at various ERGO locations in Germany with our Chief Digital Officer, Mark Klein. At this event, current digitalisation topics are discussed and successful use cases from the specialist departments are presented.

This always demonstrates particularly well that, with the right measures, colleagues do not merely become users of a technology. But also enthusiastic ambassadors for the applications, which they in turn bring into the company themselves. That is digital culture in action.

Can you already experience an “AI colleague” at ERGO?

Yes, for example in the form of our internal “ERGO GPT”. As an insurance sector, we are one of the most heavily regulated industries in Germany. We are therefore only able to use public tools to a very limited extent and, following the launch of ChatGPT, developed our own secure and data protection-compliant version.

In principle, “ERGO GPT” is a general-purpose AI. This means it can assist with a wide range of text-based tasks, such as writing emails or summarising texts, developing concepts or helping with coding. “ERGO GPT” was launched in May 2024 and is already used daily by over 60 per cent of the workforce. Over 2 million prompts have already been entered into “ERGO GPT”.

Looking back on your time so far as “Head of Innovation & Digital Transformation”: what have you personally learnt and how might your own role have changed?

During my time as “Head of Innovation & Digital Transformation”, I have witnessed a significant shift from a push to a pull approach. Whereas we used to promote the use of technology amongst staff, colleagues now proactively approach us to express their needs, for instance in the areas of Robotic Process Automation, phonebots or AI.

It has also become increasingly clear that innovation is first and foremost a process, not a skill. It is like a team sport, where collaboration is of central importance. For innovation to succeed, it is essential to bring together different areas of expertise, such as domain expertise, IT, user experience, data protection and legal matters. Colleagues must also be supported with the necessary capacity, resources, and innovation and governance processes.

And: digital transformation is a marathon, not a sprint. It is crucial to stay on the ball continuously, to learn from the highs and lows, to celebrate both major and minor successes, and to constantly inspire, empower and engage colleagues. Because every individual contribution is important for change. To achieve this, however, colleagues must see and experience the added value that digital innovations bring to them.