The insurance industry is seeing an increase in risk and competition due to quickly changing business settings. Additional obstacles are being created by a number of other issues, including fraud and theft. In order to improve pricing processes, better understand clients, prevent fraud, and assess risks, insurers are therefore looking for more effective ways to extract precise insights from data.
With artificial intelligence (AI) serving as a major enabler, the Vienna Insurance Group (VIG), a leader in the sector, is rethinking its operations to meet these difficulties.
VIG’s Historical Background
During the early 19th-century industrialization period, three businesses amalgamated to form VIG. The majority of structures at the period were made of wood, which raised the possibility of fire threats.
An Imperial Army commander established the first business in 1824 and proposed the notion of providing reimbursement guarantees in the event of fire-related loss or damage. Among the two other businesses were Austria’s first municipal pension organization and its first life insurance company.
They served as the foundation for VIG, the biggest insurance company in the area.
Diversity Makes Achievement Possible
“For two centuries, we have operated in a highly diverse region,” stated Carsten Dehner, VIG’s Chief Data & Analytics Officer. We have a lot of local power because of that. We are familiar with the nuances of conducting business in each of the nations in which we do business. Following the breakdown of the Iron Curtain in 1989, we were the first to move eastward.
Speaking in Frankfurt, Germany, at the SAP and SAP Fioneer Financial Services Forum Europe, Dehner emphasized his conviction that diversity is a critical success factor, particularly during challenging times. Along with a focus on local entrepreneurship, decentralized structures, and a high degree of autonomy for the insurance firms within the group, it is one of VIG’s key values.
In reference to the organization’s sustainability plan, Dehner clarified, “We are enablers and accelerators.” Among VIG’s pledges are the prohibition of new coal investments, the elimination of all current coal investments by 2035, and the prohibition of investments in any business that manufactures or deals in prohibited weapons, including cluster bombs, nuclear weapons, biological and chemical weapons, and anti-personnel mines.
Affordable, eco-friendly housing and a rise in green bond investments are among the company’s targeted investments.
Technology Speeds Up Success
“The disruption of the future has already arrived. “We call it AI,” Dehner stated. “We must develop the appropriate business models in order to make the appropriate steering decisions because everything will be increasingly data driven.”
All areas of insurance have seen improvements in speed, accuracy, and efficiency as a result of the digital transformation of insurance companies. For instance, generative AI greatly speeds up insurers’ digitization. It can help businesses like VIG with risk assessment, fraud detection, and application process human error reduction. Through automation, claims optimization, and the creation of successful client interaction initiatives, artificial intelligence is transforming the insurance sector.
In Central and Eastern Europe, VIG’s long-term business plan is to provide customized goods and services that cater to the unique requirements of clients in disparate markets. Dehner claims that merely examining the varied supervisory standards necessitates the integration of highly disparate data systems.
He clarified that having the appropriate IT infrastructure to support changing business models and combining general data with all the data produced in various markets is quite difficult. “The big challenge is connecting all that to flexible services,” he stated.
To handle the growing changes and complexity in the business, the firm uses SAP Finance and Controlling Accelerator software, the SAP General Ledger application, and the SAP S/4HANA for financial goods subledger solution.
These tools give the business the procedures and mechanisms it needs to adhere to rules. For instance, the subledger is a group of intermediary accounts connected to the general ledger, whereas the general ledger is the collection of master accounts where transactions are documented. The business can manage the complexity and necessary data parameters while still adhering to the standard thanks to a thorough product subledger.
According to Dehner, “granular, accurate, and timely finance data is essential for high-performing finance.” These tools allow us to have clean data as our only source of truth, in addition to allowing us to stay up to date. They essentially give us control by simplifying the architecture. We can adopt new business models and adhere to rules since we have a single hub that connects our operational and financial data.
What sets VIG apart from its rivals in the market and will maintain its leading position for many years to come is its forward-thinking approach to technology, dedication to sustainability, and long history of diversity.