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Helvetia Innovation Lab combines research and practice

Helvetia and the University of St. Gallen jointly founded the Helvetia Innovation Lab in May 2017. Its purpose is to conduct research into new business models and ecosystems in the insurance industry. Dr Bernhard Lingens, head of the laboratory, explains in an interview why ecosystems will change the way companies function.

18 February 2018, Author: Fabian Weidmann, Photo: Natascha Fabian

A man is sitting on a green sofa.
Bernhard Lingens believes that Helvetia’s customers benefit from a strong, trustworthy eco-system and partner network

Bernhard Lingens, what are the goals of the joint innovation laboratory founded by the University of St. Gallen and Helvetia?

Helvetia wants to establish a so-called “home” ecosystem. We are supporting Helvetia in this project both operationally and with our expertise. We provide the link with the University of St. Gallen and its students: 80 master’s students from the Business Model Innovation course are working on cases relating to the “home” ecosystem, generating plenty of fresh input. The research of our postgraduate students is also contributing.

What is an ecosystem?

There are different types of ecosystems. We are working with Helvetia on a so-called business ecosystem. This refers to cooperation between several companies that work together on a product, service or business model that they would not be able to manage alone. So what we are talking about is a network of partners. The idea is that the new service should be more than just the sum of the individual parts of each partner. It should generate added value for customers.

What does that mean in the context of Helvetia?

In the “home” ecosystem, the intention is not to think in terms of individual services but to broaden the scope. Helvetia would not only offer household contents insurance but work with partners to provide everything associated with homes: property searches, moves, insurance, sharing services, etc. In the ecosystem, a customer is offered support for all of their needs, throughout their journey. The customer gets everything from a single source, representing considerable added value for them.

To what extent do ecosystems change the way in which companies function?

Thoughts with respect to business activities change fundamentally: the goal of the ecosystem is to develop a better product than a company could achieve alone by pooling the skills and abilities of the various partners. If this is successful, the result is a huge advantage over competitors. Moreover, companies can advance into areas in which they were not previously active and do business there.

Does that mean that in a few years it might be possible that companies like Google and Amazon will be selling insurance?

According to the ecosystem concept, these companies do not need to sell insurance as individual players, as their core competency does not lie in the insurance market. Investments are needed if a company is to be competitive in new areas. It has to acquire knowledge and skills that it did not previously possess. However, a partnership with an insurer in an ecosystem could make a lot of sense – if this generated added value for the customer. Generally, if you think in terms of ecosystems, you stop thinking in terms of business lines. There is no such thing as a pure and simple insurer, search platform or tech company. Digitisation is making industry boundaries increasingly fluid.

Other companies are also working in ecosystems. Is that the future of our sector?

There will probably always be services offered by an individual company. Margins play a key role here: if a product has a small margin, it is difficult to involve partners and establish an ecosystem, as there is not enough money to be earned. That is a natural barrier to the ecosystem. Transaction costs are another barrier: if they are too high between partners, the development of an ecosystem is likewise not worthwhile. However, it is true that many other companies are also establishing ecosystems, generating added value and new jobs, and learning constantly. It is a big trend in both practice and research.

Helvetia wants to become simpler for its customers. Will it achieve that with the establishment of the “home” ecosystem?

Yes, on all accounts. To date, customers have had to procure services from different companies in connection with homes. Now, thanks to the clever, cross-sector cooperation of partners, for example through a joint IT platform, they can get everything “from a single source” in a smooth and convenient process. In the home area in particular, where decisions are often made for the long term, customers benefit from a strong, trustworthy ecosystem or network of partners.

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