Krisztian Kurtisz, Head of Alternative Digital Business Models and CEO of Cherrisk at UNIQA Insurance
We have long equated ground-breaking innovation with the entrepreneurs and startups of Silicon Valley. Corporations are now staking a claim to be disruptive innovators. Driving this wave of corporate innovation is the Corporate Explorer: leaders who pursue exploratory business ventures beyond a firm’s core.
This is the first in a series of articles featuring Corporate Explorers to Watch in 2021. Corporate Explorers are managers creating businesses outside established corporate rules, using the assets of the firm to beat startups to disruptive growth opportunities. They are willing to stand-out from the crowd, act with independence, and break the firm’s taboos to commercialize disruptive ideas. They are purpose-driven individuals on a mission to transform the status quo.
Corporate Explorer to Watch: Krisztian Kurtisz
Role: Head of Alternative Digital Business Models and CEO of Cherrisk
In 2018, two-hundred-year-old Austrian insurance company UNIQA launched Cherrisk in Hungary, turning the established insurance industry on its head. Cherrisk is a low-cost, people-centric, and lean insurance offering sold on the basis of a monthly digital subscription. Its default is to approve all claims first, ask questions later.
Cherrisk is now scaling across Germany and poised to disrupt insurance from a traditionally burdensome and bureaucratic offering to a streamlined one that is designed to delight customers and serve the community. It is the “Spotify of Insurance,” giving consumers control over their insurance products.
The Corporate Explorer behind Cherrisk is Krisztian Kurtisz. Three things led this industry disruptor to innovate from within his firm and do so successfully: Strategic Ambition, Outside-In Innovation, and Autonomy.
After two decades in the industry, Kurtisz wanted to take insurance back to its origins. The first modern insurance company grew out of the Great Fire of London in 1666, when a group of homeowners got together to protect their newly rebuilt brick homes. Over the decades, the connection to the community had weakened, with the industry’s focus switching to selling policies, administering them, and preventing losses.
Kurtisz wanted to reconnect the industry with its roots and find a way for a modern insurance business to embed the values of the risk sharing community, and to do so at an accessible cost. UNIQA faces the same threat of digital disruption as any insurance company. Be it from Insurtech startups or large platform companies like Google and Amazon, it will come.
Kurtisz drew inspiration directly from digital natives, specifically Spotify, the music streaming service. He asked himself: what would Spotify do if they offered insurance? He knew that customers found insurance products complicated and expensive. From analyzing UNIQA’s customer data, he also saw that many of his best customers did not make claims. They found the experience time consuming and frustrating. This stopped them from buying insurance unless they absolutely needed to. Kurtisz responded to these pain-points and aimed to create a product that would reverse these negative impressions. He reasoned that, if he did this, he could expand the market for insurance and convert people who do not buy insurance into people who would, a potentially lucrative opportunity.
Out of this insight, his new service, Cherrisk, was born. Cherrisk is a user-friendly and low-cost line of insurance products that, like Spotify, is available on the basis of a monthly subscription. Cherrisk assumes its customers are acting in good faith. It is not that Cherrisk turns a blind eye to theft; it simply assumes that customers are honest and, in a reversal of industry norms, uses advanced digital technology to spot fraudulent claims retrospectively and minimize human interaction, which makes up 80% of the source of the fraudulent cases.
However, this alone would not realize Kurtisz’s ambition to reinvent insurance. He wanted Cherrisk to be a genuine community that benefited its members by allowing them to divert profits to charities and good causes, not just to pay for sales commissions, administrative costs, and shareholder dividends. So, he created a telematic based mobile application called CHERRISK GO, by which customers can earn digital points or “Cherries” based on their activities, such as not using their mobile phone while driving or adopting a new exercise regime. Customers can convert earned Cherries into either a discount on insurance premiums, the purchase of “goodies” from Cherrisk store partners, or donations to charities of their choosing. This connects the profits of Cherrisk back to the community that generates them, just as the original risk-sharing communities intended in 1666.
Kurtisz won the backing of UNIQA CEO Andreas Brandstetter (video below) and Wolfgang Kindl, who is responsible for International markets. Cherrisk was a commercial opportunity in its own right and gave the firm an entry point into the world of digital insurance. UNIQA was willing to pursue a dual, or ambidextrous, strategy of leading in the existing core business and becoming a disruptor in a new arena.
Cherrisk had a head start over startups by already having a license to issue insurance policies. It also had UNIQA’s brand and resources to back it up. Even so, the Cherrisk team was separate from that of the parent and had its own floor in the UNIQA building in Budapest. Cherrisk staff were hired separately and had their own IT and HR resources, and the new venture adopted its own “fast-fail” product development methodology. It was still a part of UNIQA, but also a separate entity.
Three years on, it is still relatively early to say if Cherrisk will succeed—but as 2021 shifts into high gear, Cherrisk is poised for success. At present, they have over 150,000 users in Hungary and are scaling and growing rapidly in Germany. There are also distributing thousands of Euros to charities. UNIQA has a digital startup, giving it the chance to lead their industry into the future. Most of all, Kurtisz is proving that Corporate Explorers can lead disruptive innovation within an established firm.