Digital Insure Launches a Major Innovation for Banks for the Distribution of Borrower Insurance.

Paris, November 6, 2018 – In its press release of October 3, 2018, the French Prudential Supervision and Resolution Authority (ACPR) announced that it had warned a credit institution for failing to comply with free-choice practices for borrower insurance contracts within its commercial practices. A first, which highlights the need for credit institutions to evolve their distribution tools to comply with both new regulatory constraints and customer expectations. Digital Insure, the insurtech specializing in online borrower insurance, provides a solution and today offers a major innovation for banking networks: a distribution platform that guides advisors towards the best available offer for the client, whether for setting up a loan or proposing a solution in the event of a request for substitution of the group contract. An innovation that combines customer knowledge, commercial performance, and compliance with regulatory requirements.

For now, it is only a warning, but the regulator’s position is clear: non-compliance with the rule exposes one to sanctions. On October 3, 2018, the ACPR warned a bank about its “commercial practices related to borrower insurance after an on-site inspection, for having applied higher rates or fees to clients wishing to opt for external insurance.” Beyond specific cases, the ACPR’s message appears to be to remind all professionals in the sector that it remains vigilant regarding borrower insurance.

A profound evolution of distribution rules for banks

Since 2010, the Lagarde and Hamon laws, followed by the Bourquin Amendment, have fostered competition in the field of borrower insurance. These reforms now allow each borrower to freely choose their loan insurance at the time of signing the loan (insurance delegation) or subsequently within 12 months of the initial signing or on each contract anniversary date (substitution and annual termination).

For banks, the applicable rules are clear: provided that the client’s request is formally admissible (registered letter, compliance with required documents, adherence to notice period) and substantively valid (the guarantees of the external insurance contract are equivalent to those of the bank’s contract), refusal of external insurance is prohibited. Furthermore, the bank has a strict 10-day period to reject the client’s request, beyond which any refusal will be impossible.

All these developments in the distribution practices for loans and borrower insurance contracts must now be reflected in banks’ tools and customer journeys.

Practices undergoing standardization among banks

For credit institutions, one of the first impacts was the implementation of guarantee equivalence control systems based on the framework of the Financial Services Consultative Council. Initiated in 2015 and generalized from 2016, the need to control the equivalence of external contract guarantees against the bank’s requirements led credit institutions to acquire comparison solutions. These databases, whether more or less automated, have not systematically been integrated into the information system responsible for the customer journey.

This was only a first step. Credit institutions must go further in evolving their processes to meet ACPR requirements and ensure a simple, efficient customer journey tailored to the client’s situation. Two options are available to them: adapting credit processes through internal developments or seeking rapid and operational external solutions.

A recent innovation from Digital Insure, Multinet® Emprunteur enables banks, with a single tool, to offer group or individual contracts, ensuring the compliance of the offer with the client’s profile and situation: new insurance delegation, substitution made during the first year or subsequent years. It is a unique and comprehensive borrower insurance distribution solution, simple to use, easy to integrate into the bank’s information system, and allows for monitoring and tracking all actions related to the file with a view to compliance and customer relationship quality.

The principle in three steps:

Step 1 – Depending on the client’s request (individual insurance application, renegotiation, termination), the advisor is automatically guided to the appropriate process that adheres to each required step.

Step 2 – The next step is to compare possible products and propose a ranking using multiple criteria selected by the bank. This is where rule engines and decision algorithms come into play: depending on the client’s profile (more or less sensitive), the advisor’s profile (more or less experienced), and any contract potentially brought for substitution by the client (equivalent or not to the bank’s requirements), the tools will trigger tailored proposals.

Step 3 – The proposals include: subscribing to or retaining the bank’s contract, granting a discount, opening the possibility of subscribing to an individual offer, then switching to the subscription tool up to electronic signature and transmission to the bank’s Credit departments.

All subscriptions and correspondence are created immediately, and for each automatically made decision, a request for derogation can be submitted to a manager, if necessary.

For the Bank, the advantages are numerous and can be summarized in five points: the contract recommendation policy is clarified, the monitoring of substitutions is ensured, compliance is guaranteed, requests for modifications to bank rules are controlled, and regulatory reporting is automated.

Built on the basis of configuration and rule engines, the tools are adaptable and can easily evolve if strategy, products, or regulatory constraints change.

Digital Insure, borrower expertise

Digital Insure has brought significant disruption to the French insurance market, particularly in provident and borrower insurance, since 2013. After 5 years of commercial success through its subsidiary BPSIs, a leading wholesale broker in digital borrower insurance, Digital Insure is now present in over 7,000 points of sale and recently launched its comprehensive digital platform for activity management, comparison, subscription, and management of borrower insurance contracts, intended for brokers and distribution networks, regardless of their level of expertise.

On the banking side, Digital Insure’s Multinet® Emprunteur solution has been integrated into the Credit processes of a major French bank since autumn 2018 and is central to the bank’s borrower portfolio defense strategy.

A word from the founders

“We work across the entire borrower insurance value chain,” explains Jean Orgonasi, founder of Digital Insure. “We quickly understood that banks lack the tools to orchestrate their distribution of borrower insurance contracts.” “Credit processes

Multinet® Emprunteur, the innovative distribution solution for credit institutions

today must ensure both economic performance and customer satisfaction, and offer processes that suit the regulator: this is Digital Insure’s expertise, and it is what we offer with this new tool. Our objective is to regularly propose innovations to all stakeholders in borrower insurance distribution, both brokers and credit institutions,” adds Fabrice Couturier, founder of Digital Insure.

About Digital Insure

The teams of the 100% French Insurtech Digital Insure have brought major disruption to the French insurance market, in provident insurance and more particularly in borrower insurance, since 2013.

A major player in borrower insurance in B2B and B2B2C, Digital Insure, through its subsidiaries Digital Insure Distribution, Multinet Services, and BPSIs, operates across the entire value chain: from assisting with client needs detection to claims management, including the development of digital journeys for comparing, underwriting, and managing contracts.

Thanks to natively 100% digital solutions, Digital Insure’s journeys allow distributors’ clients to subscribe to the most complex provident insurance contracts with complete simplicity, quickly, including in delicate personal situations with medical selection, and while optimizing their budget.

The company and its subsidiaries are located in the 17th arrondissement of Paris and in Caen, Normandy. They currently have over 60 employees.