“The key to success is a good team that pushes innovation, combined with the right partners to execute new ideas.”-Not Your Average Insurance Interview: Ludwig Mertes, Board Member of ACREDIA

Could you tell us a little about yourself and what you do?

I am Ludwig Mertes and board member of ACREDIA, Austria’s leading credit insurer. We provide our customers cover against loss of receivables and support their credit control. We have more than 30 years of experience in monitoring companies worldwide and successfully protect our customers from the possibility of non-payment and bad debt. Before I was called to Austria in 2006, I worked in different management positions for ACREDIA’s parent company Euler Hermes in Germany and Switzerland.

Are you working on anything interesting at the moment?

Protecting business from commercial risks is very interesting at all times. We cover companies from all sectors of industry and different sizes. Credit insurance is of high importance from the macro-economic point of view, because we can prevent subsequent insolvencies due to non-payment.

An intriguing insight: at normal times, if GDP is negative, there is a high number of insolvencies. When the economy is growing, insolvencies are respectively lower. However, at the moment we have an economic slowdown and very low insolvency levels due to different measures by the state. It is very interesting to see, how the insolvency situation will develop, when the government support expires. We are closely monitoring this development.

Who are your customers and what types of services and products can they expect from you?

ACREDIA has a wide range of customers. Typically, our customers deliver on open account in Austria and internationally. We provide online insurance for small companies as well as individual solutions for big enterprises. Using the product finder, which was developed with the help of KASKO, each company can easily find out the right product for its needs.

We help our customers to navigate their risk management through good and difficult times. As a matter of fact, many of our customers have been trusting us for more than twenty years!

There’s a lot being written about the state of the industry; sometimes it’s difficult to know where to find accurate, insightful discourse. Which three blogs and/or news sources do you usually read? And if you could only recommend one, which would it be?

I use a wide range of news channels to be able to get to know different perspectives.

This is the same as in credit analysis. We cannot rely on one source only to judge companies, but we apply different sources, such as financial statements, banking information, industry reports, payment experiences, personal interviews and so on. We rely on the worldwide Euler Hermes network and Euler Hermes relies on ACREDIA for the Austrian market and the South East of Europe.

If I have to recommend just one channel, I would of course go for the ACREDIA news on LinkedIn. ;-) Prospective clients and our customers will find really useful information there.

In your time at ACREDIA, which product or distribution changes have you seen have the most significant impact so far?

Historically credit insurance has always been very close to the customer. One of the reasons for ACREDIA’s leading role in Austrian credit insurance is the service and onsite consulting that we provide for our customers.

But we have now seen a shift, especially for small and medium sized companies. Quick and reliable cover via digital channels are more and more requested.

Where would you identify future problems that insurance companies might face with proceeding digitalization?

Credit insurance is still predominately a manual product. There has been some digitalization in the areas of risk analysis and underwriting but sales, contract management and claims handling have seen only little progress. That’s why I am especially happy and proud that we created the product finder together with KASKO. I consider it a new launch pad for further innovation in credit insurance.

Innovation is inarguably crucial right now. Do you have any secrets for innovation-success?

You have to have an open mindset and be bold and let your staff members try new things. The key to success is a good team that pushes innovation combined with the right partners to execute new ideas. Don’t be afraid of failure, it’s a chance to learn and improve.

With so many promising insurtechs offering interesting new approaches, are there any in the EU market that have impressed you as of late?

In credit insurance there is no insurtech active that I am aware of. We brought to market the first online credit insurance product a couple of years ago and somebody copied the idea, but I have seen no further progress anywhere else. The we.trade banking platform caught my attention, even though it cannot be considered an insurtech. Platforms and ecosystems seem promising and we have to be more innovative in that field.

One final question, where do you see the industry in five-years-time?

As mentioned above credit insurance is still quite a manual process so there is a lot of space for digital improvement and we will step in there. It is important to keep focusing on the customer. We need to offer new solutions to stay ahead but we also have to make sure we don’t abolish well established processes too quickly. In the next five years we will see more product diversification. We will soon see more modular online products as well as work flows that are entirely online from identifying the right credit insurance to automated claims handling.

Thanks for your time. Any other questions or statements that you would like to add?

Credit insurance is not as complex as people might think, but not that simple either. Our goal is to offer simple and innovative insurance products. ACREDIA has great expertise in credit insurance. As digitalization is developing fast, we need partners like KASKO by our side with an expertise to offer simple products and a good customer experience flow.