EXCLUSIVE: ITC Asia and the Modern Consumer: From the Asia Pacific and Beyond

– Aniqah Majid, Fintech Finance

The Asian insurance industry is teeming with digital life, from blockchain-based claims processing to satellite verification software. The Asia-Pacific region is to observe the fastest growth in speciality insurance, projected to garner an annual growth rate of  $69.11 billion by 2028. The Indian life insurance market is also expected to grow at a CAGR of 10.1% by 2027, the increase attributed to the growing adoption of technology solutions. 

The global east has set a lucrative precedent for the insurance industry, confounded by their push in experimenting with data tools and policy personalisation. Last month’s Insurtech Connect Asia Virtual Summit saw industry leaders from sectors including commercial, L&H and reinsurance come together to discuss what makes this market particularly ripe for opportunity. 

With talks running from automation to online customer preferences dominating the event, COVID remained the omnipresent head of discussion.

“What short-circuited sales cycles was COVID, it wasn’t any particular technology, it was COVID that short-circuited that for the life insurance industry,” said Kalai Natarajan, the General Manager of Digital Solutions and Marketing at Dai-ichi Life Asia Pacific. In the panel discussion “How are Insurtechs and Digital Insurers Changing the Way Insurance is Done?” Natarajan enumerated how the remoteness of COVID unearthed changes in customer behaviour. These changes included the remote selling and delivery of enhanced underwriting solutions, bitesize or usage-based insurance, temporal to products like COVID cover, telemedicine and home-based services. 

On the topic of telemedicine, Tomas Holub, the CEO and Co-Founder of CoverGo, said “We work with MSIG, they use CoverGo for Health, and how we started was very fast. The proof of concept was very successful, and after that, we went through the full implementation within one month, basically cutting the whole sales cycle to less than two months. […] We started first with group health, because this was the key product to digitise with the launch for all the companies and SMEs, and the main pain point was the customer service.”

The pandemic and standardisation of remote products highlighted and emphasised the basic needs customers have always wanted from insurance, from regular consumers to commercial businesses. Swiss Re’s 2021 COVID survey around the Asia Pacific, found that two-thirds of customers were still concerned about their health, over a half saying that they needed more medical insurance. KPMG notes the macro themes on the insurance side, that companies that survive are those that invest in trending products, this most importantly being digitalisation. 

Natarajan concludes on the point of culture, and how internal relationships within insurance companies need to change if new technologies are to work. “In order to shift all of these, there needs to be a commitment on every level of the organisation, so from the ground-up, it is becoming easier because the people at the working level are looking around and they are seeing the changes that are happening.” 

This follows a recurrent theme seizing not only the insurance sector but all legacy businesses in banking and technology, around the shift in demographic.

A report from Standard Chartered saw that post-pandemic, over $20 billion was invested into insurtech in the Asia Pacific over five years. It also found that insurers are adapting to a much younger customer base in the L&H division, focusing more on preventative healthcare and reward offerings. There is a push for adopting wellness and gamified processing to further personalise insurance products. 

Vincent Shi, the Head of Greater China and SEA at Remark, explained in the panel ‘Innovating Customer Experiences for the Post Covid Digital Generation’ the importance of insurers offering wellness products. “Technology can enable the insurance company to offer health and wellness so that the value and benefit of the insurance product become more tangible.” Shi makes the deduction that customers who are made aware of their physical fitness become more inquisitive of their health in the future, thus becoming more inclined to favour coverage. 

“As we move into the younger generations, where the younger family members interact with an agent, they don’t have that connection, but still believe that personalisation should exist,” said Max Tiong, Vice President of Digital Transformation Office at NTUC Income. Tiong extrapolates the interconnectivity of the banking sector to the insurance industry, saying “We have to connect our agents, we have to connect our digital channels, we have to connect our stores, and all of these give the same level of experience in personalisation to the same customer.” 

With the number of data points collected by insurance companies today, from medical records to driving history, digital-based claims processing has the potential to be more personalised than the traditional agent to customer interaction. 

Tobias Puehse, The VP and Head of innovation and Customer Solutions, Asia Pacific, at MasterCard, also mentioned in the discussion, “You go to a website, and if you’re a returning customer, they will suggest you products, they will offer you loyalty, different types of offers and rewards that you wouldn’t experience if you walked into an NTUC store or grocery store.” The ability for digital services to do this, and automate the front and back-office claims processing, is through data analytics. 

A whitepaper from HEAVY.AI mentioned that Big Data is a $2.4 billion industry as of 2018, and McKinsey predicts in their report that by 2030 half of the world’s auto vehicles will be covered by telematics-based insurance policies, with markets from New York to Shanghai becoming increasingly more homogenous. 

With the use of data, insurers can better streamline their processes to the point of touchless claims processing, installing modern tools like smart contracts and blockchain technology.

“Smart contracts are nothing else but a computer program or a code, which reflects, for example, an insurance term agreed by counterparties, between an insurer and a client. An event will trigger, at the end of the day, and automate the execution of the smart contract, according to the terms set in the agreement, with immediate settlement or payout,” said Dom Braun, the CEO of Lykke Business, during the discussion, ‘Delivering Smart Contracts through Intelligent Information Management.’ As these types of agreements are written in code, they are stored in an encrypted blockchain. This technology has proved effective already in the insurance sector. 

Edmund Situmorang, the Chief Technology Officer of Prodigi (Sinar Mas Group), talked about the need for blockchain in handling personal data, “It is almost impossible for us to keep such a large chunk of information in one place without a way of securing it […] the three-dimensional works of blockchain has helped us to understand that there is no other way of doing security in terms of keeping an integrity of data.” 

Smart contracts are still very new to insurance, but their implementation can remedy crucial issues currently plaguing insurers in cost reduction and administration.

Implementing automated solutions, with AI and ML, in the end-to-end of claims processing, cuts down the amount of time it would take to process a claim, thus reducing the amount of cost and manual labour, which can be better used in the adversarial, personal, aspect of insurance. 

“When we spoke to our carriers, everyone agreed that we don’t have a unified system that tracks the end-to-end journey,” said Chirag Jindal, the Head of Insurance and ServiceNow in his presentation ‘Improving Loss Ratios and the Claims Experience.’ “When we think about interaction, it’s not only the front-end engagement. That front-end engagement can be quick and easy only if it’s tied with the back office.” 

In their whitepaper, BluePrism highlights the key benefits of automating back-office operations. The use of robotic processing automation (RPA) would ensure accurate results as they are devoid of human biases, a Deloitte survey found amongst its respondents that the adoption of RPA increased accuracy by 90%, and a further 59% and 86% in cost reduction and productivity. 

BluePrism’s whitepaper also listed several areas where automation can be integrated, mainly in the onboarding process and in claims settlements. 

Through automated document processing and verification, claims can be handled with much more immediacy and attention because it mirrors the current behaviour of online consumers. 

“When you think of your customers and distributors, they are demanding the consumer-grade experiences they are used to. They are used to the Ubers of the world, the DoorDash, the Venmos of the world, and they are demanding that experience from their carriers, especially their claims organisation,” said Jindal. 

Reuter’s highlighted in their analysis of the Asia Pacific that the region was particularly exceptional in their use of data analytics to offer more personalised, on-demand insurance. This rings true for insurers like Dai-Ichi and Bajaj Finserv, the latter of which recently launched an app with frictionless access to insurance products, including a subscription-based wallet and Covid cover. 

These insurance companies have found a winning solution with digitalisation, one which foregrounds the contextual needs of customers. 

About InsureTech Connect Asia

InsureTech Connect Asia is the region’s largest insurtech event, offering unparalleled access to the largest and most comprehensive gathering of tech entrepreneurs, investors, and insurance industry executives from across the APAC region. ITC Asia will be held  7 – 9 June 2022 at Suntec Singapore Convention & Exhibition Centre. Get 20% off current prices when you use the promo code: FF20. Register now to secure your spot.  For more information, please visit: https://asia.insuretechconnect.com.