How Allianz is digitizing to keep up with today’s insurtech players
Traditional insurers, ones that are no stranger to calculated risks, are being challenged by the growing prominence of new insurance technology (insurtech) companies.
It seems like these emerging digital leaders are winning over markets with innovative insurance products, quicker approval processes, and tailored policies.
The incumbents still have strengths that insurtech companies can’t match – for now. Armed with extensive institutional knowledge, risks expertise, and consistent cash flow, incumbents can achieve wonders if they can match the speed and efficiency that insurtech players offer.
Though it took them a while, traditional players are finally realizing why it is so vital that they embrace digital disruption and give themselves the much-needed boost through innovation. According to Accenture, 90 percent of insurance executives have laid out digital innovation plans for their firms.
Malaysia’s Allianz Life Insurance, for one, is catching up in the tech scene by automating various processes and digitizing operations. In particular, the company is focusing on leveraging solutions to simplify and shorten the length of policy approval to win customers and revolutionize age-old systems that limit growth potential.
“The internal complexities create a friction that doesn’t allow policies to be issued fast, although customers want it,” Allianz Life Insurance CEO, Joseph Gross told The Malaysian Reserve. The company has streamlined its products and is now delivering its policies digitally via e-policies which account for 25 percent of its new business.
“We dissected the process of policy approval and re-evaluated why we need these steps, such as unitisation that usually takes 24 hours. So, we stripped off that core process which is totally legal, and challenged the process,” he said.
An interesting approach that the company has adopted is by ‘digitizing’ its 4,300 agents in order to deliver insurance products quickly and seamlessly. It has done so by reskilling them to be tech-savvy enough to use tools that can automate most of their tasks and drive efficiency by getting policies approved in just 5 minutes.
Such an initiative is important because a seamless and fast experience is what most tech-enabled insurers are pushing forward in the market right now. Allianz Life has reported that not only have customers’ experiences been elevated, but agents’ workflow has also improved as workload burdens are reduced.
“Allianz is the only insurer who can approve policies over a cup of tea,” the firm’s CEO said; but wouldn’t the act of endorsing quick approvals be a risky one?
To this, Gross reassured that the company remains strictly compliant with regulatory requirements. In terms of due diligence, nothing has really changed. “In terms of our underwriting discipline where there is no medical underwriting needed further, then it is a straightforward process and customers will receive their policies,” he said.
If life insurance customers exhibit preconditions, like regular smoking, then underwriting will be done. Gross also said that the company aims to distribute its insurance products and services effectively on digital channels and platforms through partnerships in a bid to stay relevant in the market and win the trust of new-age customers.
Previously, AXA also pushed forward with digitization by leveraging data analytics and artificial intelligence (AI) capabilities to transform existing products and be more tech-enabled. As a result, the company has managed to boost revenues and delight a greater portion of the market.
One thing is for sure, incumbents need to be at the forefront of emerging technology trends, global market demands, and increased customer needs to be able to gain a competitive edge over insurtech players and secure profits.