Have insurers made digital the strategic priority it needs to be?
This past decade has been marked by disruptions, capped off by the challenges presented in 2020, and the rapid disruptions that brought – and the insurance industry is surely not exempted from it.
The Asia-Pacific region is home to nearly one-third of the world’s population, and can arguably be said to hold the key to the insurance industry’s future. Thus far, the underlying principles of the insurance business remain relatively the same.
However, the decade brought about several challenges that are common to insurers across the region. These include intensifying regulations, shifting dynamics, uncertain risks, and a change in customer expectations. In this region, non-life insurance is gaining momentum. It had a gross written premium (GWP) of US$564 billion in 2018, a huge jump from where it was just five years back in 2013, at US$392 billion.
EY’s 2020 Asia-Pacific Insurance Outlook noted that to maintain a competitive edge in the industry, insurers must consider the following:
#1 Leveraging technology and data
The bar has never been higher than it is today when it comes to consumer expectations. Experiences are often valued as much as – if not more – than the product, and customers expect consistently seamless, personalized digital experiences.
To meet these expectations, insurers must utilize the data they possess and leverage it to develop products that would meet their customers’ expectations. China has already been quick to do so, and its efforts are yielding impressive results: one fintech company, for example, is providing insurance coverage for migrant workers simply via a platform and a mobile app, and can cover up to 100 illnesses.
However, insurers must bear in mind that views on data privacy vary regionally. Japan, for example, places heavy emphasis on data privacy, setting a very narrow perimeter around what insurers can do with data to generate insights and recommendations. On the other hand, China has taken a more liberal approach to data privacy, leading to great innovations in data analytics.
#2 Digitizing the insurance salesforce
Distribution patterns and practices vary across the region. In China and Australia, digital is taking over, and intermediaries are fading out. This is not the case for other markets like Malaysia and Indonesia. Today’s insurer cannot rely solely on digital or intermediaries, a few things should be considered.
Firstly, investing in a platform and channel integration system to streamline operational processes. Secondly, consistently deliver an omnichannel experience. Thirdly, maintain solid relationships with intermediaries.
For some markets (such as Singapore), intermediaries have strong access to clients, and also a robust understanding of the market. In such cases, they play a large part in increasing new business volume.
#3 Penetrating the SME market
Too often, insurers overlook small and medium enterprises (SMEs), missing out on an underpenetrated segment. The unique structure of SMEs would require niche insurance policies, something that insurers can tap into. Also, insurers can appeal to SMEs by enhancing direct channels, and developing ways that make it easier for them to access and manage their policies and coverage.
The objective for insurers is to give customers the personalized experience they want. Having a strong digital game will help insurers meet this, help reduce costs, and ultimately, sell more products.
- Global chip shortage dents Nissan’s electric vehicle dreams
- Today’s Digital Customers Demand Exceptional Customer Experience
- Woolworths Group weaves into Aussie fintech market with WPay
- Huawei’s homegrown smartphone OS designed for the era of IoT
- CBDCs, fintech footprint boosted in Hong Kong by latest national strategy