As digital adoption accelerates globally, digitalisation is changing from a luxury add-on to a must-have for insurers. Transforming a company, let alone an industry is no easy feat. Winners of the digital race will be those who: establish a clear long-term customer-centric strategy, invest in the right technologies to improve customer experience, and evolve in symbiosis with customer needs.
Insurers have been challenged by rapid digitalisation and only few have managed to keep up with changing customer needs. In fact, over half of consumers across six countries in the Asia-Pacific region feel that insurers fall behind other industries in terms of technology utilisation, responsiveness, and personalisation, according to Insurance Redefined – A Roadmap for Insurers and InsurTechs report.
The fact that insurers are lacking behind is worrying seeing as customer expectations will only continue to rise, and likely the pace as well. The "digitalisation train" is about to leave the station, and the time for traditional insurers to act is now. This is further highlighted by Swiss Re’s COVID-19 Consumer Survey that shows that 68% of respondents consider "the availability of an end-to-end digitalised journey" the next most important factor when choosing their new insurance policy after pricing as reported in.
To sustain growth, it is therefore crucial that insurers adapt a proactive digital mindset. In this article, we look at four innovative examples of how Asian insurers have embraced digitalisation to create a better customer experience.
1. Focus on creating long-term customer value
True customer value is created when products and processes are created with the customer at the center. This is easier said than done, especially when technology and customer needs evolve rapidly. Becoming customer-centric is not a project with a defined start and end date. It is a never-ending journey with ongoing adjustments.
As of 2021, many insurers have digitised traditional, paper-based processes, but very few have redefined their products and processes with customer-centricity in mind. While all progress should be celebrated, digitising old processes doesn't magically create engaging, long-lasting bonds with customers. Creating positive experiences with insurance as a stand-alone product is extremely difficult if we take a traditional view of the core product. In essence, it's the product we all need, but hope to never use.
So how can insurers change customer perceptions and become a life companion that creates ongoing value? Enter SNACK! Launched in June 2020, Singapore NTUC Income’s SNACK is a great initiative where there is ongoing, positive connection between the brand and consumer's lifestyle. SNACK provides a flexible micro-insurance for tech-savvy millennials by working in the background to help users accumulate insurance coverage and grow their investments with day-to-day purchases.
A great showcase of how insurers can move outside the core product in creating ongoing, integrated experiences that build long-term customer value, NTUC Income also launched SNACK Investment — one of the first micro investment-linked plan (ILP) in the region in September 2021.
2. Move at the speed of your customers
While innovative and personalised offerings can help attract consumers, efficiency and speed keep them satisfied. A McKinsey Benchmark Survey conducted with insurance customers from China and Hong Kong shows that 75% of online customers expect a response to their request within the first 5 minutes of being on a platform and will only spend 1 minute at an online touchpoint.
As it is impossible to turn your workforce on and off in line with fluctuating incoming requests, insurers have been leveraging automation and Artificial Intelligence (AI) technologies to appear "always on" and responsive.
For instance, Ping An Insurance launched a smart credit-based motor insurance claims systems where motorists can quickly conduct self-assessment of external vehicle damage using their mobile application. Besides speeding up the insurance claims process for minor vehicle accidents, the insurer reduces claims cost and improves customer experience.
The story of how Ping An went from a traditional insurer to standing among tech giants is one often told but challenging to achieve. This speed and agility to respond to evolving market needs can be achieved through adopting application architecture that enables greater flexibility and scalability in technology implementation. One that allows new tools and technologies to be added, and legacy technologies to be quickly replaced without disrupting the underlying processes.
3. Innovation through collaboration
Incumbent insurers are seeing aspects of their operations disrupted by innovative, tech-enabled players. Instead of viewing the new entrants as competitors and attempting to revolutionise alone, a collaborative approach is the way forward for all parties.
Open insurance and ecosystem collaboration allow insurers to enhance their offering and customer experience. At the same time, it offers other ecosystem players like super apps to monetise their userbase in new ways they could not have done on their own.
One example of a traditional insurer and a tech giant joining forces is Chubb and Grab — Southeast Asia's leading super-app. Together, they launched an in-app travel insurance, Travel Cover, to offer a fuss-free solution to buy travel insurance for vacation and business. With Travel Cover, Chubb could instantly reach consumers within Grab’s digital ecosystem while Grab added a new revenue stream.
4. Integrate to differentiate
On top of establishing partnerships, insurers could also expand their digital network by harnessing the power of IoT technologies and digital platforms, to improve nimbleness at both front-end and back-end of operations. For instance, Nationwide Insurance partnered with Notion to introduce a smart home monitoring system that allows consumers to track real-time water leaks or sounding CO2 alarms via their mobile device.
At the customer-facing end, insurers are offering personalised offerings via self-serve dashboards and mobile applications, and collecting valuable data via IoT devices or wearables. The data gathered then become customer insights that guides insurers and brokers to make more accurate, data-driven decisions in their underwriting, policy offerings, and new propositions.
A noted example in Asia is ManulifeMOVE — a behaviour-linked customer rewards program that integrates activity tracking and insurance solutions to encourage customers to cultivate healthy habits. In collaboration with partners like dacadoo — a Swiss-based global digital health provider, Manulife is embracing technology and health data to generate informative insights to better serve its customers.
Achieve agility and stability for sustained growth
Customer needs will continue to evolve as technology advances and industry structures shift. For innovative insurers who take a proactive approach, digitalisation offers a wealth of opportunities.
Our prediction is that those who move fast and collaborate will reap the rewards with more brand-loyal customers, lower operating costs, and accelerated growth.
The first step in doing so is to create solid technology built on data foundations and establish an innovation culture.
Leading Insurance at Zühlke Singapore, Peter Haarmark has over 15 years of experience working in cross-functional roles in tech start- ups and global companies. Before joining Zühlke, Peter worked for a large Danish insurer in Europe and also created the commercial insurance offering for a leading cloud- based corporate services provider in Singapore. Peter holds the General Insurance License from Singapore College of Insurance.