January
16, 2020| By Hugh Terry, The Digital Insurer (guest
contributor)
Over the past few months The Digital Insurer (TDI) and the Gen Re team in Asia have been
working closely on the first issue of Life and Health in Asia, our new quarterly joint newsletter charting
the rapid pace of digital innovation and adoption across the region and
providing in-depth coverage of the key protagonists operating in the
insurance space.
As part of the first edition, it was a pleasure
to collaborate with Dar Wei Woon, Gen Re’s Head of Strategic
Initiatives for Life/Health Asia, in thinking about and articulating our
combined views of the 10 key digital trends shaping Life and Health
insurance across Asia’s many markets.
The full article is available to read on the TDI website
(registration is free), but I thought it would be worth highlighting, granted
somewhat subjectively, the three trends that interest me the most and to
consider the likely impact in the medium to long term on the insurance
industry.
1. The
omni-customer
The macro trend of changes in consumer behaviour
from the ubiquitous use of smartphones is still playing out. However,
particularly for Life and Health products that are inherently complex, it is
not a simple digital-only world. People have different attitudes towards
engaging with technology, and insurers have struggled to upgrade their people,
processes and technology to cater to a genuinely omni experience that can deal
with customers on their preferred terms.
Likely impact: It’s happening here and now - but we have
heard relatively little about how digital-only models need to bring back the
human element in their propositions. As we move forward, we expect digital-only
models to be scrutinised closely for their ability to generate upsell and
cross-selling in addition to acquiring large numbers of customers from the
sales of small-ticket embedded insurance.
2. Risk reduction
as the new trend
Sometimes we forget the obvious: The honest
consumer would rather avoid a claim than make a claim. So, insurers with a
mission to reduce their role as indemnity providers and become risk elimination
partners will thrive. Digital allows insurers to increase customer retention
and create new revenue streams in value-added services to keep their customers
healthy and informed.
Likely impact: Huge, but it’s not completely clear how it
will play out as the health and wellness ecosystem is still in a relatively early
stage of development.
3. Health
innovation is disrupting our entire industry
The image below shows TDI’s view of the
healthcare value chain. Smart insurers are doing their best to develop, or more
likely, to partner with digital health services that engage and empower
consumers. The hope is that such services not only can help to reduce risk but
help consumers make better choices around healthcare, as well as aggregate data
that will provide insights into how businesses and services are run, such as optimizing
the hospital network and enabling customer segmentation.
Likely impact: This is a significant trend, but one on a
slower path of development as the ecosystem is complex and quite rightly needs
enabling and protective regulation from governments around data security and
privacy. Many “Life only” insurers could get caught out by this change, while
group health insurers currently struggling with unprofitable portfolios could
learn the most quickly how to manage the underlying risks in the data-led world
that is fast-emerging.
Asia is leading the
way - but these are global trends
These trends are all applicable on a global
basis, but it is within Asia where growth rates remain strong - and where
digital adoption comes with less “legacy” - that we are seeing significant
innovation and the development of new business models.
Having migrated from Europe to Asia over
25 years ago, I suspect I am biased but I wouldn’t hesitate to recommend
that insurance professionals looking to fast-track their careers, or become
entrepreneurs, find a way to get experience in Asia if the opportunity arises. The
next 10 years will see more change in the life insurance industry than we
have seen in the last 50.
About the author
Hugh Terry is
the Founder of The Digital Insurer. He has more than 20 years
experience in the insurance industry including operational, consulting and
entrepreneurial roles. He is an actuary by profession and lives in Singapore.
He is passionate about the application of technology to insurance business
models and as well as writing articles he actively shares his experience via
consulting assignments, speaking opportunities and participation in
entrepreneurial initiatives in the field of digital insurance.
No comments:
Post a Comment