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Think Big. Think Digital: How to Drive Profitable Growth in the Insurance Industry

Digital transformation is no small feat for insurance companies as they face inflexible legacy systems and a culture that is notorious in its resistance to change. Yet change they must if they want to succeed in the age of the customer. Customer centricity is more important than ever when it comes to driving profitable growth of insurance companies. These customers are digital natives who expect personalised and pain-free experiences. They desire meaningful interactions at every stage of the policy life cycle. A “one-size fits all” policy does not cut it in the 21st Century, customers want products and services to suit their individual needs.

Big data, advanced analytics, AI and machine learning are all part of the new technology toolbox that can help accelerate insurers’ digital transformation journeys. Adoption of these technologies is clearly on the rise: IDC’s 2016 European Vertical Markets Survey indicated that nearly half of insurers are using Big Data and analytics solutions. The EY research on Digital Transformation in Insurance stated that “many early adopters and fast followers have already demonstrated the potential to generate value by embedding digital capabilities deeply and directly into their business models.”

So what’s holding the majority of the industry back? The EY paper suggests formidable cultural barriers. Most insurers are unable to move at the speed of digital. Insurance companies also lack the talent or workforce to thrive in this new era. Nevertheless digital transformation should be an important feature on any insurers’ strategy plan.

Spotlight Feature: Walter de Oude, CEO, Singapore Life - the little red dot’s first truly digital life insurance provider

“It should be as easy as buying a plane ticket”

Singapore Life is a 100% digital and technologically enabled life insurance company. We take all of the efficiency that technology provides and use it to create better value and experience for our customers.

We began our journey back in 2014, taking around two and a half years to build. By 2017, according to regulator statistics we were the largest digital life insurance business in Singapore.

As a veteran of the industry, I began to realise that it had not kept pace with the rapid changes in technology. The idea behind Singapore Life was to look at the way that customers preferred to engage with companies. We believed there was a real opportunity for a company to be able to provide financial services products in a way that was in line with modern consumer behaviour.

Traditional insurance companies make it very hard for consumers; there are so many hoops to jump through. What Singapore Life does is try to take the hassle out of the process. For example we provide a digital application process that allows customers to answer a few questions and demonstrate their identity online. They don’t have to visit the doctor for an evaluation. It could take around ten to fifteen minutes from a consumer deciding they need life insurance to purchasing it. It should be as easy as buying a plane ticket.

Although policies are confidential they are easily accessible online by the customer using a login and one-time pin. All their insurance ‘paperwork’ sits in one place available for access anytime via their phone, laptop or tablet or other device.

For a digital insurer, the first most important part is to get the right technology infrastructure. This means integration layers and CMS integrations as well as a customer journey which we can optimise continuously.

Second is to use sophisticated rules based engines to make it a more technological process around assessing the customer’s health status. As a customer goes through the journey to buy life insurance, they need to tell us about their health status. We use smart technology to ask probing questions so we are able to evaluate online. For example if a customer was experiencing chest pains or diabetes then the technology would deepen the questioning to decide the extent of the issue and help the customer come up with the right price for their life insurance. All completed in a simple easy-to-do manner.

We’ve also just launched an advisory chatbot to help customers understand how much life insurance they really need to buy because it’s rather a grey area for a lot of people. By just asking some simple questions about income, future expectations and household size the bot can provide customers with a reasonable indication of what they should buy. This all helps build an easy first touch point for customers with us. They come in, they click on ‘get a quote’ and then they can easily see how much it costs for different amounts of cover.

It all comes back to making the process as pain free as possible for the customer. We are seeing that policyholders are sticking around longer which indicated that they like the service they have. With our acquisition of Zurich Life last year, all our new policyholders have digital access to their policies online anytime which they never had before. We have seen that compared with their history profile more people are staying and keeping their policies than they had previously.

I think eventually the whole market will evolve to use the benefits of modern technology. We are dealing with an industry that is hundreds of years old and therefore comes with lots of past practice. The biggest challenge for the industry is realising that past practice should not dictate how we operate in the future. We need to constantly challenge past industry practice and evaluate how things could be done. Even though Singapore Life is a first mover in this space, we too will need to constantly evaluate how we can adopt and improve in the fast-moving world of technology.

Walter de Oude will be speaking at Digital Transformation for Insurance 2018 on realising the benefits of a scalable, lean and agile digital insurer. Returning for a 2nd year, the Digital Transformation for Insurance 2018 conference will explore practical next steps towards accelerating digital maturity and how insurers can scale agility in their organisation through a series of impactful discussions spanning digitising back and front-office operations, harnessing AI for customer insights and customer-centric product innovations.

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