Over the next few years, how one insurance company stands out from the rest will not be so much about the products it offers, but rather on how well it executes its digitalisation strategy, said a panellist at Digital News Asia’s recent What’s Next conference.
“What is going to differentiate us from the rest is who is digitalising faster, who is going to give that customer experience of the lifetime from the beginning, and servicing it to the end,” AmMetLife Insurance Bhd chief executive officer Ramzi Toubassy told the audience in Cyberjaya. But even if insurance companies are cognisant of this looming reality, the digital transformation journey will not be easy, according to Toubassy.
“The ‘good news’ about life insurance is that people will continue to die, they will continue to face accidents, and they will continue to live too long and fail to plan for that future,” he quipped. “As long as these three characteristics are there, life insurance companies will continue to be there.” “The bad news however is that we are a dinosaur,” he added.
The insurance industry lags behind many others in the financial services space. Toubassy noted that today, users can check their bank balances, transfer funds, and perform many other transactions online. “However... if you call your life insurance company to get certain information about your account, it could take a very long time — simply because most insurers are not ready for that type of demand yet,” he said.
Toubassy was speaking as a ‘Provocateur’ at the What’s Next conference, at a session featuring Accenture Digital Asean managing director Dipen Mehta, whose topic was Insurance in the digital age — Whose business will it be?.
The session was moderated by Sophie Kamaruddin of Bloomberg TV Malaysia. Still a place for people Although digitalisation will have to play a key role in insurers’ long-term strategy, it does not mean that the days of insurance agents are numbered, said Toubassy.
“The way we are going to the future is to strike a balance. For simple life insurance products, one can do it online, but for the more complicated ones, you will still need an agent’s expertise,” he said. Dipen concurred.
“I am not here to say that the future of insurers in the digital age is about direct subscription or self-service. “It would be a bad idea to give up all the infrastructure in place with your agents. It is like going to the banks and saying that all transactions are going to be done online, so there will be no need for branches anymore.
“Agents have their place in this ecosystem, so insurance companies need to look at ways of using IT to keep agents informed, and keep customer engagement high,” he argued. Dipen also stressed that digitalisation is not so much about replacing incumbents, but about complementing them with the existing business.
“They have to co-exist,” he said. CIO-driven plans will fail Dipen also argued that that insurers’ digital journeys should not be driven by chief information officers (CIOs), but by those closer to the end customer. “If you are doing digital through your CIO organisation, you are destined for failure.
IT needs to exist, but it doesn’t have to be driven there. “Doing digital is more about marrying it [technology] with sound business strategy and the customer value proposition,” he said. Insurers should also relook at the data they have in hand, so that they can have a better, more holistic view of their customers.
“Today, do insurance companies really know their customers? Probably not,” he argued. “Insurance companies have access to much information around their policy-holders, but it is very departmentalised, it is very fragmented, it does not give a holistic picture of the consumer.
“For example, if there is a 26-year-old male who is very healthy, has a steady day job, works in a major city, and lives in an area with a low crime rate, insurers will be more than happy to have him as a customer. “However, if there’s a way get access to his social media account and discover that this same person likes to do base jumping every weekend, insurers may then have different thoughts about the person,” he noted.
“That’s why aggregating all that information can be something very powerful,” he added. Death and life In his 20-minute presentation, Dipen told participants that there are many ways for insurance service providers to further innovate, especially in this part of the world. He cited a few examples of how newcomers to the industry are leveraging on digital technology to offer solutions to consumers.
For example, Oscar, a New York-based insurer, offers its customers US$1 (RM4.10) for each day they walk 10,000 steps. It provides its customers with a Fitbit-type of device to track their steps.
“Life insurance today is really about death. But I think where it is going is that life insurance is about life. “It is about bringing in technology to better measure what your life is about, and how to make it healthier,” he added. The What’s Next: The Business Impact of Disruptive Technology conference
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