Online Life Insurance

Malaysians are increasingly embracing digital channels for their insurance needs. There has been 60% growth of digitally active consumers in the property and casualty (P&C) and life insurance segments in the past two years. 

The report says with the emergence of fintech platforms and online aggregators, the competition between these firms and traditional insurers has now intensified. Direct interactions with providers via digital channels are now possible, leading consumers to expect easy, fast and convenient internet and mobile applications.

Despite this, insurers cannot afford to lose their “human touch” when interacting with consumers. Digital channels are only complementing, and not completely replacing, the other channels. The importance of human interaction has not diminished.

Hybrid channels — that is, digital and physical human interaction — is much better than a consumer who only interacts digitally. A consumer who only interacts with an algorithm that only provides automated recommendations, for example, will not have as fulfilling an experience as having both the algorithm and adviser at the same time to interpret the recommendations.

AIA Hong Kong and US-based MetLife have announced that they are joining a private financial blockchain consortium led by New York-based start-up R3 in an effort to explore the potential application of blockchain technology in the insurance industry.

Recently, insurance providers Sun Life Financial and Aviva announced a partnership with Silicon Valley-based venture capital firm Plug and Play Tech Center to explore, recognise and support the development of potential innovations in the insurance industry.

More than half (60%) the Malaysians surveyed say they would value a platform that provides services that go beyond insurance protection, creating an opportunity for P&C and life insurers to generate additional sales. These new opportunities may include ancillary services such as health monitoring, fitness planning and legal advice.

Some insurance providers, such as Metromile and Discovery, even offer anti-theft services, where consumers are alerted if the telematics box that has been installed in their car has been removed. AXA Germany, on the other hand, uses a third-party automation system to monitor floods and minimise damage.

“One of the value-added services in Singapore that consumers love is getting advice on retirement and hospitalisation. The report also says more than 80% of Malaysian consumers are willing to share their financial, health and other personal data to gain access to these additional offerings. This signals consumers’ trust in their insurance providers, thereby opening the door for these insurers to build a stronger relationship with consumers.

Malaysia can benefit from having reliable consumer data. This allows pricing to be a lot more flexible, especially with the detariffication of auto insurance. Individual data can help insurers give a more tailored quotation as they are able to leverage this to implement better price segmentation. With the information being voluntarily shared, as long as the insurers respect the confidentiality agreement, there is a huge potential for them to reap the benefits of consumer data.

Due to macroeconomic and regulatory forces, insurers are beginning to realise the importance of consumer loyalty and advocacy to achieve substantial long-term benefits. To increase consumer loyalty, insurers could offer multichannel interactions, ask for consumers’ feedback at the end of each interaction and invest in the right space.

The touchpoint (point of contact between a buyer and a seller) is usually the underinvested part of the organisation. Insurers need to rethink this and try to offer better technology at the front end and understand what consumers are happy or unhappy about. It may sound simple, but it is actually very important in increasing consumer loyalty.

In an effort to increase retention and consumer loyalty, some insurance providers such as AIA and Manulife have implemented programmes that give consumers rewards in exchange for living a healthy lifestyle. Through the AIA Vitality programme available in Malaysia, consumers are offered rewards in the form of discounts for air tickets, healthy foods and sports apparel. The ManulifeMOVE programme in Philippines and Hong Kong offers a special rate for consumers’ premiums.