Developing Clear Strategies

Planning and strategizing enable you to identify opportunities, make informed decisions and maximize your growth potential. Here are some key points for developing effective strategies:

Analyze the current market and trends: By monitoring the market trends and competitor strategies, you can spot any potential opportunities to capitalize on. You should also consider up-and-coming technologies that could disrupt your industry to stay on top of the latest trends.

Set goals and objectives: Goal setting is a natural process of business. But here's some advice: set realistic goals that are reachable within a specific timeline. Stay focused on achieving goals, and don't get distracted by other tasks or projects. Be SMART (specific, measurable, actionable, relevant, time-phased) when setting goals. This process will ensure you have a plan of action that can be easily tracked and monitored.

Create a timeline: Planning out each task into specific steps with deadlines helps you focus on completing each step efficiently to reach your goal in time. This also keeps you accountable as you work toward achieving goals over time instead of getting overwhelmed by tackling everything at once.

Develop an implementation plan: Once the timeline is set, create an implementation plan detailing each step in the process and any resources or risks involved. This detailed plan will help minimize surprises along the way, which can lead to delays or unnecessary costs.

Monitor progress: Regularly monitoring progress allows you to make necessary course corrections quickly to stay on track toward completing your goal within the desired timeframe. It also helps detect areas where additional resources may be needed, such as hiring new staff or investing in technology solutions.

Training - Artificial Intelligence & Virtual Reality

Bank of AMerica is using digital tools to prepare employees for real-world situations. The bank is using the latest in artificial intelligence (AI), virtual reality (VR) and the metaverse to create an immersive learning experience for its employees.

These simulations act like practice reps. It makes a new employee experienced, even if they’re brand new. The technologies are used to help train staffers about such things as calming an angry customer or remaining calm themselves during a robbery, according to the report. They are also used to provide virtual tours and explanations of bank branches, the company’s history and employee benefits.

With this teaching method, Bank of America aim to provide a hands-on and interactive training approach to staff, so that they have the capacity to better understand the complexities of their jobs and the bank itself.

More than 200,000 staffers around the world — both new recruits and existing employees — have used at least one of the technologies for training. The immersive experience delivered by the technology helps simulate conversations with customers during training: “It’s hard to teach traditionally. VR creates anxiety, it gets your heart rate up. It makes you nervous.”

For example, in January, Workplace VR startup Gemba raised $18 million in a Series A funding round to continue expanding its selection of training simulations, tools, events and learning experiences.

In October 2022, it was reported that the Interpol has built a global virtual training facility in a private metaverse that includes a training course on travel document verification and passenger screening.

Disrupting Agent Channel Of Distribution

The fundamental economics of the global life insurance industry are broken, with distribution consuming an increasing share of the industry’s total economic value, compared with customers’ declining share. After decades of limited innovation, traditional distribution is on the cusp of meaningful change—especially in the agency channel—which will unlock benefits for all stakeholders.

Of course, transformational change is not so easy to accomplish. Agents have historically been resistant to change, significant amounts of technology and innovation are required, and some insurers still struggle to separate the performance of new business from that of the in-force book. 

Human-to-human interaction will remain key to insurance distribution, but the role of agents will change as the use of data and predictive analytics grows, customer behaviors evolve (with the use of mobile devices and social media, for example), regulations continue to change, digital players from adjacent industries look to disrupt the insurance industry, and traditional competitive pressures continue to increase.

1: THE FOUR FOUNDATIONAL ELEMENTS OF TRANSFORMATION

Carriers should identify, design, and implement a set of holistic initiatives based on the four foundational levers of transformation. Depending on the carrier’s starting point and ambition, it is quite possible to lower acquisition costs, reduce administration and deploy capital more efficiently.

A: Reinvigorate the agency. The term “agency” is used to include any form of human-to-human distribution. Insurers need to start by improving agent “life cycle” management: recruiting, onboarding, and retaining agents to create a more vibrant and productive channel. In many locations, the agency force is aging and the industry is finding it difficult to recruit the next generation of talent. In many developed countries, the average age of agents is 56 and recruiting the next generation has proved challenging. Only 4% of millennials are interested in a career in insurance.

Insurers need to segment their agents based on performance and build a more nimble support function to help them maximize their potential. Individual agent compensation should increase to motivate existing high performers and attract new talent. 

B: Revamp solutions. Most insurers considered their primary customers to be their agents. This has resulted in products that are overly complex, do not resonate with customers, and reinforce the adage that life insurance is “sold not bought.” It’s time to design simpler and more customer-centric solutions and ensure that the average customer understands how these products can address their needs. 

Divert Agent's need from “pushing products” towards “providing holistic solutions.” This will require more training and a focus on creating new offerings that address evolving needs around health, wealth, and wellness. This approach could help counter many consumers’ distrust of the life insurance industry. 36% of consumers rate the honesty and ethical standards of the insurance salesperson as low or very low.

C: Drive efficiencies. Raise productivity by investing in digital and advanced analytic capabilities that can provide agents with qualified leads with a high propensity to buy and qualify for coverage. Insurers in China have made significant per agent productivity gains thanks to their transition to a digitally delivered, analytics-enabled, end-to-end experience.

Automation and artificial intelligence will be critical to driving efficiencies and making the underwriting process simpler, faster, and less invasive, thus reducing overall costs (such as those associated with medical exams). For example, straight-through processing can modernize, streamline, and automate front-, middle-, and back-office processes. Proven tools such as e-application, e-delivery, and case tracking can reduce acquisition and administrative expenses while improving the customer and advisor experience.

D: Address the in-force book of business. Investors and insurance executives must isolate the economics of the in-force book, new business, and distribution to determine where value is being created or destroyed. Too often, they find unwelcome surprises, such as new business being written at a loss in order to sustain the in-force book and distribution structures. This is mostly a problem in mature markets, where carriers often struggle with capital intensive/low-return in-force books.

2: THE AGENCY OF THE FUTURE

The pace of change will accelerate. Some insurers are already making bold distribution moves, and that is important because digital players from adjacent industries are looking for disruptive opportunities, perhaps as part of a broader health, wealth, and wellness planning and advisory offering.

A: Automation - Although there is no one-size-fits-all formula for success, the agency of the future will likely be fully automated, will provide agents with qualified leads and other digital and analytic capabilities to boost their productivity, and will address customer needs more holistically, with richer solutions across their lifetimes.

B: Human Interaction - Despite all these necessary changes in insurance distribution, human-to-human interaction will remain vital. Direct digital sales will mostly involve simpler products, such as term insurance, unit-linked (variable) savings contracts, and personal lines of insurance. Given the complex nature of many life insurance products and the emotional component often involved, human interaction and distribution will retain their value and importance. 

C: Distribution Inefficiencies - Inefficiencies in distribution are a drain on the entire insurance ecosystem and are not sustainable. While some carriers have begun to experiment with new products, accelerate underwriting, and digitize the middle and back offices, there’s been no transformational change in distribution and no one company has emerged as a clear leader. Insurers that approach the problem holistically, looking for ways to reinvigorate the agency, revamp solutions, drive efficiencies, and address their in-force books will unlock significant value.

Thinking Outside The Box

It it common for organizations to use brainstorming as a method for generating new ideas, but it’s not the best way to be original. Brainstorming certainly captures a lot of excitement and intrigue. It’s fun to do and people like it. But it’s really just a bias-making exercise inherent to the way it’s structured.

Choice Mapping is recommended to replace brainstorming.  

Choose The Problem - The first step is to choose a problem to solve. It is simple but most of the problem may not be self-evident. The problem may be that you need to be aware of potential disruptive technologies. Or you may want to know how to make your current product lineup more carbon neutral.

Break It Down - Break down the problem into subproblems. You may identify several but choose no more than five. Subproblems are a piece of the larger puzzle. If you were to solve these, you’ll solve about 90% of the problem. Breaking down the problem into subproblems becomes a thought exercise. The more meaningful and deliberate you are in the process, the better your results will be.3. COMPARE WANTS

Compare Wants - Determine what you want to feel when you solve the problem. “Most of the time when people say, ‘What do you want to achieve? What are your goals? What are your metrics?’ it becomes very objective. Humans are not objective creatures. Instead, it’s about ‘How do you want to feel? Everybody’s got some feeling, and you might as well just surface that because that is ultimately going to serve as your selection criteria. And if it doesn’t serve as your selection criteria, you’re never going to be motivated to take that idea.

Search In & Out The Box - Create a structured process for gathering relevant information by creating a matrix. With the problem broken down into five subproblems, find two examples of how the subproblem has been solved within your industry and three examples of how it’s been solved outside of your industry. Typically, when someone has a problem, they go look at what their competitors have done and they study their own area of expertise. On a choice map, only 20% is dedicated to industry expertise. If you want out-of-the-box solutions, you have to look at what exists in other boxes.

Create A Choice - The fifth step is choice mapping. Take one option per subproblem and determine how you could combine them to create a new solution. You have so many possible options that you can be combining. No two people imagine the same thing given the same materials. Look at the choices separately, not in the same room. That’s how you’re going to get real diversity

Third Eye Test - Choice mapping can create thousands of unique solutions. Compare your wants to get a big picture score, then use your big picture score to identify your top five different ideas. 

Brainstorming is the golden child for coming up with ideas, but most ideas suck. “Instead, you need to teach people how to come up with good quality ideas, and in particular, how to evaluate them. The key is creating choices. Multiple choices don’t come from giving people pure freedom. You get your best choices through structure and constraints.

Millionaire Financial Advisor

A suspect - who has been working at a bank for more than 15 years, is under investigation for cheating as he has been found operating an illegal investment scheme to bank customers. His wife worked with the same bank and was sentenced to prison for criminal breach of trust involving customers’ monies some time ago.

Millionaire Financial Advisor - The suspect, a personal financial adviser, has been promoting his illegal scheme to retirees and housewives who want to invest their life savings for extra returns. The officer, who is in his 40s, paid returns of about 3% each month and even guaranteed the principal sum to entice customers.

The millionaire suspect, who has been running the scheme since 2015, got over 100 people to sign up for his “investment products”, which required a minimum payment of RM5,000.

The authorities got wind of the suspect’s activities when one of his victims lodged a complaint with the bank’s headquarters in Kuala Lumpur about not getting his dividend on time. Police have uncovered more than 100 victims from Perak and Johor, with losses amounting to more than RM4mil.

It is learnt that a team of Perak Commercial Crimes Investigations Department officers arrested the bank officer several days ago, and he is expected to be charged at the Kampar Magistrate’s Court today.

Bukit Aman sources said the suspect usually targeted elderly bank customers who wanted better returns apart from investing in fixed deposits. The suspect forged bank documents and offered his special package promising payouts either monthly, or once every three or six months. Some of his investors had put in up to RM100,000.

Scam Since 2015 - It is learnt that the suspect also guaranteed the customer’s principal amounts to entice them to invest more. The sources said that the suspect has been able to keep his operation under wraps since 2015, but his scheme was exposed when one of the victims went to the bank to verify the scheme. The bank also lodged a report in May and police officers from Perak immediately started investigations. 

The sources said his ex-wife, a bank clerk, had forged some documents and managed to cash out a customer’s Amanah Saham Nasional savings worth a few hundred thousand ringgit in 2010. She served at least seven years in prison for the crime.

Buy Now Pay Later Debt Trap

Almost a quarter of Jakarta’s 10.5 million residents owe money to online lending platforms, due in large part to ease of access, the Financial Services Authority (OJK) revealed recently, putting the nation’s capital among the top two regions with the highest personal debts.

Rising Debts - Around 2.3 million Jakartans owed a combined total of more than 10.3 trillion rupiah (RM3.2 billion) to various online lenders as of April this year. The figure is 410 billion rupiah (RM126.3 million) more than that recorded in April 2022.

Jakarta ranks second on the list of provinces with the greatest number of individual debtors, after West Java with 4.6 million active borrowers and personal debt totalling 13.5 trillion rupiah (RM4.2 billion).

Most borrower have been using the “buy now, pay later” facility on e-commerce platform Shopee and super app Gojek for some time, and pays between 300,000 rupiah (RM92.4) and 1.8 million rupiah (RM554.4) in instalments each month. Users uses the facility because it helps them keep track of theirer monthly spending on travel and online shopping, but admits that using it requires self-control to prevent impulsive buying.

Buy Now Pay Later - Various studies found that the pay later feature can cause impulse purchases among consumers, leading to overspending and defaulting on existing debts. Despite their convenience, online lending platforms can also be debt traps.

OJK data revealed that the average default rate in Jakarta for various online lending platforms reached 2.9 percent as of April, higher than 2.7 percent in March. The default rate in West Java for April was higher at 3.6 percent.

Online lending platforms have become one of the most complained-about businesses due to their high interest rates and aggressive debt collection. The problem is exacerbated by the fact that 76 percent of all online lending platforms operating in the country are illegal, unregistered with the OJK.

Further Liberalisation General Insurance - Malaysia

It was announced that all 23 member companies under the General Insurance Association of Malaysia (PIAM) and four general takaful member companies of the Malaysian Takaful Association (MTA) are committed to supporting an orderly and gradual transition to market-based pricing as well as provide higher service quality as part of phase two of the liberalisation of motor and fire tariffs.

The phased liberalisation of motor and fire tariffs was announced (BN) with phase one commencing from July 2016. Following this, the industry was allowed to offer new products and optional add-ons, with examples of the latter being flood coverage, lost car key replacement and others.

In phase two, which kicked off a year later from July 1, 2017, motor insurance premiums are no longer determined on a fixed rate basis, but on a risk based assessment system. 

As such, insurers and Takaful operators are now able to set pricing based on various risk factors such as residence location, vehicle make and model, use of vehicle, occupation of owner, claims history, gender and age. The upside is greater competition in the industry and
coverage that best meets their insurance needs.

Vietnam Bancassurance Misleading Customers

Between 32% and 73% of bancassurance customers (Vietnam) terminate their contract after the first year, the Ministry of Finance has found after reviewing data from four insurers.

The highest cancellation rate, of 39-73%, was at Sun Life, which sells its policies through two lenders, ACB and TPBank. Ministry is investigating insurers for allegedly misleading customers. It had sold over 80,000 contracts via banks by the end of 2021 and collected premiums of VND2 trillion ($84.39 million), or 61% of its total premiums.

Prudential, which sells its products through eight banks, had a 41% cancellation rate. It VND6.2 trillion in bancassurance premiums accounted for 20% of its total. In 2021 it sold insurance to 94,000 customers and received complaints from nearly 1,800 of them.

BIDV Metlife and MB Ageas followed at 39% and 32% cancellation rate, respectively. BIDV Metlife sold 21,100 contracts via BIDV in 2021, collecting VND450 billion. BIDV is its only partnership bank.

MB Ageas sold 66,700 contracts via two credit organizations, MB and MB Shinsei (also known as M.Credit), in 2021, with a revenue of VND2.82 trillion.

Investigators of the finance ministry have found Prudential, MB Ageas Life, Sun Life, and BIDV Metlife guilty of misleading customers, who do not understand what they are buying.

Customers have said they were required to buy insurance packages to get loans, which was why they signed a contract for the first year and later terminated it.

Rahmah Insurance & Rahmah Takaful

Government newly-announced RAHMAH Insurance and RAHMAH Takaful packages can be considered as a form of ‘free’ national insurance provided by the Unity Government with its collaboration with the private sector.

Rahmah Insurance / Takaful initiative (government in collaboration with the private sector allows Malaysians, especially the B40 group, to subscribe to insurance coverage or personal accident takaful coverage for as low as RM5 a month or RM36 yearly, is indeed a financial and socio-economic benefit to the rakyat.

The B40 and lower M40 as well as the self-employed and independent contractors such as the gig delivery riders will benefit from this initiative as many wouldn’t be able to enjoy health insurance coverage due to lack of financial resources or aren’t covered by their employer.

Country’s current insurance and takaful penetration rate of 56.1 per cent compared to 100 per cent in developed countries was a worryingly unsatisfactory rate.

Both insurance scheme are provided by Allianz General Insurance Bhd, Etiqa General Insurance Bhd, and Etiqa General Takaful Bhd.

Scammer Sentenced To 1,155 Years In Jail

A major investment scammer and his accomplices are facing a significant legal consequence for their involvement in an investment scam that took place between 2020 and 2021 which caused the damage of over 1 billion baht. The court has sentenced them to an astounding 1,155 years in prison and imposed a hefty fine of 145 million baht.

Between November 23 of 2020 and April 19 of 2021, Prasit Jiaokok and nine members of his team lured victims into investing in his buying and selling business. Prasit advertised that his business bought and sold designer goods from high-end brands like Louis Vuitton, Chanel, Hermes, and Gucci.

The scam revolved around the deceptive promise of extravagant returns on investments ranging from 40.15% to 51.1% annually. Prasit promised that the investor would receive a lavish return of 40.15%-51.1% annually.

However, the advertised return rates far exceeded the legally established annual interest rate of 3.25% set by financial institutions. As a result, many fell victim to this deceitful scheme.

Prasit and the other nine members were arrested last year.

On December 22 of last year, Prasit attempted to escape from imprisonment at Bangkok Criminal Court. With the help of corrupt authorities, he managed to change his prison attire in the bathroom, free himself from handcuffs, and don a fake moustache before fleeing the court premises. Despite his efforts, Prasit’s mission proved unsuccessful.

Prasit and the other two suspects were imprisoned until the trial proceedings took place at the Criminal Court on Ratchadaphisek Road in Bangkok, yesterday around 9.40am. The court concluded that Prasit and the other two suspects are guilty under Sections 341 and 342 of the Criminal Law, Section 4 of the Act of Borrowing Money that Defrauds the Public, and Section 14(1) combined with Section 83 of the Computer Crime Act Section.

However, the lawsuit against the other six suspects was dismissed but they remained in prison until the re-examination.