In this blog, you’ll learn about digital adoption across the insurance sector in Asia, strategies that’ll help in long-term operational scenarios for distributors and agents, and the importance of utilizing digital solutions for reinsurers, recruitment, onboarding and mentoring, now more than ever.
Business models have been evolving, using innovative technology, improving processes to ensure business continuity and better customer experience across sectors. Remote processes and activities are the new normal for businesses. It’s a sign for things to come, non-reversible, in a good way. People are having five years of work on innovation crammed into eight weeks. Not only are companies trying to digitize business, they’re trying to keep up with competition because the battle is no longer just face-to-face – it’s now cyberspace. Customers prefer digital self-service – they expect low friction usage experience. The mount of cyber activity and transactional data leaves a bunch of digital trails, we’re keen on extracting the right value from it.” – James Tan, Board Director – HSBC Life (Singapore)
Customer expectations have shifted to a multi-channel world, challenging insurers to provide channel options and choice across the entire value chain. While COVID-19 has proved that digital synergies are critical to ensure business continuity, we cannot afford to confuse transactions with relationship building.
In the last few months, customers’ mindsets have completely changed. It’s not sufficient just collecting the data because even with dialogue, the impact with the customer needs to be completely digitized. Analytics needs to be aligned with business priorities. Surprisingly, only 30% of the companies are doing so (McKinsey). So there’s still a lot of room to move on that front.
How can an advisor or salesperson create trust if he’s never really interacted with customers or partners physically? How can we make that into a digital solution these days?
In a poll we conducted among our insurance and finance experts, the biggest issue is incomplete and incorrect data. About 60% voted that outdated data is their biggest concern, making analytics a roadblock in conversations and conversions.
Data growth has been exponential in the past 10 years. Insurers are limited with their digital capabilities, and people have a general mistrust in AI, right? Take Netflix, for example. Whatever their AI recommends is what we mostly go with, and we’re okay with that. For insurance, on the other hand, providing long-term product recommendations through AI can get a bit dodgy.
One of the biggest challenges is integrating new tech and essential data analytics tools with existing legacy systems to ensure smooth and safe transfer of data between previously siloed departments and business systems.
Digital technologies open up new avenues of customer engagement and serviceability, not to mention policyholder retention, loyalty, and cross-sell/up-sell business growth for insurers. 68% of insurance buyers want to conduct transactions online. Yet, today, less than 50% of insurers are able to digitally provide a product or service quote; fewer than 35% can process a transaction or sale digitally; and only 23% incorporate digital into the claims process.
“Just yesterday I was conducting a training session on AI to a group of executives in financial services, and how AI is transforming the way we do business. Take chatbots for example, why are some of the bots out there not doing what they’re supposed to do, and how are the others doing so much better?
It boils down to understanding what the AI actually is. Unlike a software where you load the latest 5.0 version, AI requires rigorous training to fine tune it, which is where we rely on data scientists. Here it’s about buying a long-term insurance product. We measure accuracy rates by percentages, and we were able to increase our chatbot accuracy from 80% to about 95%, of course not perfect. It’s also about gauging that consumers’ needs, and being able to create that experience, the AI is not the customer.” – James Tan, Board Director – HSBC Life (Singapore)
Here are Michael’s insights on how companies go about building and developing AI systems
To achieve digital transformation and align to the changing expectations of customers, partners, and markets, the industry needs to transform from a traditional, product-centric mindset to a customer-centric mindset enabled by relevant digital technologies and the power of data and analytics.
The digital mission of ‘contextual and value-centric insurance’ is creating simple, transparent and unique experiences rooted in the principles of proactive risk management and secure, seamless and contextual engagements across the customer journey. Four aspects you could be looking at:
- Omnichannel Experience Engagement enabling frictionless communication through the customers’ channel of choice
- Usage and Value Oriented Offerings through usage-based insurance products powered by tech, and offerings in partnership with need-based industries. The idea is meeting customer needs to gauge true value for the premiums paid as well as sustaining retention and brand loyalty./li>
- Speed, Scalability and Agility addressing digital replacement for core functionalities such as underwriting, infrastructure systems, claims, automating operations and more./li>
- Building Cognitive Competencies by leveraging internal and external data to create a unified view of customers, partners or agents, and to mitigate risks in a digital world
Here’s a recording of the entire session:
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