Risk and rewards

Heavy weather?

The insurtech industry is prepared for change

Risksandrewards

The ITC Asia Virtual Summit was a precursor to the region’s largest live insurtech event to be held later in 2022. Here are some of the key themes to emerge from it…

The Asian insurance industry is teeming with digital life. From blockchain-based claims processing to satellite verification software, the global east has set a lucrative precedent for the rest of the world to follow its experimental lead.

More than $20billion was invested into insurtech in the Asia Pacific in the five years before the pandemic hit, according to a report from Standard Chartered Bank, which observed that global insurers are ‘engaged in a race to attract market share by embracing digital solutions to drive efficient distribution, and create an excellent customer experience’. It predicted that market expansion in Asia Pacific will play a major role in driving the global industry’s growth over the next decade, not least because China alone is the second biggest insurance market in the world. Other notable hotspots in this region include the Indian life insurance market, which is expected to see a compound annual growth rate of 10.1 per cent by 2027, attributed to the growing adoption of technology. in the life sector, according to the OECD (Organisation for Economic Cooperation and Development). But bounceback has been strong, with Swiss Re now predicting above-trend GWP growth of 3.3 per cent in 2022, and the industry expected to break through the $7trillion total premium ceiling by mid-year.

Natarajan stressed that internal relationships within insurance companies need to change if new technologies are to work effectively to deliver this growth.

“There needs to be a commitment on every level of the organisation, from the ground up,” she said. “That is becoming easier because the people at the working level are looking around and seeing the changes that are happening.”

A Swiss Re COVID-19 consumer survey in Asia Pacific in 2021, found that almost two-thirds of customers were still concerned about their health. Nearly half felt that they needed more medical insurance and a third believed they were under-insured for potential income loss resulting from disease, long-term disability or death of a main household breadwinner.

The 2022 InsureTech Connect Asia Virtual Summit saw industry leaders from sectors including property and casualty (P&C), commercial, life and health (L&H) and reinsurance come together to discuss what makes this region particularly ripe for opportunity. These were some of the key takeaways.

COVID is the biggest catalyst for change, particularly in L&H insurance

Tech topics at the Summit ranged from back-office automation to online customer preferences. But you couldn’t get away from the impact that the events of 2020 had on the industry.

“What short-circuited sales cycles for the life insurance industry was COVID, it wasn’t any particular technology,” said Kalai Natarajan, general manager of digital solutions and marketing at Dai-ichi Life Asia Pacific.

In the panel discussion ‘How Are Insurtechs And Digital Insurers Changing The Way Insurance Is Done?’, Natarajan described the many ways in which COVID changed working practices and products, including remote selling and delivery of enhanced underwriting solutions, bitesize or usage-based insurance, telemedicine and home-based services.

During the first 12 months of the pandemic, industry growth stalled worldwide, with insurance companies appearing to experience a slowdown in gross written premiums (GWP), especially

A shift in focus towards younger customers is driving change

Standard Chartered Bank’s report also found that insurers in Asia Pacific are adapting to a much younger customer base for L&H insurance, where they are focussing more on preventative healthcare and offering rewards, using gamification and wellness advice to personalise products.

Vincent Shi, head of Greater China and And yet, Chirag Jindal, the head of SEA at global insurance consultancy insurance, Americas, at ServiceNow, in his ReMark, explained the importance of presentation ‘Improving Loss Ratios And insurers offering wellness advice in a way The Claims Experience‘, acknowledged that: that ‘the value and benefit of the insurance “When we spoke to our carriers, everyone product become more tangible’ to young agreed that we don't have a unified system people. During a panel called ‘Innovating that tracks the end-to-end journey. And, Customer Experiences For The Post-Covid when we think about interaction, front-end Digital Generation‘, Shi observed that engagement can be quick and easy only if customers who are engaged with their it’s tied with the back office.” physical fitness today are more likely In its recent whitepaper, Automating The to be conscious of the need to safeguard Back Office – A Smart Guide For Insurance their future health – and, therefore, are Companies, Blue Prism highlighted more more inclined to favour coverage. accurate results and less bias as among the

But Max Tiong, vice key benefits of automating president of digital Blockchain back-office operations, transformation office at the NTUC Income insurance co-operative, is a technology that while a Deloitte survey found that the adoption of robotic process automation stressed that delivering is unavoidable (RPA) increased accuracy the hyper-personalisation demanded by younger customers, required better and inevitable for all of us by 90 per cent, productivity by 86 per cent, and cut costs by 59 per cent. connectivity across all Edmund Situmorang, The Blue Prism financial services. Prodigi whitepaper suggested

“We have to connect our some of the biggest agents, our digital channels, our stores, automation gains could be found in [so] all of these give the same level onboarding process, document processing of experience in personalisation to the and verification – mirroring, in fact, same customer,” he said. much of online consumers’ experience

Echoing Tiong’s thoughts, Tobias Puhse, elsewhere, said Jindal. VP and head of innovation and customer “Your customers and distributors are solutions, Asia Pacific, at Mastercard, used to the Uber, the DoorDash, the Venmo said: “When you go to a website, if you’re a of the world, and they are demanding that returning customer it will suggest products experience from insurance carriers, too, for you, different types of offers and especially their claims organisation.” rewards that you wouldn’t experience if you walked into an NTUC or grocery store.” Distributed ledger technologies could vastly accelerate Data analytics is key to automation touchless claims processing

With the number of data points – from medical records to driving history – collected by insurance companies, automated front- and back-office claims processing should be a given.

Reuters has highlighted the region’s exceptional use of data analytics to offer more personalised, on-demand, contextual insurance through companies like Bajaj Finserv, which recently launched an app with frictionless access to insurance products, including a subscription-based wallet and COVID cover.

And implementing automated solutions with AI and ML in the end-to-end claims process would not only cut down the time it takes to process a claim, but also reduce the cost and free up staff to deploy elsewhere. Advocates of distributed ledger – or blockchain – technologies (DLTs) believe their implementation can remedy crucial issues currently plaguing insurers, specifically when it comes to cost reduction and administration. That was the message from a discussion around ‘Delivering Smart Contracts Through Intelligent Information Management‘.

For any DLT virgins, Dom Braun, CEO of Lykke Business, explained: “Smart contracts are nothing but a computer program or a code, which reflects, for example, an insurance term agreed by counterparties, between an insurer and a client. An event will trigger at the end of the day, and automate the execution of the smart contract, according to the terms set out in the agreement, with immediate settlement or payout.” The agreements are stored in an encrypted blockchain.

Employing DLT in claims processing is probably the use case with most potential, because all the counterparties involved in a claim would have real-time access to a blockchain ledger, relieving insurers of their traditional time- and cost-heavy role of intermediary. A new report by Juniper Research, Blockchain In Financial Services: Key Opportunities, Vendor Strategies & Market Forecasts 2021-2030, expects adoption of blockchain-based insurance claims to result in more than $10billion in savings globally by 2024. But these self-executing programmes could also be used in other scenarios, including underwriting, issuance and verification.

Edmund Situmorang, CTO of Indonesian digital broker Prodigi, said it had been convinced of the value of DLTs in the area of personal data handling.

“The three-dimensional work of blockchain has helped us to understand that there is no other way of doing security in terms of keeping integrity of data,” he sais. “Blockchain is a technology that is unavoidable and inevitable for all of us. It is something we should all be looking into.”

InsureTech Connect Asia 2022

is the region’s largest insurtech event, offering access to the largest and most comprehensive gathering of tech entrepreneurs, investors, and insurance industry executives from across the APAC region. ITC Asia will be held from 7 – 9 June 2022 at Suntec Singapore Convention & Exhibition Centre. Get 20 per cent off current prices when you use the promo code: FF20.

Register now to secure your spot. For more information, visit https://

asia.insuretechconnect.com