Insurance Asia (November 2019)

Issue No. 13

Display to 30 April 2020

Insurance Asia

ZHONGAN’S VISION BEYOND INSURANCE THE ONLINE-ONLY INSURER IS POSITIONING ITSELF AS A TECH FIRM

HOW TO BOOST AGENT PRODUCTIVITY THE TIES THAT BIND BANKS AND INSURERS HOW NEW ENTRANTS CRACKED SINGAPORE INDIAN INSURANCE POWERS UP

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Life Insurance

What keeps you up at night?

FROM THE EDITOR PUBLISHER & EDITOR-IN-CHIEF Tim Charlton

In this issue, we celebrate the achievements of over 50 exceptional insurance companies at the fourth Insurance Asia Awards. Held at Shangri-La Singapore and graced by nearly 120 senior executives, the awards programme shone the spotlight on innovative product and service offerings rolled out by companies as part of a relentless effort to manage risk and protect lives.

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This edition also bears an interview with David Woo and Robert Schiff of McKinsey, who explore how life insurers can boost the productivity of the agency channel, a topic that hits hard in China which is home to over eight million agents. Despite the promise offered by digital tools, adoption rates remain dismal as agents shun tools which they perceive as a way for the management to track their activities. Find out more on page 16.

ZhongAn Online’s Young Yang gives an insider insight into the strategy that helped cement the online-only insurer’s market-leading position in China. Two years since it raised $1.5b in the world’s first insurtech listing, ZhongAn is looking ahead by positioning itself as a tech company that enables businesses to achieve the same level of digital maturity. Hear more from him at page 14.

This issue also brings you an analysis piece on the growth prospects of Asian life and non-life insurance and outlook for the year ahead.

As always, enjoy the read!

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CONTENTS

INTERVIEW

14

18

ZHONGAN BRINGS LESSONS OF DIGITAL DOMINANCE FROM CHINA TO THE REGION

COVER STORY HERE ARE THE WINNERS OF THE INSURANCE ASIA AWARDS 2019

INTERVIEW

16

HOW CHINA CAN BOOST PRODUCTIVITY FOR ITS EIGHTMILLION-STRONG SALESFORCE

ANALYSIS 12 Insurers pivot East as emerging markets play catch-up and China FIRST

fuels gains

FOREIGN INSURERS ARE GROWING RAPIDLY 10 WHY AND INSURERS PLAY WITH FIRE 11 BANKS

Published bi-annually on the second week of the month by Charlton Media Group 101 Cecil St. #17-09 Tong Eng Building 8 INSURANCE SingaporeASIA 069533

For the online versions of the insurance stories, visit the website

insuranceasia.com

FIRST home insurance,” analyst Anastassia Evlanova said in the report. “On the other hand, Direct Asia tends to focus on offering benefits that are not typically seen with other insurers, such as unique travel or medical benefits.”

“Singapore’s insurance industry shows a very different situation: small, new entrants tend to provide the lowest premiums to consumers.

Because price is the most typically utilised differentiation factor, these companies have been able to capture market share quite quickly,” Evlanova added.

RETAIL POWERS UP INSURANCE SECTOR INDIA

Non-life segment may grow 18%.

India’s insurance sector shows promising growth prospects, particularly in the retail market, as the government’s efforts to create awareness on insurance seems to have paid off. In FY2018, gross written premiums hit $94.48b, with life insurance accounting for $71.1b and non-life insurance representing $23.38b, data from Willis Tower Watson show. Penetration levels also improved slightly to 3.69% in 2017 from 2.71% in 2001, which the report attributes to product innovation, efficient distribution channels and targeted communication campaign.

In 2018, the government introduced legislative and policy changes around usage of Aadhaar for KYC purposes, the rollout of the Mental Healthcare Act and judicial pronouncements on motor insurance in an effort to support the industry.

The non-life insurance market, in particular, tipped to grow between 17-18% over the next 12 months. In 2007-2018, total premiums from the non-life sector grew at a compound annual growth rate of 17.5% partially as a result of private sector players entering the fray, according to CARE Ratings, indicating a sizeable market potential.

To stay competitive against emerging risks, insurance companies will continue to tap on innovative technologies to respond to the differentiated needs of their market.

“We will see more insurance companies applying predictive analytics in new ways to foster a broader, more forward-looking view of risk and the entire customer journey,” Rohit Jain, Head of Corporate Risk and Broking, India at Willis Tower Watson said in a report.

The advent of on-demand insurance, micro-insurance platforms, longtenure products, bite-sized insurance products and a digitally led support system demonstrates the visible impact of insurtech in 2018, setting the stage for greater adoption.

10 INSURANCE ASIA

Economies of scale Part of the reason why Singapore has seen a number of new entrants successfully crack the market is due to its relatively small domestic market that enables newcomers to grow unlike the US where older and larger companies dominate the local FWD’s market share in the motor segment surged 2,704%. landscape through low-cost offerings and still turn a profit by spreading out fixed costs over their customer base.

For instance, the top 10 non-life insurance players in the US control 47% of the market. Geico, which SINGAPORE commands 13% of the auto insurance New and foreign market, offers the second cheapest ew entrants in Singapore’s entrants enjoy insurance market have premiums, 30% below the nation’s the luxury of succeeded alongside big average. This dynamic is also evident players as they bank on low premiums entering a in South Korea where the biggest market with to rapidly grow their market share, insurers offer the lowest premiums, low prices according to a report from research which make it more challenging for and stomach firm ValueChampion. new companies to compete. consequent For instance, FWD and Budget “Economies of scale are not nearly as Direct are two companies that entered losses due to difficult to achieve in a smaller market their larger the local insurance market in 2016. as they would be in markets like the operations With motor premiums that are US where major players companies are elsewhere.

30-40% cheaper than average, the already massive,” Evalanova noted. new players were able to grow their In Singapore, new and foreign market share in the motor insurance entrants enjoy the luxury of entering segment by an unprecedented 2,704% a market with low prices and stomach and 7,400% respectively, data from the consequent losses due to their ValueChampion show. larger operations elsewhere. Although Both FWD and Budget Direct saw FWD is relatively new to Singapore, gross premium growth rates of 123% the insurer has over US$30b in assets YoY in 2018. On the other hand, the with operations in six other countries. gross premiums of established players Direct Asia and Budget Direct are like NTUC Income and AIG Asia both owned by larger overseas Pacific only increased by single digits conglomerates, making it easier for of 1% and 9% respectively over the them to compete aggressively on price. same period. AXA even saw gross “In other words, having much bigger, premiums drop 5% in 2018. profitable businesses elsewhere makes “FWD is usually one of the cheapest losing money in Singapore for a few general insurers across multiple years an investment that is relatively products like travel, maid and easy to persevere through,” she said.

Why foreign insurers are growing rapidly

N

FIRST Insurers are starved for long-term investable assets, given declining investment yields and stricter portfolio rules in recent trends. Banks’ hybrid capital instruments can also help life insurers match their long-duration liabilities.

Insurers starved for capital are turning to perpetual bonds issued by banks.

The ties that bind banks, insurers

B CHINA

anks in China are forging increasingly close ties with insurers in a development that could multiply systemic risk in the country’s trillion-dollar financial services sector, according to S&P. As insurance firms scramble for profitable investment options given the lack of depth in the domestic capital markets and stringent restrictions on overseas investments, insurers are turning to bank capital instruments in addition to existing deposits and equity stakes in lenders, effectively deepening their relationship. “The result is high sectorial and obligor concentration toward financial institutions,” Eunice Tan, analyst at S&P said in a report.

“We believe the concentration risk will persist.”

Capital crunch The introduction of perpetual bond issuance amongst domestic banks will deepen the intermingling of insurers and banks seeking to meet regulatory capital requirements. At the start of this year, Bank of China Ltd. (BOC) issued the first-ever perpetual bond by a Chinese bank, which was followed by some $32.14b (RMB230b) of such instruments to have hit the market.

A further $61.9b (RMB443b) is

in the pipeline, which includes a $16.77b (RMB120b) offering from Agricultural Bank of China (ABC); $6.98b (RMB50b) each from China Merchants Bank and Ping An Bank and $5.58b (RMB40b) from China Construction Bank, China Everbright Bank and China CITIC Bank.

With higher yields than other lowrisk assets, perpetual bonds provide a new and relatively low-cost channel for banks to raise additional tier-1 capital. The bonds can also be used as collateral for accessing central bank liquidity facilities and most issues have been oversubscribed, some by more than 2x. On the other hand, insurers have been allowed to invest in the perpetual bonds and tier-2 capital bonds of commercial banks considered as having better liquidity than alternative investments following a regulatory announcement in January 2019.

“Insurers are starved for long-term investable assets, given declining investment yields and stricter portfolio rules in recent trends,” said Tan. “Banks’ hybrid capital instruments can also help life insurers match their long-duration liabilities.”

Dropping yields Net investment yields of listed Chinese insurers have dropped to

4.94% in 2018 from 5.27% in 2017, data from S&P show. Including investment gains, net investment yields have dropped more sharply from 5.49% in 2017 to 4.32% in 2018.

Rising risks therefore characterise this deepening relationship especially when examined against a backdrop of concentrated holdings in financial sector assets via direct equity and capital instruments. With banks holding each others’ capital instruments, cross-holding structures may raise systemic risks, including the exposure of insurers to banks.

Rising risks Holders of hybrid capital may also face equity-conversion or write-down risk and are low priority in addition to the obligation to hold or add to bank holdings in the event of a crisis, given the government-owned nature of most banks and major insurers and their responsibility to economic stability. “Increased credit to private, small and mid-sized enterprises could turn out to be a successful economic policy; however, it comes with risks for banks given the susceptibility of the sector to economic downturns.

Insurers, in turn, would be exposed to those risks, given their outsized holdings,” Tan explained.

Fan brought to mind a similar concentration risk that took place in Japan when insurers were left reeling from heavy losses on their investments in the bank sector after the failure of Resona Bank and other stressors during that period. “We believe the bank-insurer relationship is one of mutual benefit. In the event of a bank failure or crisis, however, systemic risks would multiply.”

Investment mix of Chinese insurers

Source: S&P Global Ratings

INSURANCE ASIA

11

ANALYSIS: LIFE INSURANCE

Insurers pivot East as emerging markets play catch-up and China fuels gains The emerging market share of global premiums has increased, up 4.5ppt to 21.3% in 2018.

T

he shift in global insurance to Asia remains ongoing.

Premium growth smoothed using 7-year averages, revealing that the trends of previous years continue to impact the global insurance industry today. In advanced markets, non-life premium growth continues to closely track the macroeconomic growth trajectory. Life sector premium growth, meanwhile, lags. Interest rates will remain low for the foreseeable future, meaning traditional life savings products with guaranteed interest rates will remain unattractive under current regulatory settings. This can, however, change when interest rates begin to rise, regulation is adapted and insurers introduce innovative savings products that have greater appeal to customers. In the emerging markets, insurance premiums continue to outperform economic growth overall.

We believe that life premium growth in China will rebound this year and next (average growth of around 11% during 2019/20), and that the non-life market will slow alongside moderation in economy growth (+9% during 2019/20, down from +12% in 2018). However, premium growth in both life and non-life will significantly outpace the overall economy, and insurance penetration will continue to increase. Recovery in other emerging economies in Latin America, the Middle East and Africa will strengthen the respective insurance markets. At the same time,markets among themassive advanced markets, the decline Emerging have catch-up potential. of traditional savings business will limit growth in life insurance, and the moderating economic environment will 12 INSURANCE ASIA

Currently, the Chinese market is still less than 40% the size of the US market but is on track to surpass the US as the largest insurance market in the world by the mid-2030s.

cap both life and non-life sector growth. This will reinforce the ongoing overall shift from advanced to emerging insurance markets, particularly in Asia.

China’s share of the global insurance market went from 0% in 1980 to 11% in 2018, and is forecast to reach 20% in 10 years’ time, almost as high as the share projected for the whole of advanced EMEA. We forecast that the insurance markets in all of Asia-Pacific will count for 42% of the global premiums by 2029. China consolidated its position as the second largest insurance market globally in 2018, with total premiums written of USD 575 billion in 2018.

Currently, the Chinese market is still less than 40% the size of the US market (USD 1469 billion) and is also smaller than the three largest markets in Europe combined (the UK, Germany, France: USD 836 billion). According to our forecasts, the Chinese insurance market will be bigger than the three named markets by 2022, and it is on track to surpass the US as the largest insurance market in the world by the mid-2030s.

Over the past five years, the emerging market share of global premiums has increased, rising by 4.5 ppt to 21.3% in 2018. This is well below the share of emerging markets in global GDP (up 0.8 ppt to 40.8% over the same period).

The much lower share in insurance relative to share of global output gives an indication of the extent of insurance catch-up potential in the emerging markets. It also indicates that low income countries spend a smaller share of their GDP on insurance than high income ones. The

ANALYSIS: LIFE INSURANCE accident lines. In Australia, the decline in compulsory third party (CTP) motor premiums is expected to be less of a drag. Singapore and Taiwan are looking ahead, releasing a Transformation Map and master plan for the re/insurance industry based on InsurTech. Hong Kong is positioning itself as the risk management hub for Belt & Road projects.

Life and non-life premium growth vs GDP growth

Source: Swiss Re

increase in the global market share of emerging markets in insurance has been mainly due to China’s strong growth. Key markets in Latin America, Africa and emerging Europe have struggled in recent years. However, over the coming years we expect premium growth among the other emerging markets to grow faster, alongside moderation in advanced markets.

Advanced Asia-Pacific Life Life insurance premiums in advanced Asia-Pacific increased by 1.4% in 2018, after shrinking by on average 2.9% in the preceding two years. However, in South Korea and Australia, premiums contracted by around 6% in 2018. In Australia, continued low interest rates and allegations of mis-selling weighed. In Japan, we estimate that premium growth turned positive but was constrained by lower rates after the adoption of new mortality tables. Premium growth in Taiwan and Singapore slowed, with sales of Central Provident Fund schemes (CPF) dropping due to changes in agent fees.

In Japan, given tax changes related to Corporate-Owned Life Insurance (COLI) products, insurers have temporarily paused their sales of COLI products, which could weigh on market growth this year. And in Australia, growth could be impacted by the Royal Commissions report resulting in higher regulatory costs and more cautious sales practices.

In Taiwan, newly-introduced group annuity products could boost life premiums. Overall, growth in 2019 and 2020 will continue, with demand drivers like rising affluence and an ageing population still in place. We expect profitability to remain subdued as interest rates remain low.

Non-life In 2018, non-life premiums in advanced Asia-Pacific grew by 1.2%, having declined by 2% in 2017. The improvement was driven mainly by less severe contraction in Japan, where the premium decline slowed to 0.3% from almost 8.6% in 2017.

This was on account of the largest insurers having reduced motor rates by up to 5% since the beginning of 2017. The profitability of Japanese non-life insurers is expected to have declined significantly, with the three largest Japanese non-life insurers reported to have incurred record insurance payouts in the fiscal year 2018 due to natural catastrophe losses.

Premium growth in the other markets was robust, ranging from around 2% in South Korea and Australia, to 6% in Singapore. In Australia, strong rate increases in commercial lines lent support.

The outlook in advanced Asia-Pacific is positive. We expect premiums in Japan to rise modestly in 2019, after upward adjustments to official GIRO rates in property and personal

Other emerging Asia Life We estimate that life premiums in emerging Asia (excluding China) increased by 7% in 2018 (2017: +5.8%).

Premiums in Vietnam surged 28%, up from a low base and supported by strong promotion through the agency and bancassurance channels. India, the Philippines and Malaysia also reported stable premium growth of around 6‒8%. In Thailand and Indonesia, weaker equity markets weighed on performance. We expect life premiums will maintain strong growth momentum of around 6‒7% Insurance in each of the next two years. We expect that insurance demand in demand in emerging Asia will shift more towards emerging protection-type products, as low interest rates and volatile Asia will shift risky asset prices continue to undermine the attractiveness more towards of investment products. At the same time, government protection-type promotion (eg, in India, Indonesia and Vietnam) of products as financial inclusive schemes will help insurers gain access to new customer segments. low interest rates and volatile risky asset prices continue to undermine the attractiveness of investment products.

Non-life Non-life premium growth improved to 11% in 2018 from 8.1% a year earlier. This was based on recoveries in Indonesia and Malaysia, and sustained strong growth in India and Vietnam. In India, agriculture insurance continued to be a major growth driver with double-digit increases. In Malaysia, poorer performance in MTPL due to de-tariffication had pushed up the loss ratio in 2017, but there was a slight improvement in 2018. In Indonesia, on the other hand, sector profitability improved due to a lower claims burden than in 2017.

We forecast that non-life premiums in emerging Asia will grow by around 9% annually in 2019/20, supported by ongoing urbanisation and a pipeline of large infrastructure projects. Agriculture, liability and health insurance lines are expected to outperform. Liability insurance, which currently has a low penetration rate, is showing signs of faster growth on increasing demand for product liability/ recall and professional liability covers (eg, D&O and E&O). Meanwhile, the introduction of universal healthcare schemes in India and Indonesia will offer opportunities to private insurers in the medical segment. From World Insurance: The Great Pivot East Continues by Swiss Re Institute

Market share for total direct premiums written by region

Source: Swiss Re

INSURANCE ASIA

13

INTERVIEW

ZhongAn brings lessons of digital dominance from China to the region The company is hoping to enable businesses to achieve the same level of digital maturity by offering its solutions.

C

hina’s first online-only insurer ZhongAn Online P&C is leveraging its accumulated technological expertise that helped cement its market-leading position in the world’s second largest insurance market as it sets its sights on Southeast Asia. With the powerful backing of Alibaba, Tencent and Ping An and the support of over 300 internet partners, ZhongAn has grown at a breakneck pace in the past six years which it attributes to an understanding of the unique protection needs of a generation used to speed, effectively setting the pace for other tech businesses. “One challenge and requirement of being in the digital insurance business is how quickly we can respond, design, operate and continue to entertain our end customers. The speed to market and speed to response is tremendously different from traditional insurance companies - we need to come up with new ideas, products, and complete integration with online different channels every day,” said Young Yang, General Manager of ZA Tech Global, the tech arm of ZhongAn for international market.

After obtaining an online insurance license in October 2013, ZhongAn now operates within five major ecosystems that include lifestyle consumption, travel, health, consumer finance and auto. In 2017, the company went public and raised $1.5b in the world’s first insurtech listing. Since then, the company has made decent headway as it commands 0.95% of China’s non-life insurance market in 2018, up from 0.37% in 2016. Gross written premiums hit CNY11.22b ($1.59b) which rank it as the country’s 12th largest non-life insurer.

In an interview, Yang shares milestones in the insurer’s journey and path forward by helping other digital businesses achieve the same level of growth.

ZhongAn is known to offer customised offerings that zero in on a specific customer pain point. Can you walk us through the list of products that you provide?

We started with the lifestyle consumption ecosystem, with Alibaba and a number of other e-commerce platforms.

One of the first products we designed is shipment return protection. Five or six years back, online purchasing was just emerging, but consumers were facing potential risk.

Without trying the product, the good they purchased online might need to be returned or exchanged, and the shipment cost is quite a burden and often causes disputes.

In response, we launched a shipment return protection that covers the cost with dynamic premium, and eased the tension between merchants and buyers.

Another product that we are quite proud of is the flight delay protection product that we launched to the market four years ago. Working together with online travel agencies, airports and airline companies, we designed a product that automates the whole customer journey from underwriting to claim payout and connects with 14 INSURANCE ASIA

One challenge and requirement of being in the digital insurance business is how quickly we can respond, design, operate and continue to entertain our end customers.

The speed to market and speed to response is tremendously different from traditional insurance companies.

Young Yang

third-party APIs to extract real-time data of weather, airport traffic and flight departure and arrival. The system can trigger the claim process and make the payment to consumers’ e-wallet account within minutes. Over the past three years, our focus has expanded to health where we introduced the first one-million coverage medical product.

With Ping An, we introduced the first-ever co-insured online auto insurance product—“Baobiao”, through which ZhongAn offers an online policy purchase journey, and where policyholders can leverage PingAn’s offline claim network. At the same time, we work with IoT devices, manufacturers, hospitals and clinics to provide diseasespecific products to diabetes and thyroid nodules patients.

Can you paint for us what a typical tech-enabled customer journey looks like at ZhongAn? A typical customer journey for our products is akin to browsing on internet platforms. Majority of customer data will be pre-populated so the data feeds that need to be filled in are limited. We use OCR facial recognition to make sure that the customer matches what is in their documents. The underwriting will be highly automatic where more than 90% of underwriting is seamless and can be finished within seconds. Right away, they can receive a digital policy and a paper policy can be sent to their address upon request.

After they receive the policy, customers might consider submitting policy changes. For bigger ticket size policies like health policies, the customer might need to file some changes - all of which can be done online. The key part is claims which, for us, is a step that brings different brand image and value to customers. When filing a claim, we ask the customers to process OCR again to make sure that they are the legitimate policy holder. After obtaining consent from our customers, we can leverage not only our internal data, but data from various third-party APIs, e.g. hospitals,

INTERVIEW Top 15 largest nonlife insurers in China by gross written premiums (2018)

Source: S&P Global Ratings

clinics, TPAs, etc. The claim decision can be made within minutes and payment will be automatically paid out within several hours or at least within a day.

Another difference between digital and traditional insurers is that the launch product is only the starting point. After launching, based on real-time customer feedback and data monitoring we think of how we can iterate a better version of the product and keep it in a very competitive position in the market. In the entire value chain of insurance - from analysing, understanding pain points to providing a product, upgrading and iterating it - we leverage various technologies. This is why more than 50% of our employees are engineers. We have data scientists, UI developers, back-end developers and blockchain engineers that contribute to development.

As a purely online player that straddles the line between technology and insurance, ZhongAn has a natural advantage when it comes to cost. What are the advantages of a tech-powered business model in maximising efficiency?

I think the two biggest factors pushing up the cost of insurance are distribution costs and the risk that insurers are undertaking. Our different ecosystem partners provide different services or products to end-users which already have labels that can help us identify their specific demands, enabling us to provide them with the proper product. Based on the product they buy, we can identify customer features like if they’re single, married, working class, etc. By mapping the product properly, we hope to increase the matching rate of purchase and lower the customer acquisition cost.

As a digital insurer, we try to ensure that the price is competitive but we don’t want to be involved in a price war and just simply lower the premium altogether.

We need to make sure that we’re leveraging existing data so we can price the product properly. But equally important is providing the product through the most relevant online channel in a seamless way that customers will welcome. At the same time, the price itself needs to be dynamic which enables us to provide a competitive price to match our bottomline.

We need to make sure that we’re leveraging existing data so we can price the product properly.

But equally important is providing the product through the most relevant online channel, in a seamless way that customers will welcome.

There are three ways that we’re focusing on to bring down the overall costs: • Lower customer acquisition cost by increasing the marketing and product-customer matching efficiency by leveraging various data labels of customers. In so doing, we can significantly increase the accuracy of product recommendation to customers.

• Bring down operational cost by increasing the level of automation. Automation not only helps provide better customer experience, but also helps in bringing down the operational cost of the whole company. Since we’ve put the whole system on cloud, and self-developed the operation tools to maintain all micro services with a small-sized engineering team, we don’t need to maintain a huge call centre, customer service or claim to provide manual services, which is difficult to standardise.

• Lower down claim cost by fully leveraging data, both internally and externally, after obtaining customers’ consent. Data can help us price the premium more dynamically by considering customers’ different risk profiles. At the same time, data can also help mitigate potential risk in the claim process.

How do ZhongAn’s subsidiaries play into the company’s overall corporate strategy?

Even though ZhongAn P&C is a very young company, we have a number of affiliate companies to focus on different areas in a broader insurance value chain, and bring best services to customers. In 2016, we set up ZhongAn Tech in China to continuously invest in technology and R&D in software technologies, AI, blockchain as part of an effort to support the technology evolution of ZhongAn. At the same time, we started to offers solutions to external clients such as insurers, banks and online financial platforms.

In 2017, ZhongAn also set up a joint venture in Hong Kong named ZhongAn International as we prepared to apply for a virtual banking license in Hong Kong and we received the license in March. Under ZhongAn International, there are several other affiliate entities focused on different opportunities. In August 2018, ZA International and SoftBank Vision Fund entered into a deal to set up ZA Tech Global Limited (“ZA Tech”), the sole entity focused on technology offerings. In January 2019, we announced our joint venture with Grab specifically for the online insurance distribution businesses in Southeast Asia.

What pockets of growth is ZhongAn pursuing next?

We have a target to bring down our combined ratio below 100% in the next several years. Any initiatives or lesson that we learn by providing technologies to the industry can feed back to our main business in China. Outside of China, we don’t have the intention of being a financial institution. As regulators think about how they can motivate or grow digital businesses, we see great potential in offering the lessons and technologies that we’ve gained in China to overseas markets, like Japan, Singapore, Malaysia or Indonesia. We probably will enter the region as a pure technology player by providing our technology to financial institutions, mainly local insurers, or local internet companies, and bringing more innovative products and customer journeys to domestic customers.

Technology can play a very important role, which is why we work with Grab, Sompo and NTUC to level up the digital transformation for insurance in this region. Our major focus in overseas market will be working with internet players as well as insurance partners, to accelerate the digital evolvement for the insurance industry.

INSURANCE ASIA

15

INTERVIEW

How China can boost productivity for its eightmillion-strong salesforce Digital tools promise significant improvements to the recruitment and sales processes, according to McKinsey.

A

lthough agents constitute the most important distribution channel of China’s life insurance industry, bringing in about 50% of premium income, the country’s eight-million strong workforce is held back by low productivity, according to McKinsey.

Adoption of digital tools hover at low levels, preventing insurers from enhancing agent productivity and agents from tapping new segments.

As insurance companies come to terms with the demands of the digital era, agents will still play an important role in the delivery of complex protection products, according to David Schiff, partner at McKinsey.

“This isn’t a situation where you’re going to see a 50% reduction in the number of agents - what we’re going to see is a dramatic increase in agent productivity as insurers work to build their capabilities, upskill and professionalise their agency forces by leveraging technology and ultimately create a much greater customer experience throughout the end-to-end process,” he explained.

In an interview, David and Raymond Woo, associate partner at McKinsey, dig deep into how insurance companies can boost productivity and continue to create value in a $300m industry.

McKinsey laid out four strategic actions to boost agent productivity. Can you elaborate on these key areas?

Raymond: The first one is transforming the role of the agency manager. Right now, agent managers in China are mostly senior sales agents that spend most of their time on personal sales activities. The role of managers is very important. This is especially true in China where the sheer number of agents requires managers to help with coaching and development of junior agents, giving guidance and showing best practices in sales and advisory.

The second area is about recruiting the right profile of talents joining the force. Insurers should be strategic in identifying potential recruits with the help of data and analytics. Looking into profiles of successful agents will help insurers to understand what attributes they should be looking for and where should they be recruiting.

Shifting from a part-time capacity to a full-time career focused force is also important. It is about instilling discipline to manage agent activities and providing a path to career growth. The fourth set of action is to provide agents with digital tools to enable better customer experience and servicing.

How can insurers leverage analytics to find and retain high-quality recruits?

Raymond: Insurers should think about who are the potential recruits that they should target. With data and analytics, it will help you to identify the profiles that you should target. So instead of asking everyone to join the force, you’re a lot more targeted using analytics. Analytics 16 INSURANCE ASIA

The whole concept of using analytics for recruiting is moving from an intuition-driven recruiting to fact-driven recruiting tied to what drives the performance of successful agents and using that to fuel the David Schiff recruiting process from results might indicate that proactiveness, diligence, start to finish. confidence, and humility are common traits of successful

agents. Insurers can then design a questionnaire to assess candidates against these traits to suggest the likelihood of success in conversion and retention. Such insights allow insurers to quickly prioritise high-potential candidates and match with recruiting agents with similar behavior traits.

David: The whole concept of using analytics for recruiting is moving from an intuition-driven recruiting to fact-driven recruiting tied to what drives the performance of successful agents, and using that to fuel the recruiting process from start to finish.

How do you encourage shifting the bulk of the sales force from part-timers to full-time employees?

Raymond: Insurers needs to communicate an attractive proposition to recruit talent. After all, you don’t want to recruit ones who are not thinking about building a career in the long term. Recruiting talents who fit the desired profile is one thing. The other thing is to use tighter validation requirements to push for “full-time” behavior. For instance, insurers should establish standards to encourage agents to visit customers a certain number of times in a week and maintain a certain activity ratio in order for the company to continue employing them as an agent. In an indirect way, the insurers are sending a signal that if agents are not productive, then we may not continue the relationship.

The final one is offering a progressive compensation and development structure. You want to show these agents that if you dedicate more time into building a career, then eventually [they come to realise that] there is a path for them to grow in terms of compensation and career progression. The behavior that insurers expect of agents in different stages of their career would be helpful for the

INTERVIEW complicated, protection-type products. By encouraging and enabling agents to sell more protection products, it will eventually have an impact on profitability.

David: The focus on productivity is driven in part as significant capacity becomes quite critical for carriers that want to continue to grow. There is a profitability element as you can keep a similar number of agents and decrease overall recruitment and training costs, because you increase the productivity and longevity by keeping higher performing agents longer.

The other piece is around customer experience. As you’re able to foster a better performing agent and enhance customer experience through increased productivity and better tools, there’s a huge amount of knock-on or flow in terms of cost reductions, productivity increases in customer and agent experience improvements.

Raymond Woo

agents to envision – like this is the future that I aspire to and the stuff that I should do to realize the vision.

David: This isn’t something that will happen overnight.

It’s going to be a journey. We do think it’s important to have different tracks, support structures in place and compensation models to empower productive agents to do even more and better meet customer needs.

Agents are urged to maximise the use of digital tools but McKinsey notes that digital adoption rates are low.

How can companies boost adoption of such platforms?

Raymond: For most places, these tools are efficient as a management tool. Companies encourage agents to plug into digital tools because managers want to track agent performance like how many customer visits they’re doing weekly and how they’re interacting with the customer.

But agents, especially the more senior ones, do not like it because they don’t want to expose what they do to the insurer, which is one of the major reasons why adoption is very low today.

Insurers should think about digital tools as something that will help the agents improve sales and also their interactions with customers. A couple of areas where that will be helpful would be in helping them find leads or manage customer information. For example, analytics might reveal that there are these five customers that you should contact first and give them more information about how they should manage the customers.

Streamlining the sales process would be another good use of digital tools. Selling a more complicated product usually requires more information exchange with the customers and having a good platform that would allow smoother interactions. As a result, the processing time is also shorter. We encourage insurers to position digital tools as a way to help agents improve productivity instead of a management tool to track activity.

Beyond productivity gains, how else can insurers benefit from improving their life agency channels?

Raymond: There is a value creation angle because human interaction or face-to-face sales is a way to introduce more

There is a value-creation angle because interaction or face-to-face sales is a way to introduce more complicated, protection-type products. By encouraging and enabling agents to sell more protection products, it will eventually have an impact on profitability.

China has borne witness to business models that straddle the lines between technology and insurance.

What lessons can incumbent insurers take away from tech titans like ZhongAn and Ping An? Raymond: Ping An agency contributes about 70% of the new business premiums in 2018. Ping An is not going for an agent-lite model as it spends a lot of effort in developing the agency channel and using technology to to improve agent productivity. In China, I don’t see a pure digital end-to-end sales of life insurance and for the years to come as well. It’s still going to be a human faceto-face heavy market. Technology and digital is going to be a tremendous enabler to improve productivity and for customer acquisition like cross-selling, which you can do once you acquire customers offline.

David: In China, across Asia, and across the globe, we don’t see human agents going away for life insurance and complex products. GI is a little bit of a different story, but for life insurance, consumers are going to continue to want and need a trusted, competent, helpful agent. We believe that’s going to be a requirement for the success of life insurance carriers.

Tech giants are able to build technology solutions very well, very quickly, and have embraced an agile way of working. That’s going to be important for insurance carriers to learn from as they continue to make that transition towards tech by enabling their agency forces and providing digital solutions where relevant for consumers like self service and online portal.

The functionalities of a one-stop-shop digital platform

Source: McKinsey

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COVER STORY: INSURANCE ASIA AWARDS 2019

Here are the winners of the Insurance Asia Awards 2019

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ver 54 exceptional insurance companies from 18 countries were recognised at the fourth Insurance Asia Awards held at Shangri-La Singapore on 16 July. The celebration beat last year’s record after gathering nearly 120 senior executives from the insurance industry.

This year’s nominations were judged by Richard Holloway, Managing Director for Southeast Asia & India Life at Milliman; Frank Dubois, Head of Insurance at KPMG Singapore; Steven Goh, Head of Insurance Audit at KPMG Singapore; Woo Shea Leen, Insurance Leader at PwC Singapore; and Liza Drew, FSO Indirect Tax Leader - Asia Pacific at Ernst & Young.

“Although insurtech challengers have multiplied, let’s not forget the real work that all the big, existing companies are doing. This takes into account the rapid pace of change that insurers have to go to in order to meet changing customer expectations as well as the hardship in putting out new products to consumers which is all done to ensure that we live in a better insured world,” said Tim Charlton, publisher of Insurance Asia magazine. “Tonight is a night to celebrate and enjoy the success of a job well done over the past 12 months.”

Below is a list of all the winning companies. Congratulations!

AXA Affin General Insurance Berhad International General Insurer of the Year - Malaysia Claims Initiative of the Year - Malaysia New Insurance Product of the Year - Malaysia

AXA Financial Indonesia Insurance Initiative of the Year - Indonesia

AXA Hong Kong and Macau International General Insurer of the Year - Hong Kong

AXA Insurance Pte Ltd International Life Insurer of the Year - Singapore Digital Insurance Initiative of the Year - Singapore CSR Initiative of the Year - Singapore

AYA Myanmar Insurance Digital Insurance Initiative of the Year - Myanmar

Bajaj Allianz General Insurance Co. Ltd. Claims Initiative of the Year - India Domestic General Insurer of the Year - India

BANGKOK INSURANCE PUBLIC COMPANY LIMITED Domestic General Insurer of the Year - Thailand

Cathay Life Insurance New Insurance Product of the Year - Taiwan Insurance Initiative of the Year - Taiwan

China Life Insurance Co., Ltd. Claims Initiative of the Year - Taiwan

Chubb Life Education Insurance Initiative of the Year - Vietnam

Cigna International Markets Marketing Initiative of the Year - Hong Kong

Etiqa Insurance Pte. Ltd.

INSURANCE ASIA AWARDS 2019 WINNERS

Marketing Initiative of the Year - Singapore

Euler Hermes Asia Pacific

Adamjee Insurance Company Limited

CSR Initiative of the Year - Hong Kong

Domestic General Insurer of the Year - Pakistan

Expat Insurance Pte Ltd Part of Siaci Saint Honore Group

Aditya Birla Sun Life Insurance Co. Ltd Domestic Life Insurer of the Year - India

Domestic Broker of the Year - Singapore

Aetna International

Future Generali India Insurance Company Limited

International General Insurer of the Year - Singapore

New Insurance Product of the Year - India Insurance Initiative of the Year - India

AIA Indonesia

FWD Life Insurance Corporation

CSR Initiative of the Year - Indonesia

AIA Singapore Domestic Life Insurer of the Year - Singapore New Insurance Product of the Year - Singapore

AIG Asia Pacific Insurance Pte. Ltd. Insurance Initiative of the Year - Singapore

Al Wathba National Insurance Company Mid-Size Direct Insurer of the Year - United Arab Emirates

Allianz Taiwan Life

Marketing Initiative of the Year - Philippines

FWD Vietnam Life Insurance Company Limited New Insurance Product of the Year - Vietnam Marketing Initiative of the Year - Vietnam

GREAT EASTERN TAKAFUL BERHAD Insurance Initiative of the Year - Malaysia

Guardian Life Insurance Limited Domestic Life Insurer of the Year - Bangladesh Digital Insurance Initiative of the Year - Bangladesh

Digital Insurance Initiative of the Year - Taiwan

HDFC Life Insurance Company Limited

Aviva Ltd

Marketing Initiative of the Year - India CSR Initiative of the Year - India

Health Insurance Initiative of the Year - Singapore

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Hong Leong Assurance Berhad

TATA AIA Life Insurance Company Ltd.

Domestic Life Insurer of the Year - Malaysia

International Life Insurer of the Year - India Digital Insurance Initiative of the Year - India

Huynh Thanh Phong, FWD Group CEO of the Year

The Insular Life Assurance Company, Ltd.

IKBZ Insurance

Domestic Life Insurer of the Year - Philippines

Domestic General Insurer of the Year - Myanmar Domestic Life Insurer of the Year - Myanmar Marketing Initiative of the Year - Myanmar

J&C Services Sole Co. Ltd Domestic Broker of the Year - Laos

Transamerica Life (Bermuda) Ltd. International Life Insurer of the Year - Hong Kong

Tune Protect Group Berhad Digital Insurance Initiative of the Year - Malaysia

Krungthai-AXA Life Insurance Public Company Limited CSR Initiative of the Year - Thailand Marketing Initiative of the Year - Thailand Insurance Initiative of the Year - Thailand

Mandal Insurance JSC Domestic General Insurer of the Year - Mongolia

Manulife Philippines CSR Initiative of the Year - Philippines

MetLife Australia New Insurance Product of the Year - Australia

MSIG Insurance (Hong Kong) Limited Digital Insurance Initiative of the Year - Hong Kong

MSIG Insurance (Singapore) Pte. Ltd. Travel Insurance Initiative of the Year - Singapore

Aetna International

Nanshan Life Insurance Co., Ltd. Domestic Life Insurer of the Year - Taiwan CSR Initiative of the Year - Taiwan

Peak Reinsurance Company Limited Asian Reinsurer of the Year

Prudential Assurance Malaysia Berhad CSR Initiative of the Year - Malaysia

Prudential Vietnam Assurance Private Ltd. Digital Insurance Initiative of the Year - Vietnam International Life Insurer of the Year - Vietnam Claims Initiative of the Year - Vietnam

PT Asuransi Jiwa Sequis Life Digital Insurance Initiative of the Year - Indonesia

AIA Indonesia

QBE Hong Kong Claims Initiative of the Year - Hong Kong

Sompo Japan Insurance Turkey Digital Insurance Initiative of the Year - Turkey

Sovannaphum Life Assurance Plc. Mid-Sized Domestic Life Insurer of the Year - Cambodia Insurance Startup of the Year - Cambodia

Sun Life Malaysia Marketing Initiative of the Year - Malaysia

TAIWAN LIFE INSURANCE CO., LTD. Marketing Initiative of the Year - Taiwan

TAL Domestic Life Insurer of the Year - Australia

AIA Singapore

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COVER STORY: INSURANCE ASIA AWARDS 2019

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Aviva Ltd

AXA Financial Indonesia

AXA Insurance Pte Ltd

Cathay Life Insurance

China Life Insurance Co Ltd

Etiqa Insurance Pte. Ltd

FWD Life Insurance Corporation

FWD Vietnam Life Insurance Company Limited

GREAT EASTERN TAKAFUL BERHAD

Guardian Life Insurance Limited

Krungthai-AXA Life Insurance Public Company Ltd

IKBZ INSURANCE

MetLife Australia

MSIG Insurance (Hong Kong) Limited

Peak Reinsurance Company Limited

Prudential Vietnam Assurance Private Ltd

QBE Hong Kong

TAIWAN LIFE INSURANCE CO., LTD

The Insular Life Assurance Company, Ltd

Transamerica Life (Bermuda) Ltd

Tune Protect Group Berhad INSURANCE ASIA

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DOMESTIC LIFE INSURER OF THE YEAR – PHILIPPINES

A lifetime for good: Revitalising today, building the future For the third consecutive year, Insular Life won the “Domestic Life Insurer of the Year – Philippines” given by the Insurance Asia Awards.

dashboard where agents are able to receive leads and analyse the financial needs of customers to help them close the sale, and the Agents Portal, which enables them to create sales proposals and presentations.

(From left to right) Nina Aguas, Executive Chairman, Insular Life; Tim Charlton, Editor in Chief, Insurance Asia; and Mona Lisa Dela Cruz, President & CEO, Insular Life

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hat makes this recognition easier, faster, and more efficient for customers. truly special is that it affirms Thus, the Automated Underwriting System the company’s headways in the (AUS) was created. To this day, InLife’s AUS last four years, as it aims to create an remains to be the only one existing in Philippine organisation that is fully attuned to the life insurance. needs of its stakeholders now, whilst The AUS also continues to evolve. Now, this laying down foundations for a business system provides a digital end-to-end experience model that transcends a lifetime. for its internal and external customers through “We are truly honoured by this the incorporation of online payments and recognition. Being e-policy named the best issuances Domestic Life in as fast as InLife Sheroes aims to provide Insurer in the 30 minutes solutions and investment Philippines by for standard the IAA confirms cases. opportunities to Filipinas by our business There were educating them on financial model as well as many other management, health and wellthe tremendous innovations being. efforts we put instituted in in to create a InLife’s 3-year lifetime for consecutive good for all our stakeholders,” said InLife run as the Philippines’ domestic life insurer.

Executive Chairman Nina D. Aguas.

One example is the creation of the customer portal, which customers can access to view A journey through purpose policy details and execute online service InLife believes that its business transactions, such as online withdrawal of serves a noble purpose: to provide its fund balances and fund switching transactions policyholders, business partners, and its for Variable-Unit Linked policies. Moreover, country, a lifetime for good. It is a bond the customer portal also processes of promise that cannot be broken, not by dividend withdrawals and policy loans for circumstances, not by time. traditional policies. This dashboard makes To ensure that it delivers on this it easy, convenient and efficient to do policy commitment, InLife instituted initiatives transactions online, 24/7. that started four years earlier. These InLife also provided its agency force powerful initiatives saw the birth of various digital portals to manage their own business: the programmes designed to make things Leads ARchiving Assistant or LARA, a digital

22 INSURANCE ASIA

No one’s left behind InLife’s journey of purpose also aims for inclusion.

In 2019, it launched the Philippines insurance industry’s first and only programme solely dedicated to enriching the lives of Filipino women.

This programme is called the InLife Sheroes movement which aims to empower one million Filipinas in its first year and increase this number as the programme progresses.

In the Philippines, women lack knowledge on proper saving, investing and risk protection, yet many of them are primary decision-makers at home. Addressing their needs means bolstering the Philippines’ growth trajectory.

This programme was created in partnership with the International Finance Corporation (IFC) of the World Bank Group.

“InLife Sheroes aims to provide risk-mitigating solutions and investment opportunities to Filipinas by educating them on financial management, and health and well-being; and providing networking access to business partners, and solutions to women-specific concerns,” said InLife President and CEO Mona Lisa B. Dela Cruz.

“Like our automated underwriting, InLife Sheroes is the first and only one in the domestic market. I think these are just some of the things that truly make InLife a standout in Asia,” added Dela Cruz.

Commitment for the good InLife’s digital transformation journey, commitment to uplifting women, constant lookout for viable distribution channels, care of its agency force whilst looking over its own people and various stakeholders, these are all meant to provide a lifetime for good.

Indeed, InLife has come a long way from its humble beginnings as a small, Philippine-born life insurance to becoming the largest Filipino life insurer today.

These dynamic transformations have imbued InLife with a sense of purpose to continue the work that it started over a century ago, and move forward, leaving no one behind.

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ASIAN REINSURER OF THE YEAR

Strengthening the financial resilience of households in emerging Asia

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even years ago, Peak Re was established in Hong Kong with the aim of supporting the needs of communities and the emerging middleclass society through meeting reinsurance needs covering life, health and non-life risks, especially in Asia. With that core mission in mind, the fourth edition of Peak Insights, its annual research paper, centres on the financial aspirations of Asia’s emerging middle class, a group of more than 1.4 billion people—as well as the vulnerabilities that could thwart those families’ plans.

Emerging middle class in Asia, which comprises low-income and lower-middle income households, is yet well protected by the social welfare and insurance whether as means to fund long-term care, retirement or protecting assets against disaster. Without adequate financial protection, households rely on emergency funds to finance any sudden need for cash. This can potentially nullifying their past efforts to accumulate wealth

Exhibit 1: Sources of emergency funds (% of adults aged 25 years and older who are able to raise funds)

carriers need to promote risk prevention and mitigation tools, facilitate access to financial protection and boost these households’ trust in financial services and insurance in particular.

Insurers may want to tie up with intermediaries which have built up product distribution and risk prevention advisory capabilities. In emerging Asia, other than brokers, community-based organisations act as important intermediaries for licensed insurers. However, some intermediaries may lack the necessary tools or knowledge to explain insurance products and manage claims. In fact, mis-selling—making misleading promises about what an insurance will fulfil—is a key threat to insurance growth. Therefore, insurers and intermediaries should consider improving the professionalism of their representatives to enhance customers’ experience and trust.

Another opportunity is the advent of technology. Insurers should consider different digital strategies for each economy as the habits of mobile phone users varies across emerging Asia. For example, in countries where subscribers tend to use their mobile phone to search for information, an informative platform about risk prevention and a reporting platform for claims would make more sense.

Cash payment, speedy claims settlement and cash-flow management key to success Emerging middle-income households may have limited access to financial services due to barriers to opening accounts set by the banking industry. Without a financial account, it is difficult to pay insurance

Source: World Bank (2017)

Need for insurance to protect emerging middle-class consumers While public schemes play a substantial role in protecting the lowest-income households, the emerging middle class is left behind, with some households no longer eligible to benefit from free public schemes. Therefore, the private sector must cater to the growing and more complex protection needs of the emerging middle class. To attract more households to purchase insurance, intermediaries and risk 24 INSURANCE ASIA

premiums and receive claims. In countries where account ownership at a financial institution or with a mobile-money-service provider is not common, cash becomes the preferred option of payment for premiums or for receiving claims.

Speed of claims payment, transparency of processes and ability to check the claims status are key to lower and lower-middle income households, which are more likely to be exposed to liquidity and cash-flow risks due to their savings methods. Shortening the claims settlement period means reducing the time for households to report claims, for risk carriers to manage claims, and for intermediaries to transfer the payment to claimants.

While claims reporting and processing can be improved, the ability of a risk carrier to settle claims is subject to their cashflow management. Risk carriers without accurate reinsurance protection and proper selection of reinsurers can encounter cash-flow issues. Reinsurance can provide greater capacity for business growth and facilitate cash-flow management for risk carriers, thereby accelerating claims settlement.

In conclusion, the insurance protection gap in emerging Asia partially reflects a lack of understanding of households’ priorities, saving methods and ability to save. Without adequate protection, a sudden need for cash would rely on households’ access to emergency funds which tends to be lower for households with the least ability to save. Fast claims settlement protects households from the deterioration of their financial safety net.

Exhibit 2: Saving methods (adults aged 25 years and older) Note: Savings club means rotating savings and credit association. Other methods are cash at home, livestock, jewellery, real estate.

Source: World Bank (2017)

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CLAIMS INITIATIVE OF THE YEAR – HONG KONG

The future of digital claims made possible by QBE Hong Kong

The insurer won the ‘Claims Initiative of the Year – Hong Kong’ for its new digital claims platform.

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cross the globe, insurance growth is shaped by digital technologies, particularly so in Asia. In today’s digital era, customer demands are constantly evolving, insurers in the region are moving towards digitalisation at a much faster pace.

So too is QBE Hong Kong, the local branch of the Australian-headquartered general and reinsurance company QBE Insurance Group. QBE Hong Kong has won the Claims Initiative of the Year – Hong Kong for its new Digital Claims platform. Claims, if handled well, can turn into a significant competitive edge.

QBE Hong Kong has taken home this year’s Claims Initiative of the Year – Hong Kong Award.

Building on the success, we are looking to Delivering outstanding claims experience extend this capability to a broader range of and operational excellence products in the future.”

Introduced in November 2018, QBE Hong Claims—especially claims payout—could Kong’s Digital Claims platform provides be the most important moment of the entire an easy-to-use, efficient and intuitive customer journey. With claims being assessed experience, allowing customers to lodge and processed digitally, QBE Hong Kong is a travel or domestic helper insurance able to accelerate validation and payment, claim on any drastically shortening the device, anytime, entire claims lifecycle by anywhere with a significant two-thirds.

Qnect has seen continued just a few clicks.

Of all the customer improvements in its “The platform functionalities and services ratings, the company is designed for received a notable 95% to meet the evolving needs positive ratings. the customers,” of the insurance industry. said Lei Yu, It is not just customer Chief Executive experience, the company Officer for North also sees immense Asia and Regional Head of Distribution, benefits to its operations. There is a built-in QBE Asia. “Guided by our customer-centric automation capability for the company to approach, we challenge ourselves to always activate straight through processing (STP) for think outside in to better understand simple claims. “The assessment automation has customers’ needs. And only through this are a dynamic design and can be moderated by our we able to create a value proposition that claims specialists to cater to seasonal surge in is truly fit for purpose for our customers. claims volume and, ultimately, to safeguard the

service standards and customer experience,” added Yu. Investing in technology for the long game The insurance industry has observed an increasing trend where both customers and intermediaries like to see more and more digital offerings. Those who embrace technological advancements and the future ways of working will be the insurance leaders tomorrow.

Throughout the years, QBE Hong Kong has been investing in Qnect, an intermediary service platform enabling end-to-end online transactions.

The platform is designed to be the one-stop shop for intermediaries. It enables a straightthrough process whereby intermediaries can generate a quote, renew an existing policy, issue a policy or email a policy document to a customer immediately—anytime, anywhere and in just a few minutes. This digital process makes insurance transactions more efficient, reduces potential errors and improves the services for intermediaries.

“Qnect has seen continued improvements in its functionalities and services to meet the evolving needs of the insurance industry,” added Yu. “We want to make it easy to navigate and offer better, faster, 24/7 services. Ultimately, it is about delivering an enhanced experience for our business partners and paving way for our shared success in the digital future.”

CONTACT

Looking ahead, QBE Hong Kong will continue to invest in digital innovations to deliver a better experience for business partners and customers.

26 INSURANCE ASIA

Company Name: QBE Hong Kong Address: 33/F, Oxford House, Taikoo Place, 979 King’s Road, Quarry Bay, Hong Kong Website: www.qbe.com/hk

We create insurance solutions for

ss le y r or w “so I can s u c o f and k is r the about � . y it n u t or pp o the on As a melting pot of cultures, industries and ideas, Hong Kong offers immense opportunities for businesses to grow and prosper. However, with opportunity comes risk. At QBE Hong Kong, we know that everyone has ambitions and goals. We give people the confidence to achieve their goals by helping them manage the related risks. We understand the complexities of working in this diverse region and we have the international experience and local knowledge to help our customers succeed. Whether it’s safeguarding your property or employees, or protecting valuable construction or marine assets, we partner with you to deliver the insurance solutions that best suit you and your business.

To make your business ambitions a reality, visit qbe.com/hk today.

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DIGITAL INSURANCE INITIATIVE OF THE YEAR - HONG KONG

MSIG Hong Kong drives customer engagement through digital experience As digital technologies evolve, customers have grown to expect new standards of excellence.

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SIG Insurance (Hong Kong) app also streamlines operations and Limited realises that digital service delivery for our customers. We innovation is key to driving are committed to continue driving digital and improving customer experience. innovation in all our products.”

Through the launch of MSIG Mobile The MSIG app combines e-commerce, App (hereinafter, “the app”), MSIG account management and loyalty aims to shift short-term contractual membership within a single digital commitments to long-term trusting platform. It also acts as a key relationships. communication hub for promotion and MSIG is proud to be named the winner interaction, providing the most optimised of Digital Insurance Initiative of the experience for customers. Offering a Year - Hong Kong at the Insurance Asia seamless policy enrolment process to Awards 2019. This prestigious accolade existing and new customers, the app was awarded in integrates social recognition of the login, mobile app for setting payment as well We at MSIG Insurance new standards as a clean user understand great design, of excellence in interface for easy MSIG Facebook Messenger Chatbot offers convenient and engaging content and digital innovation, comparison of synchronised customer experiences across multiple platforms. intuitive navigation are all key different plans. customer experience and to delivering a seamless digital Profiles for travel engagement. companions can history, policy renewal reminders and timely experience to customers.

“MSIG is even be created notifications on important announcements. honoured by to reduce the Designed for social and lifestyle integration, this latest hassle of keying in this app serves as the platform for the MSIG appreciation of our commitment to information for the customer’s next travel Member Loyalty Program. Members can redeem taking our customer-centric service insurance application. rewards by using MSIG$ earned from spending on to a new level,” said Philip G. Kent, This app also offers convenient premiums, enjoy exclusive discounts and birthday Chief Executive Officer of MSIG account management and communication offers, and benefit from a referral programme.

Hong Kong. “Apart from integrating functionality, providing customers with Reward points and e-coupons earned are both our products into one platform, this easy access to policy details and enrolment conveniently stored in an e-wallet inside the app

Left to right: Henry Hui (Chief Operating Officer), Nova Lee (SVP, Strategic Partnership & Digital Business) and Eric Yuen (Manager, Digital Solution) represented MSIG Hong Kong at the Insurance Asia Awards 2019 ceremony.

28 INSURANCE ASIA

for ease of online and in-store redemption.

Through the combination of the MSIG mobile app, the existing e-commerce website and Facebook Messenger Chatbot, MSIG now offers a convenient and secure customer experience synchronised across multiple platforms.

“The MSIG app showcases our commitment to customer-centric service and design,” said Nova Lee, Senior Vice President, Strategic Partnership & Digital Business. “We understand great design, engaging content and intuitive navigation are all key to delivering a seamless digital experience to customers. With the integrated loyalty programme, the app allows us to offer rewards that are relevant for our customers.”

Public response to the app has been very positive and encouraging. Providing customers with excellent user experiences and convenience will always be welcomed. With that in mind, MSIG is committed to continuously leverage the latest technology to refresh the app with new features.

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DIGITAL INSURANCE INITIATIVE OF THE YEAR - MALAYSIA

Making protection easy with digitisation Learn how Tune Protect Group Berhad customises protection for every individual.

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une Protect Group Berhad recently won the Digital Insurance Initiative of the Year for Malaysia. In an interview with Insurance Asia, Group Chief Executive Officer, Khoo Ai Lin, shares her thoughts and aspiration in steering the company towards becoming a leading digital insurer in the region.

What do you think was the key to winning the award?

The key to us winning the award is the on-demand factor that allows consumers to enjoy protection that is transparent, interactive, convenient and secure, suiting the varying needs of their lifestyles. The ease of ‘turning on’ insurance coverage leveraging on technology fulfils our brand promise of ‘Protection Made Easy’ and showcases our aspiration to be a leading digital insurer in the region.

Innovations are coming out from here and there. What makes yours different?

We believe that ours are different as our innovations revolutionise the way people perceive and consume insurance. Our value proposition focuses on protection befitting the different consumer lifestyles. With Sports+, the on-demand protection for extreme sports enthusiasts, a marathon runner or a bungee jumper is now able to ‘switch on’ protection for accidental death and permanent disablement, medical expenses, and sports equipment reimbursement from as short as 1 day to up to a year, right before they attempt the activities via their mobile phones. In the case of Pay-As-You-Drive (PAYD), we wish to propagate that light ‘park and ride’ drivers, ‘second car’ customer segments, and city or neighbourhood drivers should not be paying as much insurance premium as heavy drivers, hence the premium incentives of up to 20% refund on the basic premium paid at the end of the policy period. In both these instances, protection is customised to suit the lifestyles of consumers, made available at the right time, at the right place and at the right price, much like how consumers view ride-hailing and

30 INSURANCE ASIA

food delivery services today.

What direction will the company be heading towards in the coming years?

We are on a very exciting journey as we remain committed to our digitisation journey aligned to 3 strategic pillars of product innovation and differentiation; wider distribution reach; and exceptional customer experience. This commitment is further amplified with our transformational pillars, known as GAIN: 1) Go ASEAN, 2) AirAsia Ecosystem, 3) Insurtech Capabilities and 4) National Business. By focusing on each of our transformational pillars and leveraging insurtech, we are upbeat in going beyond airlines, beyond travel insurance and beyond conventional insurance. We will unlock new revenue streams from other sources of income, in addition to underwriting profits. The strategy in place will focus on partnerships within ASEAN with opportunities in retail and digital as it has a sizeable younger population, is relatively low in insurance penetration, and rapidly embracing digitisation.

Khoo Ai Lin, Chief Executive Officer, Tune Protect Group

“We believe our innovations revolutionise the way people perceive and consume insurance.”

What are your future plans to further deliver innovative and breakthrough products or services to your customers?

As one of the Group’s key transformation pillars, Tune Protect continues to invest in its insurtech capabilities through the development of digital solutions and platforms which has opened doors to new business opportunities in the region. For instance, in Indonesia via partnerships with PT Asuransi Buana Independent (ABI) and the Association of Indonesian Travel Agency (ASITA), East Java Chapter, we are able to promote our travel insurance and reach out to the retail mass through a fully digital channel (B2B). We leverage on our homegrown insurtech capabilities and very soon will be extending our B2B footprint in ASEAN.

What does it mean for you to win in the Insurance Asia Awards?

We are very proud to have won the Digital Insurance Initiative of the Year – Malaysia category at Insurance Asia Awards 2019 as it propels us further into being a leading digital insurer in the region that provides convenient on-demand lifestyle protection to consumers.

The award is a testament to all the hard work and effort demonstrated by our fellow Tune Protectors in achieving this common vision. The award is an encouragement for us to work towards delivering sustainable underwriting profit from the general insurance and reinsurance entities within the Group, as well as from new income streams in order to consistently provide healthy returns to our shareholders. The GAIN aspiration will drive us towards meeting these deliverables.

In the Asia Pacific, McKinsey estimates the value of new businesses to stand at $90b annually, with Malaysia sitting at little over $10b. Tune Protect, is looking to take advantage of the market opportunities by recreating its portfolio with a slew of unique product offerings.

INSURANCE ASIA

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Issue No. 79

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START UP SECRETS FROM GRAB, ZALORA, FUNDING SOCIETIES,SMARTKARMA, AND SPACEMOB BIKE-SHARING FIRMS GEAR UP FOR A CAR-LITE SOCIETY WILL AMAZON KILL THE RETAIL STARS? SINGAPORE BONDS: WHO’S BORROWING WHERE?

• 5 hottest areas to buy property right now • Commercial vs residential, which is better?

• Mega mergers are underway for real estate firms

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AI IS TAKING THE TEDIUM OUT OF RECRUITMENT BONDS: PANDA’S BOOM IS THE DIM SUM’S BANE WILL ALIBABA STEAL HONG KONG’S LUXURY LUSTRE? WHY BANKERS ARE ON THE MOVE TO DIGGING COINS

• Where can you find the best property buys?

• Commercial versus residential • Housing prices: Singapore versus Hong Kong

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Issue No. 89

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UNIONBANK’S KYC

BY SELFIE FEATURE FINTECHS VS BANKS: WHO’S WINNING IN FOREX? CASE STUDY: DBS’ DIGIBANK IN INDIA, INDONESIA CLOSING IN ON OPEN BANKING ISLAMIC BANKS SEEK SYNERGIES

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THE MAN BEHIND SINGAPORE’S FIRST LNG PLANT PACIFICLIGHT’S CEO YU TAT MING SHARES HOW HIS COMPANY MAINTAINS SINGAPORE’S FIRST LNG-FIRED POWER PLANT AND HOW BEING FIRST CHALLENGES HIM

MAKE WAY FOR CHINA’S MEGA MERGERS INDONESIA TIGHTENS NOOSE ON IPPs MASSIVE BLACKOUT IN TAIWAN CASTS DOUBT ON ITS NUKE-FREE VOW OUTDATED POLICIES HOLD BACK MALAYSIA’S NUCLEAR AMBITION

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ISSUE NO. 10

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RACE TO REFORM

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CHINA AND OTHER ASIAN COUNTRIES ARE SMASHING REGULATORY ROADBLOCKS TO ATTRACT HEALTHCARE INVESTMENTS

Healthcare Asia

DATO’ DR ADZUAN RAHMAN CEO, GLENEAGLES HOSPITAL KUALA LUMPUR p14

PHUA TIEN BENG, CEO MOUNT ELIZABETH HOSPITAL p16

HEALTHCARE DISSATISFACTION GUARANTEED A ROBOT A DAY KEEPS THE DOCTOR AWAY THAILAND IS PRESSURED TO REVAMP HEALTHCARE SINGAPORE TURNS TO AI FOR THE AGED

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Winning countless awards and earning your trust Top 100 in the world

Brand Finance Insurance 100

Only one awarded in Taiwan

Asia Responsible Enterprise Awards Health Promotion

Only one awarded in the insurance industry

The National Brand Yushan Award Outstanding Enterprise of the Year

Digital innovation

Asia Insurance Technology Awards Digital and Omnichannel Technologies

˙ ˙ ˙ ˙ ˙ ˙ ˙

˙ Asia Insurance Industry Awards 2018 Corporate Social Responsibility Award ˙ Asia Insurance Technology Awards Digital and Omnichannel Technologies ˙ Asia Responsible Enterprise Awards Health Promotion ˙ Brand Finance Insurance 100 2018 Placed 49th on the World’s Most Valuable Insurance Brands ˙ Global Brands Magazine Awards 2018 Best Life Insurance Brands, Taiwan ˙ Global Business Outlook Awards 2018 Fastest Growing Life Insurance Company, Taiwan ˙ Insurance Asia Awards 2018 Digital Insurance Initiative of the Year, New Insurance Product of the Year and Claims Initiative of the Year

˙ ˙ International Finance Awards 2018 Most Innovative Life Insurance Company, Taiwan ˙ ˙ The National Brand Yushan Award Outstanding Enterprise of the Year Taiwan Life Insurance Co., Ltd. www.taiwanlife.com