Insurance Asia (November 2023)

Issue No. 20

Display to 30 November 2023

Insurance Asia

PAY-AS-YOU-GO INSURANCE TAKING OFF IN ASIA TAN SEK KEE: FLASH FLOODS, LACK OF TALENT HIT MY’S INSURANCE INDUSTRY

GIA SINGAPORE’S SYSTEM DETECTS FRAUD OVERLOOKED BY INSURERS

KEY SKILLS INSURERS ARE LOOKING FOR IN NEW HIRES IN 2023

ASIAN INSURERS’ READINESS ON AI DICTATES THEIR COMPETITIVE ADVANTAGE

Tan Sek Kee CEO, Berjaya Sompo p. 16

Andrew Yeo CEO, GIA p. 19

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FROM THE EDITOR

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he insurance industry is undergoing significant transformations, especially in the digital landscape in response to the growing demand for more accessible and flexible insurance. One notable innovation is the Netflix of insurance, KoverNow, a subscription-based insurtech firm that deviates from the conventional insurance model. Find out more on page 12.

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On page 8, the collaboration between China CITIC Bank and FWD Macau highlights the increasing partnerships of banking and insurance services to expand customer reach and provide comprehensive financial solutions through innovative alliances.

In addition, the reported challenges faced by Asian insurers to integrate AI emphasised the need for organisational restructuring and investment in technology and data resources. Read more on page 20.

As the insurance landscape continues to advance, propelled by digital transformation and customer-centric approaches, industry leaders must navigate these changes proactively to remain competitive and provide greater value to policyholders.

Read on and enjoy!

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INSURANCE ASIA

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CONTENTS

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INSURTECH WATCH THE NETFLIX OF INSURANCE: KOVERNOW OFFERS INSTANT COVERAGE WITH ONE CLICK

FIRST 04 Inflationary environment tests insurers' resilience

05 No life and health insurance market fully inclusive

06 Protectionism, inflation weigh on insurers

08 Banks seek insurance partnerships to target rich customers

10 How micro pensions help informal workers

INSURTECH WATCH 13 InsuranceDekho builds one-stop solution for India’s fragmented insurance ecosystem Published bi-annually by Charlton Media Group 101 Cecil St. #17-09 Tong Eng Building 2 INSURANCE SingaporeASIA 069533

INTERVIEW

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CEO INTERVIEW TAN SEK KEE ON HOW FLASH FLOODS, LACK OF TALENT HIT MALAYSIA’S INSURANCE INDUSTRY

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COUNTRY REPORT DATA SPECIALISTS IN HOT DEMAND AMONG HONG KONG INSURERS

RETAIL WATCH

18 Great Eastern builds 5 digital ecosystems to reach Indonesia’s uninsured

19 GIA Singapore’s system detects fraud overlooked by insurers

22 Singapore Business Review’s Insurance Rankings sees slow growth amongst top 50

26 Life insurers take the lead in latest Hong Kong Business Insurance Rankings

ANALYSIS 20 Asian insurers’ AI-readiness dictates their competitive advantage

EVENT 30 Zurich Malaysia reaches for positive impact in sustainability

COMMENTARY 32 Embrace technology, elevate experience: The future of personalised insurance

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

insuranceasia.com

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FIRST APAC Life Insurance Industry performance, 2000 to 2021

Source: McKinsey & Co. 2023 Global Insurance Report

Inflationary environment tests insurers' resilience LIFE INSURANCE

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pprehensions around a new retirement scheme and higher claim payments are amongst some factors that dragged down insurance companies’ revenues across Asia Pacific in the first half of 2023, data from various insurance commissions showed.

In Indonesia, the 56 life insurance companies operating in the market reported US$66.4b in revenues for Q1, according to data released by the Indonesian Life Insurance Association (AAJI). This revenue performance is relatively low compared to the same quarter in 2022, the AAJI reported.

However, Indonesian officials remained optimistic that public awareness regarding the function of life insurance protection is growing, citing a rise in the total value of sum assured by the end of the first quarter, at US$332.15t. This is 17.3% higher than in Q1 2022, the AAJI said.

Total claim payments made by Indonesian life insurance providers reached

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US$3.02b in the three-month period, a 5.1% increase from the previous year.

India’s life insurance providers also saw their premiums contract, this time for the month of April, when premiums fell by 30% compared to the same month in 2022.

Data from India’s Life Insurance Council showed that insurance premiums contracted 30% in April.

This was mainly dragged by the stateowned Life Insurance Corporation of India, whose life insurance premiums severely dropped 50%, according to data from the Life Insurance Council.

On the other hand, life premiums from the private insurance sector went up 9%.

Group single premiums in India recorded the largest drop, by 50%. This was followed by individual single premiums, with a 12% decline; and individual non-single

premiums, with a 2% decrease. Indonesia’s group yearly renewable premiums offset the declines, rising by 53%.

Singapore, meanwhile, saw new business premiums fall by 13.6% during the first quarter, according to data from the Life Insurance Association of Singapore (LIA).

Singapore’ sluggish economic growth during the first quarter and apprehensions about a possible technical recession in 2023 all weighed down on demand for singlepremium products, LIA said. The rising interest rates and the competitive market also did not help insurers in Singapore.

Moving beyond life insurance, Hong Kong’s insurance market also saw a 7% decline in gross premiums, to US$18.83b in the first quarter, according to data from the insurance authority of Hong Kong.

The Hong Kong insurance industry saw its total revenue premiums contract 8.9% to US$16.19b, dragged down by “isolated transactions concerning Retirement Scheme business” for the same quarter in 2022.

Further, total claims and benefits paid reached US$10.04b.

During the quarter, the general insurance business in Hong Kong experienced growth in both gross and net premiums. Gross premiums rose by 6.9% to reach US$2.65b, while net premiums increased by 4.1% to reach US$1.6b.

Insurers to weather equity markets decline Despite reported sluggishness across various markets in APAC, the region’s insurers should be able to weather up to a 10% decline in regional equity markets.

Results by a stress test conducted by S&P Global Ratings indicated that potential losses resulting from a decline in the equity market could negatively impact the earnings and capital adequacy of insurers in the region.

“This would affect the financial risk profile assessment. A weaker financial risk profile assessment could affect the standalone credit quality and rating on an issuer,” analysts from S&P Global said.

In the APAC region, approximately half of the rated insurers maintain a capital level within 10% of the required capital adequacy to support their credit rating.

Around 30% of insurers are even closer, within 5% of this threshold.

The insurance industry in the AsiaPacific region remains well-built to take on some moderate equity market volatility, observed S&P Global.

[APAC's] insurance industry remains well-built to take on some moderate equity market volatility

FIRST

Julien Descombes

Japan has effectively made L&H insurance highly accessible

No life and health insurance market fully inclusive INSURANCE PRODUCTS

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lthough Japan’s life and health insurance was deemed accessible, insurers in the industry are found to be weak in terms of upskilling customers and innovating its underwriting spectrum.

A study by the Swiss Re Institute noted that Japan has an aggregate inclusion score of 0.66, just behind the United States, based on a study that measured inclusivity of L&H markets on three dimensions: availability, accessibility, and affordability.

Japan was reportedly effective in making L&H insurance highly accessible to a broad spectrum of customers, evidenced by its novel

approaches to distribution and a high life insurance penetration rate.

Other Asian countries that ranked in Swiss Re's top 10 for inclusive insurers included India in sixth place (0.52) and Indonesia in eighth (0.51).

Consumers in advanced markets like Japan experience fewer difficulties accessing their L&H insurance services than those in emerging ones. “This is primarily driven by systemic factors like their financial markets being more established, leading to high levels of financial institution accountholding and credit usage,” Swiss Re stated in its report.

No L&H insurance market is fully inclusive

However, they are somewhat weaker in providing skills development opportunities for insurance professionals, and innovation on the underwriting spectrum, creating a deficit in the availability dimension, Swiss Re said.

L&H insurance markets in advanced countries also provide a “wide range of cover types and innovative product options” that suit their consumer’s needs more than those in emerging markets, added Swiss Re. None fully inclusive The Swiss Re Institute report, however, underscored that no L&H insurance market is “fully inclusive.”

To make L&H insurance markets in both advanced and emerging countries inclusive, the Swiss Re Institute said that they must perform consumer-focused market research across all segments.

This is so that they can understand the needs of underserved customers and make the right strategic partnerships to increase accessibility of consumers to insurance products.

“By making L&H insurance more affordable, available, and accessible, individuals and households are better equipped to withstand the financial challenges that occur when a primary breadwinner passes away or when they incur high costs of healthcare treatments,” said Julien Descombes, head of Swiss Re Institute’s life and health products reinsurance.

SINGAPORE’S LIFE INSURANCE INDUSTRY DOWN IN FIRST QUARTER

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he value of weighted new business premiums in Singapore fell by 13.6% in the first three months of 2023 compared to last year, according to data released by the Life Insurance Association of Singapore (LIA).

This amounted to a total of US$790m (S$1.05b) in the January to March period. For single-premium products, it also fell to US$267.1m (S$355.7m) in Q1, 46% lower than the value reported in Q4 2022. Amidst the country’s sluggish economic growth during the first quarter of the year and apprehensions about a possible technical recession looming over Singapore in 2023, the decline in demand for singlepremium products can be linked to the turbulent macroeconomic conditions

and mounting interest rates in an intensively competitive market, said LIA. In contrast to the downward trend, the take-up of annual premium products jumped 24.7% QoQ to US$520m (S$692m) in total weighted premiums.

In the first quarter of 2023, tied representatives played a pivotal role in obtaining a significant US$9.2b (S$12.3b) sum assured, which accounted for 40.3% of the total sum assured in the period.

Financial advisory representatives also made a notable contribution, securing US$7.8b (S$10.4b) in sum assured, which represented 34.1% of the total sum assured for the same period. The insurance industry recorded a total of US$30.5b (S$23b) in sum assured during the first quarter.

Singapore Life Insurance Industry Figures, Q1 2023

Source: LIA Singapore

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FIRST Ed Majkowski, Peter Manchester, Lorenzo Fattebene, and Anna Huyronovich.

“In the Asia-Pacific region, the short tailed nature of insurance products in many markets gives insurers increased ability to reprice policies quickly, thus correcting for inflation and partially compensating for depleted reserves,”EY said.

Firms that outsource key parts of the value chain, such as investment management, IT services, will certainly feel an additional pinch, they warned.

Amongst segments, non-life insurers are likely to realise the positive effects on investment income more quickly, as they maintain relatively short-duration portfolios.

If the interest rates remain high, long-term returns will also improve because bond portfolios gradually will roll over into higher yields.

NATURE'S FURY FUELS INSURANCE DEMAND PROPERTY

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loods and fires are driving more consumer awareness and take-up of property insurance in Southeast Asia.

In Malaysia, for example, the country’s high exposure to natural disasters has pushed up consumer awareness on this segment.

Currently, property insurance make up the the second largest line in Malaysia’s general insurance market, accounting for a 24.6% share of the general insurance direct written premiums as of 2022.

Malaysia’s property insurance market is expected to grow by a further 6.7% in 2023, driven by an increase in residential and commercial construction activities.

“The country’s high exposure to natural disasters during the last few years, especially floods, has played a pivotal role in increasing consumer awareness of property insurance,” said Sutirtha Dutta, insurance analyst at GlobalData.

Reacting to the increasing demand, insurers are providing flood coverage under comprehensive fire policies, which will support property insurance growth, Dutta added. As a result of this, property insurance in Malaysia is expected to grow at a compound annual growth rate of 7.7% between 2022 and 2027.

In Singapore, compulsory fire insurance is propping up its real estate insurance market.

A major factor for the growth is that fire insurance is required when purchasing homes from the Housing and Development Board (HDB) and taking home loans.

Singapore's property insurance industry is project to be worth S$1.5b (US$1.1b) by 2027, growing at a compound annual growth rate of 8.7% from S$1b (or US$700m) in 2022. Adequate reinsurance coverage will also help Singapore property insurers to remain profitable in 2023.

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EY analysts advised insurers to look out for opportunities in the InsurTech space

Protectionism, inflation weigh on insurers VALUATIONS

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nsurers will need to be more nimble in their decision-making if they wish to cash in on the earnings tailwinds from higher interest rates.

Whilst the higher interest rates may provide a boon for insurers’ earnings, they also face balancing out customers’ difficulty to pay their premiums as they adjust up their pricing.

The year of 2023 thus far saw insurers face a triple whammy of high inflation, high interest rates, and increased protectionism.

“This isn’t the first inflationary environment the insurance industry has had to navigate, but it is shaping up to be one of the most difficult.

Whilst inflation and recession will hurt insurers in the form of higher claims costs and reduced demand, higher interest rates may provide an earnings tailwind, thanks to improved investment returns,” Ernst & Young (EY) noted in their outlook report.

But those returns will require brave decision making, careful hedging and timely refinements to asset and liability management (ALM) policies, said the reports authors: Isabelle Santenac, Anita Sun-Young Bong,

Isabelle Santenac

Anita Sun-Young Bong

[This inflationary environment] is shaping up to be one of the most difficult

Higher interest equal higher yields Life insurers are expected to benefit from the discounted values of liabilities.

Furthermore, if interest rates remain high for the longer term, this may lead to interest in guaranteed income products treading higher, according to the EY report.

However, the likely outflows of customers moving into guaranteed income products, which require more solvency capital, must also be taken into account.

“The hit on demand and retention could also be significant, with more consumers lowering coverages, increasing deductibles or deciding they can no longer afford insurance. Some competitors may increase guarantees to gain market share despite the volatility,” EY said.

InsurTech in doldrums The InsurTech space is another segment experiencing some price corrections. In the US, for example, EY noted significant drops in InsurTech valuations.

Globally, funding to InsurTechs have fallen by 41% in the first half of 2022 to $4.8b, from $8.2b in the first six months of 2023.

The EY analysts advised insurers to look out for opportunities in the InsurTech space, which apart from being a source of competition has been noted as a source of innovation.

Aflac will further accelerate digital t 「ansformation to leap fo 「 ward to become the leading company for ℃reating Living in Your Own Way_" Aflac has been creating value with digital technology, not only in its core business but also 1n new business areas surpassing the scope of 1nsu 「ance Aflac will continue to provide new value to its customers, business partners, employees, shareholders, society, and other stakeholde 「 S.

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A f l a c L i f e In s u r a n c e Ja p a n Lt d http s ://www. af I a c. co _j p/ INSURANCE ASIA

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FIRST

FWD Macau will provide a suite of insurance products and services to China CITIC Bank’s Macao customers, including high-net-worth individuals

Banks seek insurance partnerships to target rich customers

S

BANCASSURANCE

everal banks in Asia have embarked on bancassurance programs with insurers to target high-net-worth individuals.

In Hong Kong, China CITIC Bank teamed up with FWD Macau, enabling the bank’s customer base to access FWD’s suite of insurance products and services.

In particular, the arrangement seemed to target the bank’s high net worth individual, with China CITIC Bank International executive director and deputy CEO Helen Kan noting that customers are likely to “reassess their insurance and protection needs with respect to wealth accumulation, preservation and legacy planning for future generations.” In Singapore, HSBC inked a 15-year bancassurance deal with MSIG Singapore. Under the exclusive agreement, MSIG will distribute its commercial and personal suite of insurance solutions to HSBC’s customers in Singapore.

“With our combined strengths and expertise, we can create value for a more protection focused future for individuals,

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their families and businesses. Through our partnership, we look forward to strengthening MSIG’s position in Singapore with profitable growth,” MSIG Asia CEO Clemens Philippi said, commenting on the new partnership.

Back at Hong Kong, Dah Sing Bank and Sun Life Insurance closed a HK$1.5b deal for a 15-year bancassurance partnership.

With this, Sun Life is now the exclusive provider of life insurance solutions to Dah Sing Bank’s 570,000 retail banking customers. Following the completion of regulatory processes and approvals, distribution of Sun Life products is anticipated to start in July 2023.

Bancassurance refers to the arrangement between a bank and an insurance company in which an insurer is allowed to offer their products to the bank’s current customer

base, according to one definition by Investopedia. Bancassurance has since become an important distribution channel for insurance products across Asia–Pacific.

In a report, around 31%of life insurance premiums in the Asia Pacific region came from bancassurance, according to data from McKinsey & Company.

“To successfully tap into the potential of this market in the coming years, banks and insurers need to act on three emerging imperatives: digitalising the bancassurance channel, reinventing the business model, and bringing purpose to the fore,” wrote McKinsey’s Vikas Gour, Anindya Mukharjee, Sumit Popli, and Sujin Saj in a bancassurance report published in 2022.

To capture attention, banks and insurers must reimagine the bancassurance business model with customers’ preferences and expectations at the core, the four McKinsey & Co. authors said.

“This could imply, for instance, the emergence of contextual products that are embedded in the insurance journey and ongoing advice to help customers change certain behaviors. Incumbent players need to build these capabilities rapidly, as customer behavior has transitioned rapidly,” the report stated.

The future of bancassurance will involve recasting the channel as a way for customers to build and manage an integrated financialwellness plan. In addition to purchasing appropriate life and nonlife insurance protection, customers will be able to access comprehensive financial support, including loans to achieve life goals and advice on savings and investment, McKinsey said.

Amongst capabilities expected of banks and insurers include: products across multiple asset classes; third party services to cover broader financial needs; and simpler, more modularized products.

Underwriting capabilities must be driven by advanced analytics, including a simplified process for medical underwriting and access to extensive propriety research.

Insurers and banks must also have the right sales platform capabilities, including an advanced analytics–driven robo-advisory engine, online-to-offline journey assistance, multimedia educational content, one-click sales journeys, and continuous engagement throughout the customer life cycle via both digital and in-person channels.

With our combined strengths and expertise, we can create value for a more protection-focused future for individuals, families, and businesses

All for # And the world’s #1 insurer for all.

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FIRST programme, including social insurance, that they cannot afford or contribute to due to their lower income.

To address this issue, regulators will have a pending task to provide innovative financial solutions that may provide financial security to informal workers. One of the said solutions is micro pensions.

UNDERSERVED MAINLANDERS DRIVE HK INSURANCE MARKET DIGITAL INSURANCE

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ong Kong’s life insurance market faces a boon over the next two years, as tourism from the mainland ramps up.

New business growth for the life segment will climb 20% to 25% in 2023, before slowing down to a 10% to 15% growth in 2024.

"Hong Kong's geographic proximity provides an opportunity for its insurers to better serve the mainland's underpenetrated market,” said S&P Global Ratings credit analyst Judy Chen.

Cross-border travel fully resumed in February 2023, leading to a significant increase in the average case size of new life policies for mainlanders. During the first quarter, the average case size more than doubled to around HK$280,000, compared to HK$126,000 in 2019 prior to the pandemic.

Mainland China customers are attracted to Hong Kong due to several factors. These include a widening interest rate differential, opportunities for asset diversification, and access to comprehensive healthcare.

Insurers from Hong Kong offer savings and investment policies in foreign currencies, as well as more detailed critical illness and medical insurance options compared to their mainland alternatives.

Sales have shown a strong rebound, but they have not fully recovered to pre-COVID levels. In the first quarter of 2023, new-business premiums from the mainland experienced a significant surge to HK$9.6b, compared to HK$345m in the same period the previous year. This is still below the quarterly average of HK$12.3b recorded between 2015 and 2019.

However, the benefits will vary based on brand reputation and service quality, with larger insurers to excel.

Insurers like AIA International Ltd. and Prudential Hong Kong Ltd., who invested in and maintained their agency forces during the pandemic, have benefited from the return of visitors, said S&P. 10 INSURANCE ASIA

Taxpayers might catch the burden of paying informal workers for their social insurance

How micro pensions help informal workers INSURANCE PRODUCTS

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he lack of insurance amongst informal workers could create problems in governments and taxpayers in the near future, sparking the need for game changers such as micropensions to keep this segment covered.

Speaking at a panel discussion during the 2022 Singapore Fintech Festival, Parul Seth Khanna, Director of pinBox Solutions, noted that taxpayers might catch the burden of paying each worker for their social insurance, especially when they reach old age.

“The government will pay out any kind of tax-funded benefits to the elderly, which is not going to be an option because all of us will pay $1 per day for their pension,” she said.

An estimated two billion workers, or 61.2% of the world’s labour force, belong to the informal sector, according to data from the International Labour Organisation. They all have limited access to a social protection

Parul Seth Khanna

Kamal Quadir

Micro pensions These life insurance products provide small, affordable contributions and benefits designed to be flexible, simple, and accessible to any informal worker.

However, to make micro pensions work for the workers in the informal sector, according to Dr David Tuesta, the former Minister of Finance in Peru, it required financial education, which is another pending task for regulators.

“Until now, regulators have been taking timid steps in this area. The potential is there. We need to continue preaching to regulators to open their minds to this decision,” Dr Tuesta said in the same panel discussion.

To make the task easier, several regulators integrated technology into tools they used for behavioural finance and financial inclusion to help them encourage informal workers to save.

Aside from financial education, regulators must also emphasise the importance of digitalisation.

According to Kamal Quadir, founder and CEO of bKash Limited, a growing technological infrastructure in developing countries and cheaper access to smartphones allowed informal workers to contribute and receive micro pensions easily through digital platforms such as WhatsApp. “Today, technology is allowing poor people to participate in the financial platform. So instead of putting the money in the pocket or under the mattress, you're putting the money in the system, and you feel very safe because you can access that money anytime you want,” Quadir said.

However, the panelists agreed that the challenge in developing long-term micro pensions remains. According to Quadir, regulators need to build trust to make long-term savings for informal workers happen. “Trust is based on how the system is built. And that system includes regulatory bodies, the financial institutions, and the technology they offer,” he said.

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INSURTECH WATCH: KOVERNOW

The Netflix of insurance: KoverNow offers instant coverage with one click Its subscription model gives another option for consumers that don’t want long contracts.

W SINGAPORE

hen Stephan Kaiser, CEO of insurtech firm KoverNow, first created his company in 2019 he was banking on people becoming attracted with the subscription-based model, and for good reason. Almost four in five people or 78% of adults globally are enrolled in a subscription service, making it the most in-demand business model in the world, according to data from Zuora's Subscription Economy Index report published in 2021.

Speaking with Insurance Asia, Kaiser, who is a former investment banker, explained that his experience in his last job initially brought him close to the insurance industry. He used to raise capital and debt for insurance firms. Whilst working in the industry on a project basis, he came to realise that even though most banking services have evolved to adapt digitally, most insurance services have not.

“I thought that was becoming an obvious pain point. So when I spent enough time in investment banking, I thought it was time to do something else. That’s when I move to insurance,” Kaiser explained. He first started the company in the UK in 2019 but decided to uproot and go to Singapore as he believes that there is more demand for his vision of an insurance model in Asia, particularly in Southeast Asia.

Netflix for insurance Kaiser described that platform is like Netflix. This means customers can decide whether they will get the monthly subscription or the yearly one. They can also ‘turn off’ their subscription whenever they want.

KoverNow’s main product is called Items Kover. It is an insurance product that covers luxury items such as jewellery, watches, cameras, handbags, laptops and more. The way it works is that a customer can register their luxury items in the app and ‘subscribe’ to insurance 12 INSURANCE ASIA

In a recent campaign, KoverNow is giving the spotlight to insuring luxury watches

APAC, not just Singapore, is the dominating region within [the global luxury watch market] pie

Stephan Kaiser

whenever they have to use it or take it out. “The way it works is that for each of those categories, we have an underlying database. For example, for watches, we have 35,000 watches in our database that we know all the details of. And because we know all the details, we can establish a current market price for every one of those watches every day,” Kaiser said.

This means, that users who register an item for evaluation get an almost instantaneous number of how much that watch is worth in the current market and how much the insurance will cost. “Let’s say a watch is worth $4,950. If you register it in the app, we can immediately give you an executable policy price to insure that watch for 30 days. The whole thing is digital,” Kaiser explained.

With the way it also works, if the value of the item in the market goes up, the premium for it automatically goes up in the app as well which is part of KoverNow’s agreed-upon policy. And that coverage is on a global scale. Aside from North Korea, once consumers insure the item, it will be covered.

KoverNow also made making claims easier. If the insured item is lost or damaged, all you have to do is answer a few questions about what happened, and submit a police report

if loss or a photo if damage. Then all the app will ask for you next is your personal information and a bank account where they will send the claim. “That's only possible because everything is compartmentalised in digital. And we can take those things and put them together, as we need for the customer to have a good user experience,” Kaiser said.

A growing market In a recent campaign, KoverNow is giving the spotlight to insuring luxury watches. This is a calculated business move according to Kaiser because the global luxury watch market is around $30b and is expected to grow to $33b by 2026.

“And the interesting part is that Asia Pacific, not just Singapore, is the dominating region within that pie. Additionally, Singapore is great market for luxury watches, especially Swiss watches. In fact, there have been S$3b ($2.11b) worth of watches sold in Singapore this year,” Kaiser explained. Crunching the numbers, the potential premium income of ensuring that S$3b worth of watches is around S$60m. This is quite a sizeable income because a lot of these watches, Kaiser said, just sit at home or in banks, having only the minimal risk of loss or damage.

INSURTECH WATCH: INSURANCEDEKHO

InsuranceDekho builds one-stop solution for India’s fragmented insurance ecosystem The insurtech firm secured US$150m in Series A funding round. present in 98% of Indian zip codes.

The insurtech is eyeing to get 200,000 partners onboard to serve all of India on their platform.

There are many villages in India where an InsuranceDekho partner is the only way for people to access insurance (Photo from the InsuranceDekho website)

INDIA

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xperiencing first-hand how fragmented the insurance ecosystem was in India, Ankit Agrawal set out to build a company that served as a one-stop solution for partners and consumers.

He founded InsuranceDekho, an Insurtech firm not only devoted to making insurance available but to providing citizens with the best claims experience through integration.

Agrawal's vision was simple: provide maximum benefits across the motor, health, life, and other general insurance products in the entire industry by bringing the insurers all in one place.

Turning a personal setback around In a quick sit-down with Insurance Asia, Agrawal shared how his idea of a tech-first insurance distributor was borne out of a personal experience with claims. “After coming back from the US, I had to deal with an insurance claim in the family which exposed me to the challenges of a fragmented insurance ecosystem in India. If a literate and well-aware customer like me with a fairly comprehensive health policy had to go through claim hassles during difficult times, we can only imagine

The plan was simple: provide maximum benefits by bringing the insurers all in one place

Ankit Agrawal

what people in the hinterland would be going through,” he said.

With that in mind, the InsuranceDekho CEO built his firm as a tech-first insurance distributor that offers a comparison on quotes from different providers to aid customers in choosing what insurance to buy. The platform lets you compare insurance quotes from 46 insurance companies and purchase the insurance policy that best suits your needs. It caters to all the needs of partners and consumers from sourcing to fulfilment to post-sales support and helps them scale multifold. What sets InsuranceDekho apart is the wide reach of its platform, since Agrawal wants it to reach rural areas in India.

“There are many Indian villages -- where an ID (InsuranceDekho) partner is the only way for people to access and buy insurance. In India, very often a health emergency means financial bankruptcy for the family -- we have been able to create a transformational impact by making insurance accessible in some of the remote regions where we operate,” Agrawal said.

Insurers also benefit from that reach. Currently, ID partners are

Funding Up until recently, InsuranceDekho has been bootstrapped but it has recently raised US$150m consisting of a mix of equity and debt, the largest ever series A round by an Insurtech company in Southeast Asia.

The equity round was led by Goldman Sachs Asset Management and TVS Capital Funds with participation from Investcorp, Avataar Ventures and existing investor, LeapFrog Investments.

“With this funding, we want to build a robust insurance platform for Bharat (rural India). There are 640,000 villages in India and we want to make insurance accessible to all.

We plan to continue building on our tech stack and products, invest in branding, and evaluate some mergers and acquisition opportunities we have identified across technology and geographical expansion capabilities.

We are also working on new offerings and plans to expand our micro, small and medium enterprises (MSME) and life insurance portfolio offerings,” Agrawal said.

Staying competitive To stay ahead, Agrawal said they would lean on tech-driven initiatives and innovations to improve the customer experience by enabling them to choose the right policy by themselves.

“We have also developed AI-based tools to recommend the best-suited approach to the customers based on their profiles and requirements. India has at least 6 crores (60 million) MSMEs, and most are uninsured.

We are working on exciting features and innovations to serve the MSME market,” he said. Additionally, a lot of focus is also put on the training and development of their employees and advisor partners.

INSURANCE ASIA

13

CEO INTERVIEW

Tan Sek Kee on how flash floods, lack of talent hit Malaysia’s insurance industry Berjaya Sompo's CEO shared the obstacles faced by the company such as a shrinking talent pool and climate change, and the strategies they employed to try to overcome these challenges.

F

MALAYSIA

ollowing the significant financial impact of the December 2021 flash floods in Malaysia, which amounted to at least $350 million (MYR 1.5 billion) for Malaysian insurers, Tan Sek Kee, CEO of Berjaya Sompo Insurance Berhad, sheds light on the ongoing challenges faced not only by insurers in Malaysia but also across the entire Asian region. In this interview with Insurance Asia, Tan Sek Kee shares his personal journey into the insurance industry and how he navigated the various challenges that confronted Berjaya Sompo.

What are some of the challenges of the general insurance industry in Malaysia and in the Asia Pacific?

Not many new people are entering the insurance industry.

Those with experience are reaching or have reached their retirement age or are moving to other countries attracted by better packages.

Another challenge is climate change, which has caused extreme flooding like, for example, in December 2021. We expect the frequency and severity of floods to continuously worsen, leading to increasingly large losses in the property and motor vehicle segment. This will have a material impact on our business as claims increase.

What has Berjaya Sompo done to solve these challenges?

We are starting a Management Trainee programme to start attracting graduates into our industry. Over the course of this programme, we will expose them to various functions within the company and hopefully demonstrate what a noble industry we are in. We have set up a sustainability committee at Berjaya Sompo in 2022 where we run many projects to contribute to ESG. What makes Malaysia’s general insurance industry different from other Asian markets?

Compared to other markets, Malaysia’s general insurance industry is strongly regulated by our Central Bank. This makes us quite a disciplined market. However, the two main lines of business, motor insurance and fire insurance, are currently undergoing phased liberalisation and this has started to bring in more competition as well as innovation.

What was the greatest test of your leadership skills and how did you overcome them?

In 2017, we changed our front-end system, back-end system, started a new bancassurance distribution channel, and implemented Phase 1 of motor and fire detariffication all in the same year. Needless to say, with so many major projects in the same year, not everything went smoothly and staff morale was impacted and people started to leave.

In the same year, not everything went smoothly and staff morale was impacted and people started to leave. I went into operational mode and managed the key projects personally, 14 INSURANCE ASIA

We are working towards making insurance easy for our clients to understand, to buy, to renew, or to make a claim (Photo: Tan Sek Kee, CEO, Berjaya Sompo)

[Insurance] is a very noble industry

motivated team members, recruited new people with the right skills, and we successfully overcame the hurdles.

In your term as CEO, what are the top projects of Berjaya Sompo that you are proudest of?

We embarked on a project to improve efficiency in 2017.

Over six years, we reduced our headcount by 20% whilst increasing our premiums by 35%. Our productivity per employee increased from about RM 1 million per employee to RM 1.7 million per employee today. This was done through the Business Process Improvement Project to identify and remove redundant and duplicate processes and utilise Robotic Process Automation as well as digitalising processes.

Improving efficiency is not only about cost savings but also contributes to customer experience.

Can you share with us your next plans and projects or if there are new ones underway?

Our Mission is “Insurance Made Easy for You.” Buying insurance or making an insurance claim should not be a scary experience for our clients. We are working towards making insurance easy for our clients to understand, easy to buy, to renew, or to make a claim. Right now we are focusing on our ESG (environmental, social and governance) initiatives.

Listening. Understanding. Delivering.

Listening. Understanding. Delivering.

8/F Uptown Place Tower 1, 1 East 11th Drive, Uptown Bonifacio, 1634 Taguig City, Philippines Office trunklines: (632) 8683 9000, (632) 8884 8484 Customer helpdesk: (632) 8887 LIFE within Metro Manila, 1 800 10 PRULINK for domestic toll-free Established in 1996, Pru Life UK is the pioneer of insuravest, or investment-linked life insurance products, in the Philippines and is one of the first life insurance companies approved to distribute US dollar-denominated investment-linked life 8/F Uptown Place Tower 1, 1 East 11th Drive, Uptown Bonifacio, 1634 Taguig City, Philippines insurance policies in the country. Since its establishment, Pru Life UK has expanded its reach to over 190 branches in the Philippines, with the biggest life agency force of about 35,000 licensed agents. The company ranked first (1st) among the Office trunklines: (632) 8683 9000, (632)Commission’s 8884 8484 Full Year 2021 rankings in terms of new business annual premium equivalent. Pru Life UK is headquartered in Uptown Bonifacio, Taguig City. Pru Life UK and Prudential plc are not affiliated country’s life insurers based on the Insurance Customer helpdesk: (632) LIFE within Manila, 1 800 10 PRULINK for domestic with Prudential Financial, Inc.8887 (a company whoseMetro principal place of business is in the United States oftoll-free America), Prudential Assurance Company (a subsidiary of M&G plc, a company incorporated in the United Kingdom), Philippine Prudential Life Insurance Company, Prudentialife Plans, Inc. or Prudential Guarantee and Assurance, Inc. (all Philippine-registered companies). Pru Life UK is a life insurance company and is not engaged in the business of selling pre-need plans.

Established in 1996, Pru Life UK is the pioneer of insuravest, or investment-linked life insurance products, in the Philippines and is one of the first life insurance companies approved to distribute US dollar-denominated investment-linked life insurance policies in the country. Since its establishment, Pru Life UK has expanded its reach to over 190 branches in the Philippines, with the biggest life agency force of about 35,000 licensed agents. The company ranked first (1st) among the www.prulifeuk.com.ph Pru Life UK - Official @PruLifeUK @PruLifeUK Pru Life UK country’s life insurers based on the Insurance Commission’s Full Year 2021 rankings in terms of new business annual premium equivalent. Pru Life UK is headquartered in Uptown Bonifacio, Taguig City. Pru Life UK and Prudential plc are not affiliated with Prudential Financial, Inc. (a company whose principal place of business is in the United States of America), Prudential Assurance Company (a subsidiary of M&G plc, a company incorporated in the United Kingdom), Philippine Prudential Life Insurance Company, Prudentialife Plans, Inc. or Prudential Guarantee and Assurance, Inc. (all Philippine-registered companies). Pru Life UK is a life insurance company and is not engaged in the business of selling pre-need plans.

www.prulifeuk.com.ph

Pru Life UK - Official

@PruLifeUK

@PruLifeUK

Pru Life UK

INSURANCE ASIA

15

COUNTRY REPORT: HONG KONG

Data specialists in hot demand amongst Hong Kong insurers Specialities in digital transformation, data management, and data analytics will remain in high demand throughout the year.

H

ong Kong’s insurance the industry is showing signs of recovery with the increase in awareness for better health and the diversification of business portfolios, according to the Randstad Hong Kong: 2023 Market Outlook & Salary Snapshot Report. Thus, many insurers are responding to business demands by creating new roles and job opportunities, expanding their workforce to allow them to be more competitive and creating clear-cut roles for their employees.

According to the report, data and digital talents will be in demand, with insurance employers expected to create more new jobs in digital transformation, data management, and data analytics.

This is because of two things.

First is that the shift to remote or flexible work arrangements created a demand for the insurance workforce.

A study by Cigna revealed that 51% of workers in the Asia Pacific region prefer the option to work from home.

The second reason is that digital

Insurers will need to advance their data management and analytics capabilities

products and services for consumers are gaining popularity.

“Insurers will continue to automate and streamline the endto-end underwriting and claims systems to speed up the process for customers and reduce costs. To enable that, insurers will need to advance their data management and analytics capabilities, which will be done through upgrades of data management systems to drive greater transparency and collaboration across the business,” the Randstad report said. Actuaries are also highly sought after due to challenges in recruiting the right talent for junior to middle management positions as many young actuaries have taken subsidies to relocate to Canada and Australia over the past two years.

“It is also one of the 13 fields that the government is planning to allow employers to hire ex-pats without having to prove that there are no suitable local candidates to fill the roles. Risk managers with an actuarial background as well

as valuation and pricingactuaries will be in high demand next year,” the report said.

Insurers’ efforts With all this data, Insurance Asia asked several insurers what they are really looking for this year.

Maylie Lee, Chief Human Resources Officer at AIA Hong Kong & Macau echoed that talent in the field and profession of actuary and digital technology and policy would be in demand as well as in agency business development, policy issuance, customer service and business analysis.

Meanwhile, Donna Kirmani, Chief Human Resources Officer at Manulife Hong Kong and Macau, said that they are actively hiring employees and agents with experience with Mainland Chinese Visitors (MCVs). This is aligned with Manulife’s survey last year where over half (51%) of respondents who are visiting Hong Kong are there to buy insurance, meaning that there is a large demand for insurance in the GBA area.

The demand is the result of the China Risk-Oriented Solvency System—which reduces capital requirements if GBA businesses cede their businesses to eligible local professional reinsurers—creating

Whilst many Asian countries reported growths in their life insurance premiums, Hong Kong reported a contraction in 2021

Source: KPMG and Swiss Re

16 INSURANCE ASIA

COUNTRY REPORT: HONG KONG

Maylie Lee

more business opportunities for locally-based insurance firms to support mainland enterprises’ investment in Belt & Road countries, the Randstad report said.

“To take advantage of these opportunities, insurers are hiring underwriters who have acquired work experience in mainland China or have underwriting experience for Chinese businesses and customers,” the Randstad report said.

“Our employee acquisition plans are executed in accordance with our strategic priorities and business needs. We are hiring health product experts, and talents for our operations’ critical roles such as actuarial, claims, underwriting, sales, and customer service,” Kirmani said.

Keeping talents To further expand their agent pool, Ivan Chan, Chief Agency Officer at Manulife Hong Kong and Macau said that they also launched a programme called Manulife IANG Talents (M.I.T.) to recruit non-local graduates with potential to the industry.

Meanwhile, FWD said digital talents are key to digital transformation for many companies to drive business growth.

“At FWD, we constantly recruit young talents such as Digital Graduates to fuel the digital journey of our organisation by using cuttingedge technology to address the evolving needs of today’s customers,” Miranda Au, Chief Human Resources Officer at FWD Hong Kong & Macau said.

Insurers also have a number of ways to keep these talents. For AIA, their employee value proposition

“Believe in Better” epitomises a desire to create a healthier, more sustainable future together which the insurer tries to embed in various employee life cycle touch points. “For example, we carry out surveys with new hires on a timely basis to understand their needs and have set up task forces to regularly review and enhance their onboarding experience. And as an advocate of grooming future talent and leaders, and fostering an inclusive culture by integrating people with diverse backgrounds and cultures, we offer a variety of workshops that focus on empathic leadership to strengthen people management ownership,” Lee said, mentioning that AIA has rolled out several programmes aimed at improving the workforce well-being and providing a holistic well-being programme.

Meanwhile, Chan mentioned that they invest strongly in their agents such as offering career development programmes and comprehensive

Donna Kirmani

Ivan Chan

Miranda Au

training courses such as the CEO programme that equip employees with the right skill set to attain professional excellence.

“We also provide our agency force with advanced digital tools and ensure we have the best-inclass product solutions for them to offer to customers. In the past two years, we have expanded our agency offices in Kowloon East and launched a premium customer service centre in Tsim Sha Tsui to help our agents better serve their customers,” Chan said.

Manulife also has a massive recruitment plan for 2023, aiming to hire 3,000 agents before the year is up.

FWD, meanwhile, takes its hiring to the next level by employing the use of current technology.

“We offer a quick and digitalised experience for any candidates. They can engage with us anytime and anywhere through AI chatbot, video interview, gamified assessment and e-contract to make the recruitment journey easier for everyone,” Au said.

FWD Hong Kong & Macau also brands itself as a vivid and compelling employer brand. Au said they had been conveying a young, energetic and innovative brand image to the community through multiple channels, such as recruitment fairs, and social platforms.

“We’ve also established various internal training and mentorship programmes to grow our employees’ skills and mentality, promoting a caring, sustainable and innovative culture for all to sustain high performance-driven culture,” Au said.

Insurers are hiring underwriters who have acquired work experience in Mainland China

INSURANCE ASIA

17

INTERVIEW

Great Eastern builds 5 digital ecosystems to reach Indonesia’s uninsured This effort succeeded in optimising their financial performance with a net profit of US$2.04m (IDR 31b).

INDONESIA

G

reat Eastern Life Indonesia is touting five comprehensive digital ecosystems that it hopes will make insurance more accessible to the Indonesian population. “One of the steps we are taking is to utilise technology so that customers can have additional options to connect with us digitally,” President Director Clement Lien Cheong Kiat told Insurance Asia.

Over 90% of individuals in Indonesia remain uninsured, according to Great Eastern, making the market an untapped resource that the company is keen to onboard.

To attract customers, Great Eastern said that it created a comprehensive digitisation process, from customer onboarding to after sales service. This is in line with Indonesian Life Insurance Association (AAJI) call to prioritise easy access for the public to obtain insurance products and services with the principles of customer centricity, customer protection, and digital experience.

Five digital ecosystems First making its steps in digital transformation five years ago, Great Eastern has since built five digital ecosystems. The first, called the GoGREAT! Services Customer Portal, is an individual insurance portal that enables customers to make Fund Switches (for customers with unit-linked policies), view policy information and insurance benefits, view personal information, change the frequency of premium payments, change premium payment methods, download transaction reports, e-policies, as well as e-endorsements.

Second is the GoGREAT! Sales Website, which is the insurer’s portal for purchasing insurance online.

There is also the Great Eastern Corporate-ID (GEC-ID) application for group insurance customers. "Through this application, customers can view benefit details, claim history, submit e-claims, consult online doctors, and make appointments with doctors," said Cheong Kiat.

Fourth is the HR/Broker Portal for group insurance customers. This is where corporate and HR clients of the insurer can manage dashboards, view insurance benefit details, view participant information, add and/or remove participants, and manage premium bills and excess claims.

The final ecosystem, named Great Advice, is a mobile point-of-sales for Great Eastern Life Indonesia’s marketing staff and financial advisors. Through Great Advice, financial advisors can input life insurance requests online, making it more convenient for them to onboard new customers in the ecosystem.

“We have provided various easiness for customers to connect with us. Customers can access their policies on the Customer Portal in just 3 easy steps: enter their KTP/ Passport number, enter the Policy Holder's Date of Birth, and enter the One Time Password (OTP) sent to the customer's mobile number," said Cheong Kiat.

Cheong Kiat added that through these five portals, 18 INSURANCE ASIA

Great Eastern also educates the public through various financial literacy class programs (Photo courtesy of Great Eastern )

Each product is designed according to different needs

customers can avoid the risk of losing transaction submission documents.

Closing inclusion-literacy gap Great Eastern Life Insurance, however, had also recognized that just touting the easiness of their five ecosystems is not enough.

Indonesia’s Financial Literacy and Inclusion Survey (SNLIK) in 2022 found that there remains a large gap between the financial literacy index (49.68%) and the financial inclusion (85.10%). This meant that out of every 100 Indonesians, there are 85 people who now use financial products and services—but only 49 correctly understand what the products and services are.

Therefore, apart from creating easy access for customers, Great Eastern Life Indonesia also educates the public through various financial literacy class programs to help customers understand financial planning.

Great Eastern Life Indonesia has also unveiled a program to help customers understand which insurance products better suits their needs and financial goals.

Each product is designed according to different needs.

The main key is identifying the right product so that customers can meet their needs,"Cheong Kiat stated.

He believes that Great Eastern’s five ecosystems and financial inclusion drive will bring more positive impact on business growth, since the digital transformation can be correctly understood and accessed by public.

“When we identify something that we can improve through digital solutions, we will actively develop it to ensure our customer experience remains good,” Cheong Kiat concluded.

INTERVIEW

GIA Singapore’s system detects fraud overlooked by insurers The Fraud Management System uses data analytics and AI that analyse suspicious claims.

SINGAPORE

S

ingapore’s insurers have banded together with officials and law enforcement to combat the rising cases of insurance fraud in the Lion City.

Insurance fraud cases in Singapore had tripled to 71 in 2021, from only 20 in 2018, according to Andrew Yeo, CEO of Income and GIA Management Committee Member, and Insurance Fraud Committee Convenor.

One notable example is a Singaporean woman who fooled six insurers in 2020 by making 20 fraudulent travel claims worth over S$14k. The perpetrator used photos of damaged The perpetrator used photos of damaged goods, receipts, boarding passes, and even police reports she found online and digitally altered them to support her claims. She would have gotten away with it if not for the GIA’s FMS.Now the woman is serving five months in prison.

“With the reopening of the borders, we are observing an increase in suspicious travel insurance claims between January and July [in 2023] compared to the same period last year,” Yeo told Insurance Asia.

Apart from travel insurance, Singapore’s motor insurance industry is also amongst the most vulnerable segments.

“Motor insurance fraud syndicates are known to operate through a network and recruit individuals to participate in the scam,” Yeo explained. A report by Crawford said at least 20% of all motor claims are fraudulent with claimants exaggerating their injuries and/or inflating the damage to their vehicle. Most of these cases are made by organised crime syndicates which stage traffic accidents and recruit hundreds of people as part of their activities.

“To date, over 300 subsequent motor insurance claims have been investigated by insurers with 13 confirmed as fraudulent cases which have now been turned over to the police,” Yeo revealed.

Insurers provide claims insights which are then shared with the police and fed into GIA’s FMS

investigation branch, which is also part of the IFC. These agencies share information and best practices in detecting and preventing insurance fraud.

“For example, should the police receive reports on a new variant of insurance fraud, they will inform us and we will review our safeguards and conduct more stringent checks to verify the authenticity of the claims,” Yeo said.

This collaboration goes both ways as the GIA also exchanges information with the police on the possible characteristics of fraudulent insurance claims.

"Insurers play a pivotal role as they provide claims insights such as the latest trends and common forms of insurance fraud that they observe, which are then shared with the police and also fed into GIA’s FMS for further refinement of its detection capabilities," Yeo added.

The GIA is also tapping the public to help them identify insurance fraud. Under the GIA Insurance Fraud Tip-off (GIFT), a person who reports fraudulent activities can get a reward of up to $10k leading to successful prosecution and conviction of general insurance fraud cases concerning members of the GIA. Insurers’ role “Insurers are able to provide insights such as the latest trend and common forms of insurance fraud that they observe. This feedback will help refine the FMS system further,” Yeo said.

GIA believes that it is important to impose a high standard of conduct amongst insurers and their employees.

To read the full story, go to https://insuranceasia.com/

General insurance’s first line of defence GIA has collaborated with the police, insurers, and the Commercial Affairs Department to combat fraud using FMS. First launched in 2017, the FMS uses data analytics and AI to detect potentially fraudulent claims at scale.

“When a suspicious claim is detected through the FMS, insurers involved will be contacted to verify the suspicious claim. If sufficient evidence reveals that there is fraud, a police report will be filed and the insurers involved will then need to cooperate with the police,” Yeo explained.

Yeo stressed the importance of the FMS as most of these cases would have gone unnoticed if it was just done through a manual review and even embolden fraudsters to continue with these schemes.

Other ways Aside from the FMS, the GIA also collaborates with specialist investigators from the Commercial Affairs Department and insurance representatives through the GIA Insurance Fraud Committee (IFC). The GIA is also working closely with the Singapore police’s specialised fraud

The GIA is also working closely with the Singapore police’s specialised fraud investigation branch (Photo: Andrew Yeo, CEO, GIA)

INSURANCE ASIA

19

ANALYSIS: ARTIFICIAL INTELLIGENCE

Asian insurers’ AI-readiness dictates their competitive advantage Experts reveal why insurers that adapted AI earlier are now realising bigger extra earnings or cost reductions.

ASIA PACIFIC

I

nsurers in Asia are ill-prepared to take a slice from the trilliondollar market value that artificial intelligence offers for the global insurance industry, McKinsey & Company’s analysts revealed.

“For most Asian insurance leaders, traditional organisational structures with multiple intermediaries and limited in-house tech and data resources make it difficult to visualise, let alone quantify, the potential benefits of investing more broadly in AI,” read a report by McKinsey’s Hong Kong Senior Partner Violet Chung, Singapore Consultant Pranav Jain, and Chennai Partner Karthi Purushothaman.

These legacy structures meant that insurers are missing out on the US$1.1t of annual value.

Approximately US$400b of this could come from pricing, underwriting, and promotion technology upgrades.

Another US$300b could come from AI-powered customer service and personalised offerings.

AI has been named by experts as amongst the biggest trends that will shape the insurance industry in the coming years. When applied in AI Enabled Insurer of the Future

Source: McKinsey & Company

20 INSURANCE ASIA

For most Asian insurance leaders, traditional organisational structures make it difficult to visualise the potential of AI

tandem with human resource, AI’s ability to analyse data quickly and accurately will enable vast amounts of data to be leveraged in efficient and innovative ways. This is the main assertion of business management services company, Accenture, in its Insurance Industry 2023 Outlook.

“What generative AI finally presents for the industry is a very manageably actionable way to start balancing the efficiencies that they’re looking to gain with the experiences that consumers are increasingly demanding in the commercial and in the personal space,” Daria Sharman said in Accenture’s “Insurance News Analysis” segment.

“So when we think about — particularly, I talk about underwriting and the challenges of underwriting — and what generative AI finally does is, it gives underwriters and the actuaries of the world both a strategic and a tactical asset,” added the senior manager for insurance at digital agency, Accenture Song.

In the report “Insurer of the future: Are Asian insurers keeping up with AI advances?” McKinsey & Company noted that investment

in AI is increasingly becoming a source of competitive advantage amongst insurers.

Out of the 1,492 respondents surveyed in December 2022, insurers who reported the most significant gains from AI adoption – 20% or more earnings before interest and taxes – employed advanced AI practices, use cloud technologies, and spend efficiently on AI. More notably, these companies are more likely than others to engage in a range of AI risk mitigation efforts.

Accenture Song’s Sharman echoed this sentiment.

“From a risk assessment perspective on the strategy side, what generative AI does with the machinelearning algorithms is [that it] really speeds up that analysis of the data and leverages those algorithms to truly get to an accelerated predictive modeling capability for forecasting anything from just like a climate casualty to personal behaviour changes,” Sharman said.

Challenges for Asian insurers Whilst some insurers have achieved select wins by implementing AI solutions within individual layers, the transformation required to achieve the full-stack capability that powers the companies mentioned above remains elusive in insurance, McKinsey’s Chung, Jain, and Purushothaman said.

“The first step is to determine how AI can support the organisation’s strategic goals and then assess the organisation’s current state of AI readiness across each of the four layers. A simple scoring methodology can help insurers identify their readiness on a scale from one to five for each layer, with stage five signifying the highest level of AI maturity,” the analysts said.

Another challenge, according to McKinsey & Co, is determining the optimal path forward depending on how far along they are in AI readiness, to reach where they need to

ANALYSIS: ARTIFICIAL INTELLIGENCE client-meeting hours. AI-facilitated policy issuance at this company was more than US$100,000 in 2021, and agent productivity improved, as measured by a 25%-30% increase in net book value per agent.

AI Enabled Insurer of the Future

Violet Chung

Pranav Jain Source: McKinsey & Company

be when it comes to AI maturity and enterprise-wide integration.

“Insurers with in-depth insight into their AI readiness are better equipped for the next step: creating a road map for implementing AI solutions across the front-, middleand back-office functions of their companies,” McKinsey’s Chung, Jain, and Purushothaman co-wrote.

This road map allows company leaders to calibrate expectations as well as the resources, time, and investments needed.

However, whilst each insurers’ journey to AI readiness varies, the end goal remains the same: a more innovative, profitable, digitalforward organisation that meets and anticipates customers’ evolving needs with highly personalised, omnichannel experiences, McKinsey & Co. said.

Personalisation Insurers’ senior management agendas are undoubtedly colored with notes on creating more exceptional customer experiences, which is something that AI could bolster.

“Some Asian insurers have used micro personalisation based on consumer personas to realise gains in overall engagement; nonetheless, most have fallen short of employing dynamic, one-to-one customer targeting to create the personalised, consistent, omnichannel customer experience that characterises mature AI-powered engagement.

In other words, personalisation at scale,” the McKinsey experts said.

In Asia, most large insurers are

halfway along the path of achieving personalisation at scale, they added. These insurers prioritised four key metrics: measurement and attrition; aggregating data into a single platform; application of analytics models to support customer acquisition, cross-selling and sales functions; and delivery of individually curated, personalised content at every interaction and point of contact.

Three models Chung, Jain, and Purushothaman further identified for the McKinsey report three models that Asian insurers can adapt moving forward.

The first is building a digital hybrid agency. As an example, they noted one global insurer who redesigned its agency channel to be AI-ready, and in turn realised an incremental impact of several million dollars over the subsequent years.

Specifically, the insurer reportedly used geospatial network optimisation to identify geography-specific agents' demand and capture growth opportunities and then used this data to inform its local recruitment strategy. Ramp-up time from newly hired agents to full productivity fell significantly, and retention rates rose.

The company did this by adopting a behaviour-driven, next-based action recommendation engine and customised learning plans based on agents’ individual performance.

Another insurer in Asia used AI-based assistants to support online interactions in real-time. This resulted in the insurers recording a monthly average of approximately 100,000

Karthi Purushothaman

Daria Sharman

Insurers with in-depth insight into their AI readiness are better equipped for creating a road map for implementing AI solutions

Bancassurance and ecosystems Apart from using AI to build a digital hybrid agency, insurers may also opt to explore the use of AI in digital bancassurance; or take a leaf out of InsurTech’s books and explore how to embed services in ecosystems.

Bancassurance remains the second-largest channel driving life insurance sales globally, the McKinsey analysts noted. However, due to legacy bank systems, it is perhaps the most challenging to transform.

One way that an Asian insurer transformed its bancassurance service is by using customer analytics and microsegmentation-based customer personas. Based on these analytics, journeys selected were either “fast” (moved directly to the product list) or “long” (with content integration), depending on customer preferences.

Within four to five years, bancassurance penetration almost doubled and first-year premiums increased by 30%-40%, McKinsey said. Several InsurTechs have adopted their own approach in using AI and the digital ecosystem to advance their business, that is, through partnerships.

“Partnerships with leading players — generally the top 15% — to offer select products with simple terms, a short process, and fast and convenient claims can help meet specific user needs for health, auto, life, accident, and other types of coverage,” read the McKinsey report.

“User data analysis can provide insurers with customer insights to inform product innovation and achieve differentiation in the market,” the report also stated.

As an example, the McKinsey analysts cited a leading InsurTech which harnessed its parent group’s platform. Insurance services are embedded in the parent company’s mobile app, which has more than a billion monthly active users.

This InsurTech company then integrated its mobile app’s ecosystem, expanding its distribution channels and providing app users with access to offline medical networks not restricted to policyholders.

INSURANCE ASIA

21

INSURANCE RANKINGS

Singapore Business Review’s Insurance Rankings sees slow growth amongst top 50 The top 50 insurers saw 5.1% growth, marking a slowdown from previous double-digit surge.

Great Eastern topped the Singapore Business Review's Insurance Rankings, with a 4.35% increase in assets

S

ingapore's leading insurers featured in the latest Singapore Business Review's Insurance Rankings witnessed a growth of 5.1%, showing a slowdown compared to the previous rankings characterised by double-digit expansion. The moderation in growth can be attributed to a decline of 23.5% in net income for life insurers, as reported by the Ministry of Trade and Industry, primarily driven by reduced investment income.

The Singapore Business Review Insurance Rankings is the annual list of the top 50 insurers in Singapore by assets. The data is derived from the Monetary Authority of Singapore’s annual statistics with the most recent rankings using data from 2021 and comparing them from a year before.

The annual review of the insurance sector saw 20 life insurers, 24 general insurers, four life reinsurers, and two general reinsurers in the top 50 list.

Great Eastern retained its first place, with a 4.35% increase in assets. AIA also maintained its rank at second place with a 1.72% increase in assets.

Prudential, NTUC Income, and Manulife all retained their third, 22 INSURANCE ASIA

Digital tools have had the greatest positive impact on [consumers’] financial situation

Goh Theng Kiat

Khoo Kah Siang

fourth, and fifth spots, respectively, with Manulife experiencing the greatest asset growth amongst the three at 18.51%. NTUC Income however decreased by 2.32% despite maintaining its fourth rank.

Prudential’s assets increased by 7.84% compared to a year before.

Amongst all the general insurers, NTUC Income’s general insurance business has the highest assets in the rankings at number 13.

This year also saw the return of Singlife to the top 50 at rank 14 and a newcomer, EQ Insurance, at rank 50.

Meeting consumer demands Speaking with Insurance Asia, Goh Theng Kiat, Chief Customer Officer at Prudential Singapore, said that in 2022 they saw more consumers rely on technology for their health and well-being as well as financial stability. In their “Digital for 100: Harnessing technology for longer lifespans” research, they found that 54% of Singapore residents say that mobile devices and apps are critical tools in preparing for rising longevity.

“Of those who are using technology to manage their well-

being, 36% say that digital tools have had the greatest positive impact on their financial situation, and 27% on their personal health. Respondents used mobile apps to monitor their health such as physical fitness, blood pressure and sleep, as well as their bank accounts, CPF and insurance needs,” Theng Kiat said.

This is why Prudential continues to improve its digital health and wellness app, Pulse. Apart from allowing users to assess their health through the Pulse app, it can also help them plan their finances with the use of its AI digital assistant.

Consumers also demanded more choices and expected tailored services to suit their individual needs. Prudential created products such as PRUActive LinkGuard, an investment-linked whole life insurance plan, that allows customers to adjust their coverage, and make regular or lump sum top-ups or partial withdrawals when needed.

For Manulife Singapore CEO Dr Khoo Kah Siang, 2022 saw the need for businesses to develop highly skilled and adaptable workforces and introduce more agile ways of working. Businesses must also find more ways to attract new talent and retain existing ones.

“At Manulife, we introduced an industry-first IBF-certified training programme to upskill our financial representatives and annual learning fiestas for employees to learn more about insurtech, blockchain, artificial intelligence and analytics. Such learning programmes serve to ensure our employees stay ahead of trends that are disrupting the insurance industry,” Dr Kah Siang said.

Reshifting focus As the impact of the COVID-19 pandemic receded, Dr Khoo said that the focus shifted towards climate change and sustainability.

For businesses, this means creating products or strategies for a sustainable business, providing products with longevity, and contributing positively to climate

INSURANCE RANKINGS sustainability. Manulife launched its own Impact Agenda in June last year, which outlined its key social and environmental commitments, in areas where it can have the greatest ability to affect change.

Businesses also saw the value of personalisation and for Ho Lee Yen, CEO of HSBC Life Singapore, this will increase in 2023.

“This is the next evolution of “being where our customers are.”

Organisations that are able to effectively leverage data and analytics to personalise their engagement and solutions will be able to capture mind and market share. In the insurance business, the level of personalisation we can achieve can make a difference in how effectively we can support our customers in reaching their goals in the various aspects of wellbeing,” the HSBC Life Singapore CEO said.

Trends for life insurers Manogna Vangari, Insurance Analyst at GlobalData said that in 2022 some insurers increased their investments in insurtech to improve operational efficiencies and their overall profitability.

“For example, AIA implemented plans to shift 90% of its operations to the cloud by the end of 2022. Prudential Singapore is experimenting with machine learning-based solutions to automate claims and reduce fraudulent practices,” Vangari said.

She advised that insurers, especially life insurers, should focus on insurtech developments to address demographic challenges and provide personalised insurance policies to meet the changing financial demands of customers by offering more flexible insurance coverages.

“In 2023 and beyond, geopolitical tensions, cyber risks, supply chain disruptions caused by Russia and Ukraine conflict, sustainability, and ILS market development will become increasingly pertinent issues and key focus areas for the non-life insurers,” Vangari said.

Lim Siang Thnia, Deloitte Southeast Asia Insurance Sector Leader said insurers will face a volatile geopolitical environment in the current year.

“This will likely affect the investment outlook, particularly for life insurers, consumer behaviour

and also employee expectations.

Hence, insurers need to be agile and adaptable to manage emerging challenges. Some of the value of the prior investments will likely be demonstrated (or not) in the coming year. In addition, adjusting to what is likely to be a hybrid working environment and the challenges it poses, whilst remaining competitive and customer-focused with an eye on the bottom line will be a balancing act that insurers need to manage.” the Deloitte expert said.

Targets for general insurers Ho Kai Weng, Chief Executive of the General Insurance Association of Singapore (GIA) said they are several trends last year that may remain in 2023.

One of them is how workplace and manpower trends such as hybrid and remote working will remain.

“Insurers must adapt to the office of the future. A strategic approach to training and upskilling talent will be critical to ensure that insurers remain competitive in the global talent war,” Kai Weng said.

In Singapore, most senior executives have prioritised employee engagement and retention strategies over consumer behaviour or geopolitical concern. However, only 30% are prepared to respond to a dearth of talent and skills availability, a study by Russell Reynolds Associates revealed.

“The tech layoffs of late 2022 may create new opportunities for insurers to grow their ranks, something previously challenging given the shortage of tech talents. Insurers with particular requirements for new skills in technology can leverage the

Ho Lee Yen

Manogna Vangari

Lim Siang Thnia

Ho Kai Weng

availability of skilled tech talent to support their digital transformation roadmaps,” Kai Weng advised.

General insurers should also expend efforts in providing cyber insurance to small and medium enterprises (SMEs). A report by QBE revealed that 42% of SMEs in Singapore have indicated that they conduct seven to eight processes online but lack basic protection for these technologies. 21% of SMEs have also said that they have been ‘hacked into’ at some stage back in 2019.

“This is worrying given that SMEs account for 99% of businesses in Singapore and employ more than 70% of the workforce. Any largescale cyberattack would potentially mean widespread losses. This, hence, underscores the urgency for insurers to step up efforts and educate businesses on the importance of cyber insurance,” Kai Weng said.

Kai Weng added that since the pandemic, greater awareness towards protection has been prevalent amongst consumers.

“At the back of an uncertain macroeconomic environment, sustained inflationary pressures, increasing sophistication of cyber threats, and climate change, there will no doubt be a new wave of challenges posed for insurers. Against this volatile landscape, there is a need to adjust operations accordingly to cope with the unknown as this could mean large and unexpected liabilities and the consequent increase in claims and costs. With this trend, therein exists an opportunity for insurers to innovate and deliver products with strong value propositions that meet these,” Kai Weng said.

In 2023 and beyond, geopolitical tensions, cyber risks, supply chain disruptions, and sustainability will become key focus areas for non-life insurers

INSURANCE ASIA

23

INSURANCE RANKINGS LIFE

2022 Total Assets (SG$) $72b

2021 total assets (SG$) $69b

LIFE

$59b

$58b

LIFE

$55b

$51b

4

LIFE

$43b

$44B

5

LIFE

$32b

$27b

TOKIO MARINE LIFE

8

LIFE

$12b

$11B

SINGAPORE LIFE

14

LIFE

$11b

$1b

8

HSBC INSURANCE

7

LIFE

$11b

$11b

2023 Rankings

Insurance Company

2022 Rankings

Classification

1

GREAT EASTERN LIFE

1

2

AIA SPORE

2

3

PRUDENTIAL

3

4

NTUC INCOME

5

MANULIFE

6 7 9

AXA INSURANCE

9

LIFE

$5b

$5b

10

ETIQA PL

11

LIFE

$4b

$3b

11

TRANSAMERICA

10

LIFE

$3b

$3b

12

QUILTER INTERNATIONAL

12

LIFE

$2b

$2b

13

NTUC INCOME

13

GENERAL

$1b

$2b

14

SINGLIFE*

-

LIFE

$1b

-

15

FRIENDS PROVIDENT

16

LIFE

$1b

$1b

16

SWISS LIFE

15

LIFE

$1b

$1b

17

ST. JAMES'S PLACE

20

LIFE

$1b

$847m

18

MUNICH RE

17

LIFE/REINSURER

$1b

$924m

19

FIRST CAPITAL

18

GENERAL

$949m

$920m

20

ZURICH INTERNATIONAL

19

LIFE

$919m

$877m

21

CHINA TAIPING

22

LIFE

$810m

$550m

22

CHINA REINSURANCE

46

LIFE/REINSURER

$746m

$156m

23

SWISS RE ASIA

42

LIFE/REINSURER

$645m

$214m

24

AXA INSURANCE

23

GENERAL

$573m

$550m

25

MSIG

21

GENERAL

$561m

$592m

26

INDIA INTERNATIONAL

24

GENERAL

$534m

$542m

27

CHINA LIFE

26

LIFE

$508m

$510m

28

AIG ASIA

23

GENERAL

$497m

$528m

29

CHINA TAIPING

30

GENERAL

$444m

$386m

30

TOKIO MARINE INS

27

GENERAL

$444m

$448m

31

CHUBB INS

29

GENERAL

$424m

$404m

32

LIBERTY INSURANCE

28

GENERAL

$424m

$408m

33

LLOYD'S ASIA SCHEME

31

GENERAL

$390m

$350m

34

UTMOST WORLDWIDE

32

LIFE

$373

$297m

35

GEG

33

GENERAL

$314m

$269m

36

CIGNA EUROPE

40

GENERAL

$263m

$191m

37

UOI

34

GENERAL

$247m

$238m

38

XL INS

36

GENERAL

$230m

$227m

39

SOMPO INS

37

GENERAL

$227m

$219m

40

QBE INS

35

GENERAL

$225m

$232m

41

ALLIED WORLD

38

GENERAL

$207m

$217m

42

FACTORY MUTUAL

42

GENERAL

$194m

$179m

43

RGA INTL

43

LIFE/REINSURER

$192m

$174m

44

ALLIANZ GLOBAL C&S

41

GENERAL

$192m

$185m

45

ETIQA PL

45

GENERAL

$174m

$161m

46

SINGAPORE RE

44

GENERAL/REINSURER

$171m

$173m

47

BERKSHIRE

49

GENERAL

$148m

$173m

48

LIBERTY SPECIALTY SINGAPORE

50

GENERAL

$138m

$129m

49

SWISS RE ASIA

39

GENERAL/REINSURER

$137m

$214m

50

EQ INS*

-

GENERAL

$135m

-

TOTAL

$329b

$313b

5.1% increase from last year’s rankings *Previously not on the top 50 lists

24 INSURANCE ASIA

**Numbers derived from MAS data.

INSURANCE ASIA

25

INSURANCE RANKING

Life insurers take the lead in latest Hong Kong Business Insurance Rankings Some life insurers saw their assets surge by as much as 44%.

AIA International is the top insurer for the Hong Kong Business' 2023 Insurance Rankings

H

ong Kong’s insurance industry is undergoing a significant shift as the Hong Kong Business Insurance Rankings reveal a trend towards more life insurers joining the list of the top 50 insurers. This shift can be attributed to the opportunity in the Mainland China insurance market.

According to a report by GlobalData, despite the decline in demand from Mainland visitors in 2021 due to travel restrictions, a significant proportion of whole life insurance premiums came from Chinese visitors who purchased their policies from Hong Kong prior to the pandemic due to favourable terms and greater flexibility offered to them as compared to policies sold in China.

For the most recent rankings, a total of 30 life insurers made it onto the top 50 list, higher compared to 20 general insurers. This is different from the previous rankings when the top 50 list had an equal number of life and general insurers.

The Hong Kong Business Insurance Rankings is an annual list of the top 50 insurers in Hong Kong. It is based on data from the Insurance Authority’s statistics, with the most recent rankings using data from 2021 and comparing them to the 2020 data.

26 INSURANCE ASIA

The goal for 2023 and beyond should be to better optimise the benefits of technology investments

Billy Wong

Cecilia Chang

The rankings revealed that the total assets of the top 50 insurers surged by 1.13% reaching $717b in 2021 compared to $706b in 2020.

This is comparatively lower than the 9.75% increase last year, however, the increase in 2021 is due to a lower base caused by lockdowns during the early days of the COVID-19 pandemic.

Holding the number one spot is AIA International, which saw its 2021 assets climb by 2.38% to $129b compared to $126b in 2020.

Manulife (Intl) leapt from fourth to claim the second spot as its assets surged by 44.44% to $91b in 2021 compared to $63b in 2020.

Prudential (HK) Life, meanwhile fell to the third rank after its 2021 assets declined to $87b from $92b in 2020. China Life also went down one place as its assets decreased to $62b from $67b.

HSBC Life retained its spot at number five but saw its assets climb to $56b from $54b.

Out of all general insurers, BOC Group Insurance saw the biggest asset increase to $18b in 2021 from $4b in 2020. It also saw its rank rise from 23rd to 12th for this year’s rankings. Meanwhile, the list also saw newcomers to the top 50, with AIA Everest leading the way at $6b, ranking 16th amongst the top 50.

Inflation and consumer cutbacks Inflation continues to pose challenges for both insurers and consumers.

For life and retirement insurers, this means increasing rates which can reduce reinvestment risk and make rate guarantees more cost-effective from an economic perspective, according to Billy Wong, Insurance Leader at PwC Hong Kong.

However, too sharp a rise in rates could introduce disintermediation risk, negatively impacting balance sheets. To mitigate this risk, insurers may need to frequently reset rate guarantees and pricing to respond to market pressure on book value guarantees.

Higher interest rates may also make certain product types less appealing to consumers, Wong warned. A report by YouGov found that 14% of Asia Pacific consumers would cut back on insurance first when household budgets are tight.

In Hong Kong, 16% said they would reduce spending on insurance.

Higher interest rates coupled with fluctuating equity markets may also make certain product types less attractive. Wong advised insurers to consider rebalancing portfolios, possibly moving back to more traditional investments and relying less on alternative asset classes.

Return of MCVs The opening of borders in 2022 also saw the return of Mainland Chinese Visitors (MCVs). Most Hong Kong insurers rely on MCVs for the purchase of life insurance policies.

In the latest survey by the Insurance Authority, 81% of Hong Kong’s visitors from January to September 2022 were comprised of MCVs, leading to a 150% increase in new business premiums in H1 2022.

“Overall, GlobalData estimates Life GWP to grow by 4.5% in 2022.

With Greater Bay Area (GBA) initiatives gaining momentum, higher M&A activity was seen in 2022. Insurers view GBA as a gateway to Hong Kong and China and will

INSURANCE RANKING

Erik Bleekrode

Leslie Foo

Life insurers dominate the top 50 Insurance Rankings

utilise this opportunity to expand their customer base. The inclusion of preferential treatment as part of Mainland-based insurers’ solvency regulation will encourage them to expand their business and cede more to Hong Kong-based reinsurers due to the availability of greater capacity.

And this in turn will further develop Hong Kong as a reinsurance hub,” GlobalData Insurance Analyst Sravani Ampabathina said.

After-sales service centres In 2022, the government of Hong Kong announced its decision to strengthen its status as a financial hub, including the insurance industry. One of the ways proposed to achieve this goal is by leveraging its status as part of the Greater Bay Area (GBA).

Given that most insurers in Hong Kong rely on MCVs, the government announced plans to build aftersales service centres in Nansha and Qianhai as part of the Insurance Connect initiative in the GBA. This makes it easier for Mainland China policyholders to make claims. In its initial phase, Insurance Connect first allowed the direct settlement of health claims at public hospitals in Shenzhen with Hong Kong and Macau insurers. It also enables Hong Kong insurers to establish customer service centres in the GBA. PwC’s Billy Wong said that the establishment of insurance aftersales service centres in the GBA will greatly enhance Hong Kong insurers’ ability to service policyholders who live on the mainland.

“This would also be a significant milestone in the overall insurance development as set out in the GBA Outline Development Plan and for wider and deeper collaboration among the insurance players in the GBA,” he added.

Meanwhile, Erik Bleekrode, Head of Insurance at KPMG China & Asia Pacific, has a more restrained view of these centres as he believes it is still difficult to judge the impact of these centres until the Hong Kong regulators issue the next round of regulations and guidelines.

“Some insurers in Hong Kong without a China license had hoped that this would allow greater access to sell insurance in the mainland in the long term but that is not the case under current regulation,” Bleekrode said.

Creating opportunities Different challenges offered insurers a chance to innovate and adapt. According to Cecilia Chang, CEO of Generali Life Hong Kong and General Manager of Assicurazioni Generali S.p.A. Hong Kong, one of the most significant changes they went through was the severe drop in face-to-face interactions beyond the household.

Generali leaned on partnerships to continue to remain profitable, such as their bancassurance partnership with virtual bank, ZA Bank - a first of its kind in Hong Kong.

“Generali products and offerings were integrated into the ZA Bank app, streamlining a wide range of processes, from product discovery to contacting our insurance

Joanna Wong

From a pricing perspective, one key focus of insurers is to embed the longer-term market trends into the generally shorter-term nature of the products

advisors. All contact points and queries could be managed within the app in just a few clicks, making our services accessible to customers anytime, anywhere, and in a way that best suits them. Through this partnership, we have been able to empower our customers to make decisions concerning their health and protection, at their own time and convenience,” Chang said.

“In Hong Kong, there has been an accelerated adoption of digital channels among customers, who are growing more comfortable looking online or to virtual platforms for solutions. This continues to be perpetuated given prevailing concerns around COVID-19 and social distancing measures, which have changed people’s daily habits and lifestyles,” Chang said.

2023 focus With all these trends and predictions, what should insurers focus on this year?

Joanna Wong: Customer-centric technology transformation - The goal for 2023 and beyond should be to better optimise the benefits of technology investments to enable insurers, particularly in this part of the world where we have observed varying degrees of maturity and digital adoption of increasingly agile, innovative, and customercentric solutions.

Insurers must set their sights beyond compliance concerns to make ESG a competitive differentiator.

Leslie Foo: Insurers have to reinvent their human capital strategy to nurture a digital, innovative, yet diverse and inclusive culture that attracts and retains talent.

Erik Bleekrode (Asia view): Companies should focus on customers, customer experiences, and propositions. There will be a need to understand how ESG will change the way insurers are run and managed. Insurers should also look to develop their health and well-being propositions. Finally, insurers should also look to develop their affinity and partnership networks to create an ecosystem that will give them access that will give them access to greater customer numbers and make them more accessible to customers.

INSURANCE ASIA

27

INSURANCE RANKING Long term or life business

2022 total Assets (HK$) $129b

2021 total assets (HK$) $126b

Long term or life business

$91b

$63b

2

Long term or life business

$87b

$92b

3

Long term or life business

$62b

$67b

HSBC Life

5

Long term or life business

$56b

$54b

6

FWD Life (Bermuda)

9

Long term or life business

$47b

$28b

7

BOC LIFE

6

Long term or life business

$37b

$39b

8

AXA China (Bermuda)

8

Long term or life business

$34b

$30b

2023 Rankings

Insurance Company

2022 Rankings

Classification

1

AIA International

1

2

Manulife (Int'l)

4

3

Prudential (HK) Life

4

China Life

5

9

TPLHK

10

Long term or life business

$23b

$20b

10

Hang Seng Insurance

11

Long term or life business

$21b

$18b

11

Sun Life Hong Kong

7

Long term or life business

$19b

$32b

12

BOC Group Insurance

23

General Business

$18b

$4b

13

FTLife

12

Long term or life business

$14b

$13b

14

YF LIFE

13

Long term or life business

$9b

$10b

15

Bupa

14

General Business

$6b

$10b

16

AIA Everest*

-

Long term or life business

$6b

-

17

AXA General

15

General Business

$5b

$9b $4b

18

Chubb Life

20

Long term or life business

$5b

19

AXA China (HK)

22

Long term or life business

$4b

$4b

20

HKMC Annuity

32

Long term or life business

$3b

$3b

21

Hong Kong Life

19

Long term or life business

$3b

$4b

22

AIA International

21

General Business

$3b

$4b

23

CTPI(HK)

17

General Business

$2b

$6b

24

Blue

40

Long term or life business

$2b

$2b

25

FWD Life (HK)

18

Long term or life business

$2b

$4b

26

Blue Cross

34

General Business

$2b

$3b

27

Quilter International*

-

Long term or life business

$2b

-

28

Generali

24

General Business

$2b

$3b

29

Zurich Insurance

27

General Business

$2b

$3b

30

CIGNA Worldwide General

33

General Business

$2b

$3b

31

Swiss Re (Asia)

25

General Business

$1b

$3b

32

Zurich International

44

Long term or life business

$1b

$2b

33

Liberty Int'l

34

General Business

$1b

$3b

34

AXA China (HK)

35

General Business

$1b

$2b

35

TLIC

28

Long term or life business

$1b

$3b

36

AIG Insurance HK

29

General Business

$1b

$3b

37

Fubon Life Hong Kong

31

Long term or life business

$1b

$3b

38

QBE HKSI

26

General Business

$1b

$3b

39

CIGNA Worldwide Life*

-

Long term or life business

$1b

-

40

AIA (HK)

49

Long term or life business

$1b

$1b

41

Prudential (HK) General

37

General Business

$1b

$2b

42

Principal*

-

Long term or life business

$998m

-

43

Allied World

42

General Business

$918m

$2b

44

SJPI(HK)L*

-

Long term or life business

$862m

-

45

Chubb Insurance

41

General Business

$855m

$2b

46

Target

39

General Business

$844m

$2b

47

TPRe

38

General Business

$817m

$2b

48

Peak Re *

-

General Business

$808m

-

49

Heng An Standard Life Asia*

-

Long term or life business

768m

-

50

Well Link Life*

-

Long term or life business

$763m

-

TOTAL

$717B

$709B

*new to the top 50 rankings

28 INSURANCE ASIA

**data from Hong Kong’s Insurance Authority

1.13% increase from previous year’s rankings

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29

EVENT: INSURANCE ASIA FORUM

Zurich Malaysia reaches for positive impact in sustainability

The company's 2023-2025 framework aims to drive transformative change and create a positive impact on the planet, people, and customers whilst fostering net-zero initiatives. of “fairness, transparency, and accountability.” Its last pillar is attaining work sustainability. This translates to increased gender diversity within high-rank roles, continued increase of learning hours, a hybrid work set-up, and improved employee satisfaction.

Panel discussion on the future of digitalised and sustainable insurance at the Insurance Asia Forum in Kuala Lumpur

MALAYSIA

S

wiss insurer Zurich Malaysia took centre stage at the 2023 Insurance Asia Forum in Kuala Lumpur, spreading the value of sustainability and its positive implications for Malaysians in the years to come.

Sharing insights into the company’s enduring commitment to a zerocarbon emissions future at the forum on 24 May was Teresa Wong, Zurich’s Chief Risk Officer covering the General Segment who is also Head of Sustainability Risks.

Wong said Zurich has embraced a comprehensive 2023-2025 framework that aims to drive transformative change and create a positive impact on the planet, the people, and the customers. At the core of this framework is a focus on interconnected goals, including achieving net-zero emissions and promoting a positive environmental footprint whilst ensuring the resilience of the planet and society.

The company has established three pillars to guide its sustainability efforts.

The first pillar revolves around a commitment to a 1.5-degree Celsius future. This entails avoiding involvement in greenfield oil exploration projects, completely

30 INSURANCE ASIA

Zurich gives importance to establishing trust in a digitalised society

Teresa Wong

phasing out coal from its underwriting portfolio, and refraining from engaging in oil and gas drilling and production in the Arctic region.

According to Wong, Zurich has been on track to reaching this pillar and has made advancements sooner than expected. “We are hitting 1.5 degrees Celsius [Paris commitment] probably this year or next year,” she said during the panel discussion.

Building upon the achievements of the first pillar, Zurich has set additional goals focused on reducing carbon emissions in both investments and operations. As part of this commitment, the company has introduced the Carbon-Neutral Fund and other environmental, social, and governance (ESG) funds tailored to its life clients.

Moving to the second pillar, Wong said Zurich gives importance to establishing trust in a digitalised society. The company has made significant progress towards fulfilling its global execution data commitment, approaching full implementation worldwide.

Also, Zurich is dedicated to adopting an assurance framework guided by artificial intelligence (AI) that adheres to ethical principles

Targeting the key areas According to Wong, Zurich was able to conceive its framework on sustainability from a materiality assessment in 2022.

“We’ve conducted entirely, with all the necessary stakeholders from each business function and drew up the metrics to state where we should look and what the risks were,” the Zurich expert said.

The sustainability framework 2023-2025 – implemented across regional offices – is based on the previous three pillars which now focus on customer, planet and people sustainability.

The framework to be implemented pivots on achieving net-zero actions or nature-positive outcomes, becoming a global employer with an upskilled inclusive workforce, and collaborating with customers to insure the transition whilst pushing for sustainable living, the Zurich expert said.

By recognising the interconnectedness of three core focus areas, Zurich aims to develop innovative underwriting and claims solutions that not only benefit its customers but also contribute to the well-being of people and the planet.

Through responsible investment practices, the insurer strives to enhance the positive impact generated by its invested assets.

In addition, their strategic community investments, facilitated by the Z Zurich Foundation, are also dedicated to building a brighter future for the most vulnerable members of society.

Read the full event coverage at https://insuranceasia.com/

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31

OPINION

PAUL TSE

Embrace technology, elevate experience: The future of personalised insurance

H

ong Kong’s insurance industry is at the forefront of an exciting transformation. With a surge of young, tech-savvy customers demanding more agile solutions and real time responses, traditional sales channels will need to adapt to emerging technologies to succeed. The market has changed; modern-day consumers are taking the initiative to search for insurance products online and tend to self-serve with instant Artificial Intelligence (AI) empowered tools.

Gartner’s 2023 survey has revealed the industry will be prioritising customer experience-centric technology over other strategic focuses.

To stay ahead of the competition, insurers must move with the times and leverage insurtech advancements to provide the innovative, one-stop-shop services that consumers are looking for. So, how does digitalisation enhance and accelerate the customer experience?

1. Personalisation keeps customers engaged In today’s digital world, customers demand ‘tailored’ experiences in every aspect of their lives – insurance is no exception.

Personalisation has become essential in enhancing the dynamic user journey. By harnessing the power of AI together with advanced data analytics and management, insurers can better capture customer preferences and tactically cater to the unique protection needs of individual customers.

At the research stage, self-service assessment tools can instantly provide recommendations of potential insurance plans and premium settings. At the purchase or after-sales stages, additional insights can be shared by using AI for speech and text analytics to enhance customer interactions. It’s not just about offering the right coverage – it’s about creating a distinctive, enjoyable, and personalised experience that makes an impression and connects customers with the insurance brand.

2. Share the same value as your customers and deliver a dynamic experience to impress them Insurance is not just about protecting assets or health – it’s about delivering an enhanced customer experience. With 59% of the global respondents to a Bain & Company survey wanting insurers to reward them for healthy living, individuals are placing greater emphasis on health and well-being activities. They are also more purpose-driven, focusing on wellness, lifestyle enrichment and even dream fulfilment when it comes to insurance purchases. This presents a significant opportunity for insurers to think outside the box and come up with innovative means of interacting with and educating customers.

By launching a crossover and multi-dimensional campaign that resonates with people’s life passions and empowers them to pursue their dreams, insurers can inject a much-needed sense of positivity that is amplified through different media. In addition, these campaigns also help with changing the way people feel about insurance – going beyond

32 INSURANCE ASIA

PAUL TSE Chief Marketing and Digital Officer, Hong Kong, Macau, FWD

a pure risk management service to life empowerment. Leveraging celebrities and different campaigns also help build awareness to keep customers engaged and enhance loyalty.

3. A multi-touchpoint insurer accelerates the customer journey from purchase to claim.

According to a report by Meltwater, around 91.3% of Hong Kong's adult population are users of social media by the beginning of 2023. This suggests that social media advertising is an influential approach to driving business consideration, and it highlights the importance of expanding to multiple marketing channels.

Leading insurers are investing in online platforms and mobile applications, making access to support instant with just one click.

Digitalisation has made insurance services, such as quoting, claims procedure, and enquiries, more convenient as they can be done anytime, anywhere.

With brochures and policies readily available online or in-app, customers have better visibility from the start. After purchase, claims are automatically scanned and approved with a few clicks in-app or online. This speeds up the claims process and enhances the journey with high service quality and efficiency – leading to customer satisfaction and loyalty.

Thanks to the power of technology, the insurance industry is on the brink of a paradigm shift in customer engagement. Companies are rapidly adopting advanced algorithms and cutting-edge tools to offer personalised and diversified experiences across multiple channels.

But it's the fusion of human and technology-driven service that truly set the gold standard, delivering a truly customer-led, digitallyenabled user experience. While a sleek online interface is important, it's the human touch that adds an extra layer of magic, creating a customer journey that is both memorable and meaningful.