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Insurtech shakes up insurance industry

Companies race to improve convenience for customers with apps and programs.

"The main problem our industry faces is that people think life insurance is complicated, and that it is a hassle to find the right solution." - Walter de Oude, CEO of Singapore Life.

"Traditional insurance industry has been very complex, high overhead costs, and a lack of transparency for the end-consumer." - Val Yap, director of PolicyPal.

AGE-OLD insurance companies are facing disruption from emerging startups less than half their age, as insurtech companies leverage technology to plug the gaps in the insurance space.

Traditional insurance companies in Singapore are acknowledging this disruption. Many see it as an opportunity for innovation and improvement, and hope to leverage this technology to retain their customers.

Insurtech companies strive to fill the gaps in the insurance industry, such as tackling the hassle of choosing from a multitude of insurance policies.

"The main problem our industry faces is that people think life insurance is complicated, and that it is a hassle to find the right solution," said Walter de Oude, CEO of Singapore Life, an insurtech company.

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"Singapore Life's investments in insurtech make us nimble and efficient. Some call that disruption. We think it's just changing the way things work so that customers can benefit."

To make things more convenient, Singapore Life allows its users to buy a policy either through an advisor or an online platform, which makes the process quicker.

Mr de Oude said: "The intent for Singapore Life and its usage of insurtech and available sources of data is to ensure greater inclusion and protection for our customers. We think that a lot of people do not have enough cover and have been putting it off because of the hassle."

Another insurtech startup PolicyPal helps individuals manage all their existing insurance policies through an app. To input their policies into the application, consumers take a picture of the summary page of their existing policies, and the relevant details will be captured and digitised. Consumers can contact their relevant insurers through the app and will be notified of upcoming payments.

PolicyPal director Val Yap said: "Traditional insurance industry has been very complex, has high overhead costs, and lacks transparency for the end-consumer. This results in higher premiums being borne by consumers. The insurance distribution has traditionally relied on a commission-based variable cost model for sales, and the usual tactic to increase sales was to put more sales agents on the street."

A PwC Global FinTech report last year showed 74 per cent of insurers predict disruption in their businesses over the next five years, but only 43 per cent have fintech at the heart of their corporate strategy.

Still, this appears to be changing. Angela Hunter, chief customer officer of Prudential Singapore, said: "We view fintech players as more of an opportunity than a threat. The agility and creativity of fintech players, combined with the scale and financial strength of traditional financial service institutions, can create huge synergies to benefit the economy and the consumers."

In the past one year, Prudential has invested significantly in new technologies - such as robotics, artificial intelligence and data analytics - to boost the customer experience. Its financial consultants are the first in the industry to use a cognitive-powered chatbot named askPRU that provides real-time information specific to the customers' life insurance plans.


Insurance firms are also open to finding fintech partners to collaborate. AXA Insurance has AXA Labs based in Shanghai and San Francisco identify emerging trends and new customer needs.

AXA Strategic Ventures, AXA's dedicated fintech and insurtech investment fund, has invested in around 20 startups in the insurance and asset management industries, said Celine Le Cotonnec, director of data and innovation at AXA Insurance. These companies are in the field of connected health, artificial intelligence, user interface and big data.

Chris Wei, executive chairman of Aviva Asia And Friends Provident International and global chairman of Aviva Digital, agrees that insurers need to change the way they work to stay relevant in the industry. "We are committed to being a disruptor in our own industry, starting with making changes on the inside," he said. "We've also hired game developers, motion designers, customer experience gurus and world-class app developers to rethink the way we do things as we take our customers on a digital journey."

Aviva will invest more in its digital and analytics capabilities, such as having digital garages - akin to the corporate innovation lab - that explore new insurance ideas.

Some insurance companies, such as Great Eastern, are also aiming to make the process of insurance less troublesome. Great Eastern has automated the processes in its medical claims workflow. This has reduced the claim-processing cycle by half, from two to three days to just one day.

As insurance companies aim to improve the experience for their customers, such as by making it more convenient, they raise their use of data analysis.

At Prudential, data is used to design programmes. It partnered Prenetics, an Asian genetics-testing company, to launch the myDNA programme. It involves the use of a simple saliva test which reveals how an individual's genes may affect his or her nutritional needs, dietary sensitivities and fitness level. For instance, individuals can find out whether they are more sensitive to carbohydrates, fats and alcohol, as well as which exercises may be best for them, said Ms Hunter.


In a report by Accenture, the number of insurtechs focusing on analytics or Big Data has almost tripled in two years. But by sieving out groups of people using Big Data, there are lingering concerns are that Big Data can result in exclusivity, where some people are left out because they do not fit a particular profile.

But insurance companies - both insurtech and traditional insurance companies - do not view it the same way. Hong Leong Assurance Singapore uses data to customise insurance packages to its customers.

"We believe in putting together products that consumers will need and data only serves as an analytical tool in our process," said Kelvin Lim, CEO of Hong Leong Assurance Singapore. "The data we have will not cripple the essence of insurance. Instead, we use it to enhance and facilitate our processes. It is about how we make use of data and analytics that will allow us to create a difference."

Jan-Philipp Kruip, founder of insurtech FitSense, said: "Our key principle is transparency. We never access user data without explicit consent, and we always make sure that the user understands what we do with the data, whom we share it with and to what purpose . Thankfully, data regulation is swiftly moving in the direction to make this an international standard."

Abhishek Bhatia, CEO of FWD Insurance, believes that the use of Big Data will continue to rise, and that companies that do not use Big Data will ultimately lose out.

"The use of Big Data in the insurance industry has been primarily limited to sales and marketing initiatives, with insurers continuing to use traditional data points for pricing and underwriting," he said. "However, there is little doubt that the industry is becoming more sophisticated, and that the future will see further advances in the use of Big Data."