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2017 yearender: Patrick Teow: President, Life Insurance Association

Sit with a planner to safeguard future

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Big data analysis and machine learning allows insurers to leverage data, enabling the insurance industry to calculate premiums more precisely and creating huge opportunities in defining product segmentation, says Patrick Teow.

Q What were the best and worst things that happened to you (financially) this year?
A
Applying the concept of a long-term horizon for investments, nothing significant has happened for me personally in the past year. Being judicious with my financial portfolio has always been my personal mantra to managing assets, and I believe this advice has served me well in all of my 30 years in this industry.

My approach to wealth and investment is to always be astute and back up your investment instincts with ample research when navigating markets. If something sounds too good to be true, be cautious, it usually is.

The growth of the insurance industry today has been very encouraging and points to the Life Insurance Association's (LIA) core focus of bridging Singapore's protection gap. Ensuring Singaporeans have adequate protection is especially critical at a time of rapid demographic shifts and our ageing population.

Q How has this year been for your industry?
A
2017 has seen strong growth, and while our industry has not been as quick to adopt digitisation and fintech like our banking counterparts, we have witnessed changes as life insurers embrace the use of digital innovations and data.

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Consumers have a high inclination towards mobile and tech-based services as their expectations have changed dramatically, and they increasingly expect a seamless experience. In that regard, our member companies are actively engaged in the Smart Nation initiative to leverage big data and analytics to better understand, connect and engage with customers through different touch points, so that we are able to bridge our nation's protection gap.

The Health Insurance Task Force's (HITF) report initiated by the LIA last year has served as an impetus, leading to the Health Ministry's move to study its recommendation for a fee benchmark of medical practitioners' fees in Singapore.

This is a critical effort to help us effectively manage escalating healthcare costs, which translates into bigger insurance claims if left unchecked. With the transparency provided by a fee benchmark, consumers are empowered to make informed choices regarding their selection of medical practitioner and medical treatment options.

The LIA and its members will continue to work with the Health Ministry on the various HITF recommendations for the benefit of consumers and to ensure an affordable and sustainable healthcare ecosystem.

Q How do you see next year panning out?
A
We remain cautiously optimistic that 2018 will be a good year, riding on strong, robust momentum and growth seen this year.

The industry will continue to evolve. We will likely see members who might venture into creative ways of marketing insurance directly to consumers, as direct-to-consumer insurance purchases gain acceptance here. We expect member firms to leverage technologies like artificial intelligence and robotic process automation to improve effectiveness and efficiency.

The Internet of Things will produce massive amounts of data. Big data analysis and machine learning will allow us to leverage data, allowing the insurance industry to calculate premiums much more precisely and creating huge opportunities in defining product segmentation.

These trends are evolving at a speed that presents a big challenge for businesses to keep up with. With innovations transforming the way we operate, some jobs may become obsolete with these changes, and new jobs will also be created.

The LIA is completing its "Protection Gap Study", which has also included a view on critical illness coverage, which we will be happy to share early next year. The study will provide fresh insights on what the industry has to do to help Singaporeans be better covered and protected in the light of their evolving protection needs since the last study was done in 2012.

Q Going into next year, please offer some tips to consumers.
A
Do not underestimate the importance of proper financial planning, to plan and protect your future and that of your loved ones.

People are living longer, but there are also financial challenges with greater life expectancy. It is important that while we work hard for money, your money is also working hard for you - by ensuring that you are putting it in the right places, whether it is for health insurance, protection or investments.

Being financially unprepared in the face of an emergency can be one of the worst things to experience. Whether you are hospitalised or faced with a critical illness, you would want peace of mind to know you are well covered. With escalating healthcare costs and increased prevalence of chronic illnesses, making sure you and your loved ones have adequate health insurance has never been more important.

So my advice is to sit with a good financial planner to address your needs and gaps. In fact, make it one of your New Year resolutions to plan with someone, to guard yourself from uncertainties and safeguard your future.

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