LEGACY systems have worked well in the insurance industry for decades but not anymore, and certainly not in today’s climate. Even in a digital age, applicants and policyholders are put through reams of paperwork in order to be risk-assessed before being insured. With increasing use of mobile devices, there already is a natural gravitation of would-be customers towards providers that allow their products to be purchased digitally.

Covid-19 was the wake-up call as consumers found it challenging to purchase insurance via age-old processes during periods of restricted movement and lockdowns, rendering current onboarding processes obsolete. Whilst most insurance companies have quickly pivoted to various forms of digital solutions during the pandemic, not all have embraced smart technology.

The role of insurance is to provide coverage so that in the event of disability, critical illness or death, the insured and their family members and dependants have access to liquidity. People in Singapore are under-insured : According to the Life Insurance Association’s Protection Gap Study 2017, the combined protection gap for mortality and critical illness in Singapore is around S$893 billion. Using smart technology to facilitate the insurance purchase process can help reduce current protection gaps here.

Buying insurance requires one to provide a significant amount of information to the insurer during the application process. The questions posed are either required by law or necessary to categorise each applicant according to various risk pools based on age, gender, lifestyle, and medical history. This allows underwriters to determine an equitable premium based on the risk profile of each applicant.

Risk classification can help to avoid the need to cross-subsidise. These processes alone usually account for a series of 10 to 20 questions. Despite the difference in premiums and customer risk profiles, insurers generally have similar sets of questions in the application journey. Hence, can we harness technology to achieve better results? Enter smart technology.

Here are six ways where smart tech can make the insurance buying process easier:

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1. Customise risk underwriting questions: With smart technology, not only can the 10-20 questions be trimmed down, they can also be customised for each client. From first-hand experience, I have been able to reduce the number of questions for a healthy individual to just three; the number would vary based on each client’s risk profile.

2. On-the-spot underwriting decisions: Singapore has arguably one of the best healthcare systems in the world and it is not uncommon for Singaporeans to undergo regular medical checkups, particularly if they are above 40 years of age. Common ailments such as diabetes and cholesterol issues are easily detected during such routine health checks. That type of information is usually required during the insurance application process. Unfortunately, customers with ailments tend to have to wait a longer time, from days to even weeks, to get approval from an insurer -- this can be frustrating. But with smart technology, insurers can provide a decision immediately.

3. Use of regulatory technology: As part of the country’s Smart Nation programme, the Monetary Authority of Singapore has developed MyInfo, which is provisioned under Singpass. Through MyInfo, an insurance application today would not need a copy or photo image of an individual’s NRIC as the identity information can be electronically accessed. MyInfo can be integrated into an insurance company’s product journey through application programming interface integration.

4. Direct electronic bank transfers: Traditionally, customers would need to complete a physical general interbank recurring order (GIRO) form for the premium payment. However, the approval is not immediate. Recently, the Association of Banks in Singapore has piloted, along with insurance firms and banks, a centralised platform where such premium deductions can be instructed electronically by various banks here.

5. Hyper-personalisation: With the use of data, it is possible to hyper-personalise offers. This allows customers to receive relevant offers and improving their experience. ­­­­

6. Goal simulation: With inflation and market volatility, it is crucial that clients can stress-test their portfolios to assess whether they are on- or off-track in adhering to their financial goals. With smart technology, this can be done in an instant, enabling the customer and their financial advisers to make informed choices and decisions faster.

In Singapore, smart technology innovation is simplifying the insurance purchase journey. It is time for insurers to do the same. As an industry, we should relook at how to address customer pain points. It will go some way to help Singaporeans attain adequate insurance protection for their families and themselves.

The writer is general manager, FWD Singapore Life Business