Four insurance trends that could impact you
Insurance plays an essential role in building financial resilience in society. BY HARPREET BINDRA
THE life and health insurance landscape in Singapore is rapidly evolving. Customer needs and preferences are changing, and emerging technologies are reshaping insurers’ business models.
Life and health insurance can be a long-term financial commitment, and perhaps the most important financial decision we make in our lives. Hence, it is important to stay on top of these emerging trends. In this article, I highlight four key trends.
1. Protection, the fundamentals of insurance
With increasing wealth and affluence, there is more at stake – more that needs to be protected. Yet, the mortality and critical illness protection gaps in Singapore remain significant. The latest update from the Life Insurance Association Singapore’s 2022 Protection Gap Study puts the mortality and critical illness protection gap at S$373 billion and S$579 billion, respectively.
Insurance plays an essential role in building financial resilience in society, and the industry will intensify efforts to create awareness and address these gaps. Consumers should take advantage of the educational efforts by insurers to understand and narrow gaps they may have in their financial plans.
HSBC Life believes that to support customers in building their financial safety net to navigate life’s twists and turns, insurance solutions must be supported by high-quality needs-based financial advice that puts the customer’s best interest at heart.
2. Choice, the consumer’s prerogative
This brings me to the next trend – consumer choice. Like all other businesses, insurers must acknowledge that consumers have choices. In insurance, this goes beyond their preferred brand or even their choice of insurance solution. Customers can choose whom they wish to receive financial advice from.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Recognising the importance of this, HSBC Life operates a multi-channel business in Singapore. We are convinced of the need to offer our customers their preferred mode of engagement.
HSBC’s acquisition of AXA Singapore in 2022 significantly increased our distribution reach. Our life and health propositions are available through HSBC Life financial planners, HSBC Bank relationship managers and insurance specialists, financial advisory firms, high-net-worth broker partners, as well as through our exclusive partnership with SingPost.
3. From products to propositions
Protection and high-quality financial advisory are fundamental to the role of the insurer. While these will not change, consumer needs have and will continue to evolve. This will require insurers to shift their business models from offering products to delivering holistic propositions.
Being part of HSBC Group, HSBC Life Singapore is able to leverage the expertise and services from across the group to meet the needs of our customers, across the wealth spectrum and throughout their life stages.
4. Emerging technologies could be a game changer
The pandemic accelerated the digital transformation in the industry, and increased receptiveness of both the industry and customers towards digital tools and touchpoints.
Post pandemic, many insurers continue to offer hybrid engagement platforms across the end-to-end insurance value chain – including financial advisory, policy issuance and servicing – offering customers the choice and flexibility in how they interact with their insurer.
Technology has continued to develop rapidly, and eyes are now on the use of artificial intelligence (AI). There are significant opportunities for the insurance sector to leverage AI as a key enabler.
While the human touch in financial advisory and insurance servicing will continue to be important, the use of AI could completely transform how we help customers meet their insurance needs. For example, generative AI-enabled solutions can augment the capability of insurance advisers to provide personalised propositions to customers.
This could be through co-pilot applications that serve as an adviser to the frontline sales personnel, providing them with insights and recommendations to help better identify customer needs, improve customer experience, drive better personalisation of the offering and improve sales conversion.
There are several other use cases of gen AI in insurance, including content creation, fraud detection, underwriting automation, customer engagement, predictive analysis, automated claims processing, customer service and productivity enhancements.
Adoption of these technologies by insurers could fundamentally change the way customers receive financial advice, or interact with their insurer or financial adviser. These will also drive significant improvement in customer experience over time.
The author is chief executive of HSBC Life Singapore
Copyright SPH Media. All rights reserved.
