Insurance industry being reshaped by wellness, sustainability demands and AI
All these changes require insurers to relook their business models, operating structures and talent development capabilities
ROUNDTABLE PANELLISTS:
- Akhil Doegar, group head of distribution at Singlife
- Dr Khoo Kah Siang, CEO at Manulife Singapore
- Christopher Albrecht, CEO at Sun Life Singapore
- Harpreet Bindra, CEO at HSBC Life Singapore
Moderator: Joan Ng, senior correspondent, The Business Times
INSURERS are evolving their business models and offerings to account for changing customer demands, such as an increased emphasis on wellbeing and environmental stewardship.
New technologies such as artificial intelligence (AI) are also shaping their business decisions, key industry executives told The Business Times.
The insurance customer of today is looking for an insurer that can offer more than just affordable coverage for major life events. They also want access to wellness programmes, high-quality and holistic advice, and customised products and services.
Beyond product and service offerings, customers will also assess an insurer based on its commitment to environmental, social and governance factors. Insurers who want to retain customers and win new ones must show “environmental stewardship” or be a “sustainability ambassador”.
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To respond to these changing demands, insurers are adding new products to their portfolios. They are also adopting AI to generate insights, support better customer conversations and create better products.
To communicate with customers and distribute their offerings, insurers are also adopting new digital channels.
All these changes require insurers to relook their business models, operating structures and talent development capabilities. They are seeking new partnerships, making changes to internal processes, and investing in technology and employee upgrades.
What is one emerging challenge you see that could shape the direction of the insurance industry in the next five years?
Akhil Doegar: As customers increasingly demand clear and detailed explanations of coverage, terms and pricing, there is also a growing expectation for choice and customisation in their insurance products.
This shift is shaping the industry towards open architecture business models that facilitate a more integrated approach – allowing insurers and distributors to offer a diverse range of products and services that meet the unique needs and preferences of each customer, and enhancing engagement and satisfaction.
Today’s customers expect more than traditional coverage; they seek proactive support that extends beyond the basics. This includes wellness programmes, access to healthcare services, and tools to help mitigate risks.
By building and integrating these services into an ecosystem, insurers can provide comprehensive, value-added services that proactively address the various needs of their customers, reinforcing trust and loyalty.
The modern consumer is increasingly drawn to brands that not only talk about ethical practices and environmental stewardship but also actively demonstrate these commitments. Insurers are called to not just participate in but lead initiatives that contribute positively to society and the environment.
This commitment is crucial for maintaining relevance and competitiveness in a market where consumers prioritise corporate responsibility.
Dr Khoo Kah Siang: An emerging challenge that is pivotal in shaping the future of the insurance industry is the demographic shift towards an ageing population. By 2026, Singapore is projected to become a super-aged society, defined as when the proportion of the population aged 65 and above reaches 21 per cent.
According to the Population in Brief report, this figure will increase to approximately one in four citizens by 2030. This demographic trend presents unique challenges and opportunities, particularly in catering to the rising demand for retirement, savings and legacy planning.
In response to these demographic trends, the integration of advanced technologies and AI into our services becomes crucial. Technology is transforming how insurance is distributed and consumed. AI enables us to have more targeted and meaningful conversations with customers, driven by data insights rather than intuition.
This shift not only enhances customer engagement but also allows us to identify and address previously unrecognised coverage gaps.
As we adapt to these changes, our commitment to improving customer experience through digital channels remains steadfast, ensuring that we meet our customers not just at their point of need, but also through their preferred modes of interaction.
Christopher Albrecht: We identify the following key trends that provide challenges to the insurance industry and drive change in the marketplace:
- Evolving consumer behaviour, in context of the significantly growing life insurance industry. This will raise the bar for customer experience, expand the channels of distribution, and pressure speed-to-market of customised solutions.
- Megatrends in technology development, including AI and data science
- Changes in regulations
- Higher expectations of companies across industries to lead the way as sustainability ambassadors – making purpose-driven decisions to create a better workplace, marketplace and society
Evolving consumer behaviour is the one challenge Sun Life Singapore has its focus on. We believe that understanding consumer behaviour and being customer-centric impacts other aspects of the insurance business.
It determines, among other things, how we use technology to produce or deliver our offering, how we distribute through intermediaries or to the customer, how we innovate to add value and find the best solutions for our clients, and how we want to lead as a sustainability ambassador improving the society we live in. We believe that focus on client centricity is a key challenge shaping the industry in the next five years.
Harpreet Bindra: Insurance companies have long talked about leveraging data, digitalisation and technology to better serve their customers. I believe we are now at an inflection point at which data, machine learning models and AI have the potential to transform the insurance industry over the next three to five years.
Adoption of AI is increasing at a rapid pace, and we are already seeing several use cases being deployed at scale. However, insurers need to be aware of the challenges that come with the use of AI. These challenges include, among others, data privacy and security, transparency of the decision-making process, scalability and reliability, and regulatory compliance. There is no doubt that increasingly, AI will become more deeply integrated in insurance.
The key challenge for the industry, therefore, is to reinvent itself by embracing emerging technologies, redesigning operating models, building the relevant skill sets and talent, and creating the right organisational culture to succeed in this rapidly evolving landscape.
In response to this challenge, what changes have you implemented in the last year to prepare your organisation?
Doegar: In the past year, Singlife has enhanced our commitment to open architecture, customer choice, and sustainability, keeping pace with our digital strategy and evolving customer expectations.
We’ve broadened our healthcare partnerships with organisations such as the Agency for Integrated Care, Dementia Singapore and Homage. These alliances not only offer comprehensive care options, but also promote sustainability by integrating community-based services and supporting local health initiatives.
Our enhanced omnichannel experiences, combined with AI, streamline operations and reduce resource use, making our processes more efficient and environmentally friendly. This approach supports sustainable practices by minimising waste and optimising energy use across our service platforms.
Through active customer engagement and clearer communication, we’re making insurance more accessible and understandable; which encourages informed choices that can lead to more sustainable consumer behaviours. By prioritising feedback and transparency, we foster a culture of continuous improvement and responsible consumption.
These initiatives collectively advance Singlife’s goal of offering tailored, transparent and responsive insurance solutions, while also contributing to sustainable development within the Industry.
Dr Khoo: Over the past year, we have taken significant strides to innovate our insurance product offerings to better serve the ageing population and those with critical health conditions. A notable enhancement has been the incorporation of a terminal cancer benefit within our income savings plans.
Upon a terminal cancer diagnosis, the benefit provides a payout that supports expenses related to home care or palliative treatments. This aligns with our commitment to supporting our customers through all life stages, and reinforces our role as a pioneer in responsive and empathetic insurance solutions.
Our commitment to digital transformation, meanwhile, has led to significant upgrades to our proprietary online fund investment platform. These improvements enable our consultants to offer a holistic, high-quality and sustainable range of investment-linked policy funds across various key asset classes. The platform reflects our commitment to providing a convenient and efficient investment experience.
Furthermore, we are laser-focused on innovating our income-oriented investment solutions. These are designed to help investors achieve a stable income stream post-retirement – critical in addressing the challenges posed by Singapore’s ageing demographics, the erosion of retirement savings and rising medical costs due to inflation.
Our success in delivering these solutions hinges on our ability to combine our insurance and global investment capabilities.
Albrecht: In the past year, we listened to our target audience through a market research survey. Through our first Sun Life Financial Resilience Index survey conducted in Asia (including Singapore) in 2023 and published in 2024, we learnt that although high net worth individuals (HNWIs) are optimistic about their futures, they are not financially resilient. Therefore, we must help educate and create further awareness that financial security requires a plan.
Beyond supporting clients, we are committed as a sustainability ambassador to help our community lead healthier lives. In 2023, we launched the Sun Life Singapore Philanthropy Pledge, which entails a commitment on our part to donate 0.5 per cent of the premiums we receive from our policies, up to a S$20,000 cap per policy, towards philanthropic programmes that empower segments of our community that are in need.
All these allow us to better understand our consumers, meet and exceed customer expectations, provide best value through our insurance solutions, and support our community as a sustainability ambassador.
Bindra: We have as a global organisation started to develop and test the use of AI in various areas. The Singapore team has been able to leverage AI tools developed by teams around the world as well as initiate proof of concepts for local use cases.
HSBC Life Singapore has been on a transformation journey post the acquisition and successful integration of the AXA Singapore business. This has afforded us an excellent opportunity to build strong foundations that will be launchpads to do even more exciting things in the coming years, including the use of data, digitalisation and AI to better understand and serve our customers.
What exciting opportunity might be born out of this challenge, and how are you seizing it?
Doegar: The evolving insurance landscape presents an exciting opportunity for Singlife: delivering hyper-personalised insurance solutions with a human touch. Our commitment to open architecture places us at an advantage, allowing seamless integration of diverse services and products to better meet individual customer needs.
At Singlife, we leverage our leadership in the ecosystem to enhance our AI-driven adviser platform, matching clients with the ideal financial adviser based on their specific needs and demographics. This integration extends throughout the customer journey, influencing marketing, sales and servicing to create a tailored and engaging experience.
While technology streamlines processes and enhances personalisation, we prioritise the irreplaceable value of human interaction.
We empower our advisers by automating administrative tasks, freeing them to focus on building trust and developing bespoke solutions for each client. This approach deepens relationships and ensures our solutions are meticulously aligned with individual needs.
This strategic combination of technology, open architecture, and human-centric service reinforces Singlife’s role as a leader in innovation and customer satisfaction, setting us apart in a competitive industry and enabling us to shape future market trends effectively.
Dr Khoo: The integration of cutting-edge technologies, including generative AI, into our services presents an exciting opportunity to revolutionise customer experiences and streamline operational efficiencies. By leveraging these advancements, we aim to better service our customers and financial consultants.
In Singapore, we are utilising generative AI to assist our financial consultants by analysing vast amounts of data to identify and anticipate customer needs more effectively. It can suggest relevant talking points in multiple languages, and craft personalised messages to connect with customers meaningfully, enriching the customer experience while maintaining a personal touch.
As we integrate more advanced technology solutions, it is essential that we do not compromise on empathy and genuine connection. These human elements are crucial in building trust and understanding, which are as important as the solutions we provide.
Looking to the future, Manulife Singapore remains dedicated to innovating and adapting to the ever-changing landscape. By focusing on the needs of our customers and leveraging cutting-edge technology, we ensure that we remain at the forefront of addressing the diverse financial needs of our customers, providing them with security and confidence in their later years.
Albrecht: In the context of the significant growth of the industry and rising levels of financial awareness, we see the opportunity to meet clients’ increased demand for tailored solutions, sustainable products, and products backed by financially stable and well-trusted brands.
Our financial strength ratings are some of the highest in the global industry. In Singapore, our credit rating is the highest among insurers – AA-rated by S&P; and Aa3-rated by Moody’s.
Our culture is one of driving innovation, proactive risk management, and being accountable for sustainability. We are a financial services powerhouse with US$1 trillion of assets under management and primarily known for our insurance capabilities. For the good repute that we hold, we are excited for many more in Singapore to get to know us.
Sun Life made a strategic decision to open its Singapore branch in 2020. In a short four years, Sun Life Singapore has set up an office with about 50 staff, and acquired over 250 clients through our partnership with distributors. Our efforts to-date have not gone unnoticed. We have won six industry awards, recognising Sun Life Singapore as a product innovator and for our sustainability or philanthropic pledge efforts.
We will continue to work with business partners, create further awareness among intermediaries and HNWIs and ultra HNWIs, and introduce them to Sun Life Singapore’s customised insurance solutions within our prudent risk framework.
We endeavour to continue to run a sustainable business, protect our competitiveness and lead to better outcomes for our clients and communities around us. We are excited about the opportunity ahead.
Bindra: The opportunities for AI in insurance are limitless. We see a number of use cases for AI in insurance including content creation, fraud detection, underwriting automation, customer engagement, predictive analysis, automated claims processing, customer service and productivity enhancements.
We continue to explore these possibilities and this brings me back to the point I made earlier about being mindful of the challenges, identifying the appropriate risk mitigants and investing in areas that deliver the highest return and superior customer experience.
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