Close to a year since Covid-19 became a full-blown pandemic, much has changed in the world as we know it. This is particularly true for the insurance sector which for years has relied on legacy systems and manual processes to execute claims and onboard new customers.
With social distancing and virtual meetings being the norm for the time being, the industry – particularly in Asia, a region which holds much potential in view of its huge young population base – is up for a major revamp. The Asia-Pacific life insurance market is expected hit US$1.5 trillion in 2023, according to a GlobalData forecast, a compound annual growth rate of 4.9% from 2019 to 2023.
Core to driving customer stickiness for many of insurers will be a smooth digital client experience, where information around insurance policies is readily available and where areas such as premium payments are easy to execute. Already several insurers across the region have made it easier for policyholders to make their regular premium payments by linking up with regulator-backed payment infrastructure such as Singapore’s PayNow and Hong Kong’s Faster Payment System.
In mainland China, insurers have stepped up their engagement with potential new customers, leveraging online distribution channels to easily provide insurance services to those in need. “Fitch expects insurers to be more active in deploying new digital technologies to reinforce their long-term competitive edge. The Chinese insurance sector is evolving rapidly as e-commerce transforms the way they do business,” explains Terrence Wong, director of insurance at Fitch Ratings.
A Fitch research note also notes that insurers in mainland China will look to forge partnerships with platform players such social media and professional online insurance intermediaries.
Finally, proactive insurers committed to their digital journeys have also looked inwards for a much needed change. The use of robotic process automation (RPA) has been cited by insurers as one way to speed backend processes around claims that reduce the risk of “fat finger” errors. Other firms have looked to the cloud to better streamline and allow for straight-through processing of applications by easily matching customer’s data to the insurer’s risk model, as is the case with Munich Re which recently deployed it for its underwriting process.
While Covid-19 has been traumatic for many people around the world, the once-in-a-century crisis has forced and pressured traditional industries to look for more innovative solutions.