With the appointment of a career banker late last year to lead its Asian business, Manulife has set the tone for a paradigm shift in how it delivers its proposition to Asia’s burgeoning middle class. We spoke to Anil Wadhwani, Asia CEO to glean some insights.
Expanding its distribution footprint while digitalising the customer experience are ongoing priorities for Manulife Asia, serving as a means to both improve the customer experience and productivity of its intermediaries.
“Our strategic ambition, five years from now, is to be recognised as a digital and customer-centric organisation. That is something that banks have done very well compared to insurance companies,” said Manulife Asia CEO Anil Wadhwani.
A seasoned banker who devoted 25 years of his career to Citi, Mr Wadhwani had spent much of his time in consumer banking in Asia with a focus on customer experience and digitalisation – before he was appointed to lead the Asian business for Manulife in November last year as the Canadian insurer looked to embark on its next stage of growth in the region.
Mr Wadhwani sees a similar challenge which both insurance companies and banks face, mainly in building up a digital infrastructure while maintaining a legacy system.
“Getting to the new technology stack is going to be pivotal and we are well on our way to doing that, which will create toolsets that allow us to be agile to respond to the needs of customers. But serving customers through the legacy system while we create a new engine is equally important, and how we increasingly move developments to the tech stack is a challenge we are addressing in a very conscious manner,” he said.
So can a legacy infrastructure and a new technology stack co-exist?
“Yes but I guess the proportionality of investment spent will change. If it is skewed now towards the legacy system then I’m hoping in a few years’ time that will get skewed to the new tech system.”
Building a stronger customer relationship
However, one area where banks have fared much better than insurance companies is in forging a strong customer relationship. Firstly, banks have done much better in owning the relationship with customers and providing them with solutions throughout their entire life cycle, he said.
“There is no reason why insurers and agents cannot co-own the entire relationship and engagement model. In fact we can help the agents to become more powerful through the use of data analytics which will allow them to build an even stronger relationship with customers,” said Mr Wadhwani.
Despite the fact that insurance has traditionally been a low-engagement product, there is now an opportunity for insurers to become more engaged with customers, he said.
“There is a distinct opportunity to create a compelling ecosystem that allows you to engage customers on an ongoing basis and you can then harness this data to automate and simplify your underwriting process. There would be no need to ask for information again from clients,” he said.
One way which Manulife Asia does this is through its ManulifeMove platform, a customer reward programme designed to motivate customers to stay physically active.
Health and wealth expert
Creating such a health ecosystem that addresses specific customer needs certainly bodes well for Manulife’s ambitions to be a significant player in health insurance.
Another area where it also hopes to make an impact is in the wealth management space, said Mr Wadhwani, adding that Manulife’s asset management business enhances its ability to provide a value added service.
“We have a distinct model with both insurance and asset management capabilities and we’ve been able to harness both to curate products for example in pensions and investment-linked. We also manufacture mutual funds and I think we can provide the customer with a holistic experience in terms of his or her savings, insurance, investment and legacy needs.”
One market where Manulife is keen to promote both its health and wealth credentials is China. It has in place a fairly strong infrastructure, achieving an investment company ‘WFOE’ (Wholly Foreign-Owned Enterprise) status last year which paves the way for it to launch asset management capabilities for domestic institutional investors.
It’s WFOE in China - Manulife Investment (Shanghai) - complements Manulife’s two other existing joint ventures in the country. Manulife-Sinochem Life Insurance was the first foreign invested joint venture life insurer to sell mutual funds in China, while Manulife TEDA Fund Management Company was one of the first of six asset management firms approved by the China Securities Regulatory Commission to sell fund of funds in the country.
“Being a retirement and health expert in China is a strategic priority for us and a lot of work has been put in to grow our distribution and build up our digital capabilities.
“We have a footprint in 51 cities across 14 provinces but we don’t have equal scale across those cites, so building scale to service our Chinese customers is a big priority for us.”
Setting itself apart
Given the universe of players competing in the life insurance space, Mr Wadhwani believes there are several things which set Manulife apart.
One of it is its international scale which allows it to leverage and transfer capabilities from one market to another. Coupled with the quality of its digital execution, it becomes an area of strength for the company, he said.
“For example we launched an e-claims service in Hong Kong earlier this year and about 40% of our eligible claims in that market now go through this channel. And there’s nothing stopping us from lifting and shifting this service to every single market across the region, and that’s where the strength of our globality and scale comes through.”
He added that another differentiating factor is the quality and mix of its distribution which means it is not overly dependent on any single source of business. At present, agency makes up 40% of the business while the rest are divided between bancassurance and third-party broker channels.
Mr Wadhwani believes the strong distribution capabilities which Manulife Asia has developed over the years holds it in good stead for future growth. Aside from its well-publicised partnership with Singapore’s DBS Bank, it has also developed strong bancassurance relationships in various Southeast Asian markets.
But ultimately, the level of customer-centricity will be an important differentiator for insurance companies in the coming years, he said.
“We will see a leapfrogging in how insurance is delivered in the next three to five years, and I think focusing on the customer and being just obsessed with the entire client experience will drive a different level of interaction in the way you manufacture and deliver products to customers.”
Manulife Asia registered a 17% rise increase in gross premiums in the first half of this year (1H18) compared to the previous corresponding period, alongside a 13% rise in New Business Value (NBV) to $514m. Its annualised premium equivalent sales (APE) dropped marginally by 1% in 1H18, although core earnings improved by 20% to $653m driven by Asia ex-Japan due to a combination of favourable new business and in-force business growth. A