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A new mixed beginning?

Can insurance be disrupted? Fully? Or will insurance tame the tide of disruption and build dams to channel its might to serve the industry? To some, this is as philosophical a question as ‘Can God help you?’

That's why we come from the premise that strategies and beliefs aside, technology is real. Tech is touching both techies and non-techies, as well as reaching out to those within and outside the industry. Technology is all pervasive and it has changed the face of insurance too. Some argue not enough, while yet others say it can never be changed, given the implicit rigidity of the ‘protection’ product and the tough analytics and AI needed to do predictive pricing on customising coverage realistically.

So we pedal the modern bikes panting breathlessly whilst whistling through the ‘intramuros’, to find the magic of translating technology to business in insurance.

This will be the key challenge of this 29th EAIC in Manila, held for the first time in its 58-year history in the first half of the year. EAIC is a huge force in its own right with its $657bn life premiums representing some 25% of the global life market, and the non-life business of $227bn with an 11% market share. In total, the grouping accounts for 19% of the world market of $2.6tn as cited by Sigma in its analysis of 2016, being the latest in comparable global figures.

And this excludes the might of the Asian giant not in the EAIC group - China which alone accounts for 10% of global premium. In the digital world, China stands stratospherically tall with Ping An and Zhong An legendary in their digital sales.

Can some of that Chinese tech chintz rub off on the East Asian markets? Is regulation the greatest deterrent to companies going fully digital? Many are trying ambitiously, restrictions notwithstanding. While some espouse pure single-minded focus on things digital, there are yet others making a name as being strong in both worlds’ - digital as well as traditional - distribution channels.

Then there is the whole Cambridge Analytica fallout, data protection rules, data breaches and thefts with 1,765 incidents in 2017 with 2.6 bn records breached (according to the Gemalto records), and cyber security is rated as the number one threat in the world.

At this EAIC particularly, there will be plenty to talk about without the distraction of networking with everyone worried over the year-end renewals. And technology will rightfully be the key as encapsulated in the theme: ‘Managing disruptions, driving change’.

So what will the future be? Que sera sera!

I am staying connected, while having coffee with my trusted agent and broker too!

Mr Sivam Subramaniam
Asia Insurance Review




On behalf of the Philippines Insurers and Reinsurers Association and the Philippine Life Insurance Association, the Manila Organising Committee welcomes you to the 29th EAIC.

The theme of the 29th EAIC is “Managing disruptions, driving change”. We live in the age of disruptions driven by rapid technological advancements and immediate access to unlimited information, exacerbated by climate change and the influence of a growing youthful population. We need to embrace the millennials who now comprise the majority of our workforce and customer segments, better to understand their peculiar needs and their ways of collaboration. We must engage ourselves with the use of analytics to disrupt the present in order to gain dramatic improvements in productivity and customer experience.

EAIC breeds networking engagements for light bulb moments

We have prepared an exciting and value-creating EAIC agenda. The shared insights of global executive thought leaders and industry experts will bring to the fore those light bulb moments as we go through with our networking engagements. We have reinsurers and solution providers with meeting suites, and breakout sessions on wealth management, disruption by design, reality cyber and digital forensic. Not to be missed are the hospitality cocktails, the AIR's Asia Trusted Life Agents & Advisers Awards and the EAIC gala dinner which will feature talent presentation from EAIC member cities.

Enjoy your stay in Manila and make the most of the opportunity to discover why ‘It's more fun in the Philippines!’.

We are grateful for your visit. Mabuhay!

Mr Ramon Yap Dimacali
Chairman - Manila Organising Committee
29th EAIC, 2018



Fulfil the needs of health claimants beyond claims

Health insurers should enable claimants to get access to the best in medical care, as a way of innovating, says Partner Re's Jerome Matrundola.

The life and health insurance industry is engaged in an endless race to try and outsmart, outmanoeuvre and outsell one another. The drive to innovate and differentiate is real and costly. Enormous sums of money are being invested by life and health insurers on innovation labs, InsurTech partnerships, data analytics, distribution partnerships and new IT platforms.

I am a big believer in fundamentals and constantly looking to improve around fundamentals. There are many ways to define the cornerstones of the life and health industry, but no matter how you do it, these four pillars are critical:

  • Customers: Engagement. Education. Distribution;
  • Product: Meeting customer needs with valuable solutions;
  • Risk (and data management) and capital management; and
  • Provide excellent service to our customers.

There have been some good solid wins in our industry over the last decade as many insurers have shifted their focus to risk products. Consumers now have much greater choice in how they protect themselves and how they purchase and maintain their coverage, thanks to greater efficiency in how these solutions are issued, wider scope of coverage, and some, perhaps minor, improvements to claims processes.

Industry colleagues refer to claims time as ‘the moment of truth’ - when insurers fulfil their promises and provide financial support at times of need. And yet it is baffling how rudimentary and slow the claims process can be when seeking reimbursement for simple medical claims.

For larger and more complex claims where there is a need for risk procedures to assess and process claims, there is still significant scope for innovation.

At this ‘moment of truth’, there are clearly better ways to service customers and create stories that engage new customers and demonstrate the value of life and health insurance.

Consider the following basic, yet unfortunately common examples:

  • The family breadwinner dies in an accident and the surviving spouse receives a benefit payment of $1m...now what?
  • A policyholder is diagnosed with a late stage cancer and receives a benefit payment of $100,000...now what?

Where does the policyholder go for the best care? What is the cost of care? Are there alternatives? What about therapy and rehabilitation? What about support for affected family members? These are just a few of the very difficult questions people face while trying to deal with the trauma of being diagnosed with cancer and the daunting reality of treating it.

Giving value through access to care

(Re)insurers need to look carefully at how their products address these issues, as well as how they improve the scope of service for customers including those claiming at older ages, surviving spouses, partners or children, or those surviving a life changing event.

In particular, they need to find ways to overcome geographic or financial barriers to enable policyholders to access international medical expertise, hospitals, clinics and therapies, wherever they are.

A great example of an innovative solution which addresses these challenges is a product that gives policyholders improved access to medical care should they suffer a critical event. The coverage provides valuable benefits, in addition to services related to the claim diagnosis.

Consider that someone with this coverage, after being diagnosed with a cancer, can:

  • Obtain a second medical opinion from a team of medical experts with a network of over 55,000 medical experts.
  • Seek out-of-country treatments for specific and serious conditions. Coverage includes surgeries, treatments, hospital stays, diagnosis and rehabilitation, and the policyholder has access to top international hospitals and clinics with no out-of-pocket costs.
  • A concierge service means that one contact ensures all flights are booked, airport transfers and hotels are arranged, and translation services are available to translate discussions pertaining to the services covered.

As life and health insurers seek differentiated and innovative ways to meet the changing needs of their clients, finding the right solutions in an efficient manner is becoming increasingly difficult. Focusing on improving and enhancing the fundamentals of our industry is quickly becoming the new platform for successful innovation.

Mr Jerome Matrundola is CEO Life & Health Asia Pacific at PartnerRe.



EAIC in figures



A triumphant return to Manila

The 29th East Asian Congress kicked off in grand style at Marriott Hotel in Manila last night, celebrating the many delegates with glitz and glamour. Philippines’ Insurance Commissioner Mr Dennis B Funa spoke of the camaraderie and close bonds of the industry in the region and welcomed the EAIC back to its second ever host city, back in 1964.



Rich in insight, bold in foresight

The Philippines secretary of finance Carlos Dominguez opened the 29th EAIC in Manila with an address that acknowledged the “withering pace” of technological change that is disrupting the financial services sector. Smart insurers attending the congress were paying close heed to his words.

By Paul McNamara

Mr Dominguez’s main piece of advice to regulators facing technological change around the region was simple: Act quickly. The nations that are most nimble and can move fast into the area of e-regulation will be the winners, he said.

FinTech, he said, is at the cutting edge of this change and should be seen as a blessing that will lead to greater financial inclusion. While insurance is the most closely regulated area of financial services, this means that it will be the sector that benefits most from FinTech developments.

“Asia is now the centre of gravity of the global economy,” he said. “The Philippines is one of the fastest growing economies in the world – and we are undertaking reforms (to the financial system) that will ensure this continues.”

The world is now in the middle of what Mr Dominguez called the fourth industrial revolution. “We need to rethink how we do things and how we create wealth for our people,” he said.

He ended his keynote by urging delegates to use the EAIC as a forum to plan for what is to come and encouraged participants to create an agenda for the future that was “rich in insight and bold in foresight.”



Speed with excellence

When the EAIC was looking for a guest speaker from the Philippines whose business embodied the spirit of ‘managing disruptions, driving change’ they did not have to look much further than Jollibee Foods president and CEO Ernesto Tanmantiong.

By Paul McNamara

Jollibee’s 43-year history traces its roots back to a couple of ice-cream parlours established in 1975 that has grown to become the largest Asian food-services business in the world today. During that period the business managed to fend off serious disruption in the form of the arrival of McDonald’s and a more recent tech-induced supply-line shortage, but it never stopped managing change.

Insurance businesses facing their own forms of disruption and change were encouraged to learn from Mr Tanmantiong’s three main pieces of wisdom.

The first lesson was that of the importance of customer focus. This is where McDonald’s went badly wrong, Mr Tanmantiong said, in failing to understand the tastes of typical Filipinos.

The second lesson was to retain humility and to listen and learn. This might include listening to customers but it also means watching competitors and being willing to adapt to changing circumstances.

The third lesson was the need for ‘speed with excellence’. By this Mr Tanmantiong meant that a business needs to be able to adapt to a new situation very quickly – but never at the cost of quality. True success will only be maintained by marrying both together.

“Life will throw you curveballs,” said Mr Tanmantiong. “What is important is how you meet them.”

The business of disruption and change is never ending and it never pays to become complacent. As far as Jollibee is concerned, Mr Tanmantiong said, “The best is yet to come.”

Coming from a business that has 1,065 stores in the Philippines compared to McDonald’s 569, Jollibee serves as a textbook case of how to deal with both disruption and change.



East Asia in good form

Asia continues to be a driving force in the global economy, and the insurance industry has benefited greatly. The growing middle class in the region has led to a largely positive year for Asian insurers, as the EAIC chief delegates reported yesterday morning.

By Ahmad Zaki

The chief delegates of the 12 EAIC member countries reported good tidings for 2017, with solid economic growth providing a positive impact on the insurance industry. Of note were the impressive figures from Macau, Cambodia and Thailand, which recorded GDP growth of 9.1%, 7% and 4.1% respectively. These translated to a substantial increase in gross premiums for the year; Macau reported 6.8% growth in gross premiums for both life and non-life; Cambodia saw a massive 27.2% growth in premiums, driven mostly by good performance in life and microinsurance; while Thailand saw 5.9% growth in life insurance.

This upward trend was also seen in several other member countries. Malaysia had 6.8% growth in annual premiums in the life sector, while Hong Kong’s life sector grew 8.6% in 2017. In Indonesia, driven by the huge growth of the bancassurance channel, life insurance premiums grew by 17.2%. Taiwan also reported spectacular growth in both sectors, with the life market growing by 9.2% in 2016 and the general sector seeing a 7.4% increase. Host country the Philippines saw record highs, with a 12% growth in total net written premiums across both sectors.

In the more mature markets of Japan, South Korea and Singapore, growth was either incremental or the market remained flat. Singapore’s general insurance sector only saw a 0.8% improvement, while the growth rate for South Korea’s general sector slowed down to 3.3%. However, South Korea’s life market saw a negative growth rate of 4.9%. Japan remained relatively flat, as has been the case for the past five years, mainly due to the maturity of the market.



Learn and iterate

As the world enters the fourth industrial revolution, some organisations struggle to transform and prevent their own ‘Kodak moment’ from happening. Mr Andrew Rear of Munich Re Digital Partners provided some helpful advice at the first plenary session yesterday afternoon.

By Ahmad Zaki

“Lesson number one: don’t conduct grand transformations,” said Munich Re Digital Partners chief executive Andrew Rear. “But following quickly on that is lesson two: Don’t be complacent.”

Speaking from his experience at Munich Re Digital Partners, a unique take on innovation for the insurance industry, Mr Rear banished the typical advice given to organisations seeking to transform and innovate. “There is no such thing as an agile organisation – in the same way a start-up is agile. There are just big organisations and small organisations,” he added. Even the big tech companies such as Amazon and Google, viewed by many to be agile and fast organisations will get bogged down by gatekeepers, regulators and red tape, due to their sheer size.

He also pointed out that the popular notion of a ‘failure culture’ that has been floating around the tech industry over the past 10 years is not completely feasible for most businesses. “There are large parts of your organisation that don’t need a failure culture. In fact, they should be quite failure averse,” he said, suggesting finance departments as an example.

In short, he cautioned against a grand transformation because, “It doesn’t work, and you don’t need it.” Even a roadmap, he said, was unnecessary.

“Google and Amazon didn’t set out to be the organisations that they are today. They set out with an idea, a customer need and way to meet that customer need. Then, having built something, they realised that there was something else they could do and they built that, and then there was something else, so they built that and so on,” he said.

“Even today, there is no long-term transformation roadmap in these organisations. If you knew today everything you would be doing in five years’ time, then why wouldn’t you be doing that today?

“Instead, when you see an opportunity that could do something interesting for your business in five years’ time, then start working on that opportunity. Don’t worry about where it fits in your grand plan. Just start doing something and learn as you go,” he added.



Asia's place in the world of InsurTech

Asia is poised to play a bigger role in InsurTech investment and innovation, says Pivot Ventures’ Mr Stephen Goldstein.

The US has been the early leader in terms of insurance innovation (ie, InsurTech) for the past few years. And it still is. However, both investment and the speed of change in markets like Europe and Asia have started to shift some of this leadership position away from the US. Asia is poised to take a much bigger role in the years to come.

Investments in InsurTech

According to Accenture's report titled ‘Fearless innovation: Insurtech as the catalyst for change within insurance’, the total value of investment into InsurTech increased by 32% to $2.3bn in 2017.

It is important to look at the number of deals rather than deal value. Many ‘startups’ are starting to get later stage funding, which is helping to prop up some of the investment values reported for InsurTech.

The number of deals by geography from 2012-2017 is shown in Chart 1 (from the Willis Towers Watson/CB Insights Quarterly InsurTech Briefing Q4 2017).

While the US has dominated over this time, it is important to note China and India being just behind Germany and the UK.

China and India are in a league of their own for different reasons.

With China's 1.37bn and India's 1.32bn populations, it is no surprise that there is a lot of investment happening in InsurTech. With populations of that size, there are massive needs for protection of all shapes and sizes.

India has focused on insurance for the masses with aggregators like PolicyBazaar, and Cover Fox and digital insurers such as Acko.

China is focused on something a lot larger, which is building ecosystems around insurance. Ping An has done some amazing work with building ecosystems, the most impressive I think is around health insurance. Tencent, with its launch of Wesure, has offered insurance into its Wechat ecosystem that already has over 900m users. Let's not forget about Zhong An, which had the first insurtech IPO last year.

Regulation seem to be more open to innovation across the region

Regulators in the US and Europe are open innovation, however a lot of the regulation already in place (as well as the regulatory structure of the US specifically) limits the amount of innovation that can be done.

Aside from China and India, Singapore seems to be the next most innovative country in the APAC region. This is a combination of:

  • The openness of the regulator to have constructive dialogue and a risk-based approach to regulation;
  • The interconnectedness of the city; and
  • The amount of money present there.

In other markets, such as Malaysia, Hong Kong and Indonesia, regulators are also open to innovation and have opened sandboxes to help drive this. Japan seems to be going in this direction too.

Above all, customer needs matter

In many parts of emerging Asia, including China and India, insurance penetration is low and consumers need protection. The best way to get this out to the masses is through increased distribution. Face-to-face distribution has been the dominant force throughout Asia and will remain be prevalent. However, in order to reach more consumers, insurers in Asia will need to continue to invest in technology that enables them to get to their customers quickly, easily and conveniently.

Because of the money present and flowing into Asia, the engagement of regulators, nature of regulation as well as the needs of the customers, InsurTech in Asia is poised for growth in years to come.

Mr Stephen Goldstein is country director, US, Pivot Ventures



Malaysian Re licenses AIR Worldwide’s reinsurance portfolio management software

Malaysian Re announced yesterday that it has licensed AIR Worldwide’s catastrophe risk modelling platform for portfolio management and managing new risks.

The reinsurer is deploying AIR’s catastrophe modelling solution to support its reinsurance operations for a broad range of risk management solutions, including risk pricing and portfolio management, and as a tool to help expand into new markets and lines of business.

“As Malaysian Re continues to maintain its strong market presence in Asia, the Middle East and North Africa, we are also expanding into new markets,” said Mr Zainudin Ishak, President and CEO of Malaysian Re. “Partnering with AIR is our strategic move in line with Malaysian Re’s ongoing Business Transformation 2020 Programme, which was launched in April last year. The programme is our initiative towards achieving the company’s vision of becoming the preferred reinsurer in the region. In doing so, we need to enhance ourselves with a modern and advanced risk management software that can assist us to better quantify, analyse and manage our exposure to risks.”



Celebrating the champions

The very best of Asia's life insurance industry came together last night and was feted at the gala awards presentation for the 3rd Asia Trusted Life Agents & Advisers Awards. Eleven winners in 11 categories were announced, after several rigorous rounds of judging and selection, whittled down from 400 contenders from 50 companies across Asia.

While the winners come from many different countries and have varied approaches to life insurance, they all have one thing in common: They are the best in agency and advisory that the industry has to offer, and their contributions are invaluable.

The Winners

Insurance Agent of the Year

Amy Wat Chi MeiAIAHong Kong

Financial Adviser of the Year

Nguyen Thi Thanh LichManulifeVietnam

Rookie Insurance Agent of the Year

Selena WangAIAHong Kong

Insurance Agency Leader of the Year

Tan Lay SeongGreat Eastern Life Assurance (Malaysia) BhdMalaysia

Rookie Insurance Agency Leader of the Year

Agnes Ng Prudential Assurance CompanySingapore

Executive Champion of the Year

Rizalina MantaringCEO and Country Head, Sun Life FinancialPhilippines

Inspirational Agent/Leader of the Year

Divya TusnialTata AIA Life InsuranceIndia

Digital Agent/Agency Leader of the Year

Tay Kah LokAXA InsuranceSingapore

Lifetime Achievement

Antonia Lucrecia NicdaoPhilam LifePhilippines

Affinity/Bank Partner of the Year

CitibankHong Kong

Insurance Company of the Year for Agents

Cathay Life InsuranceTaiwan



Classic risks remain biggest disruptors for the industry

L-R: Messrs David Celdran, Kent Chaplin, Mike Reynolds, Nestor Tan and James Vickers

At the CEO roundtable yesterday morning, the panel discussed the disruptive threats and opportunities facing the industry, agreeing on the ever-present issues of Nat CAT, over capitalisation and how the industry’s risk are becoming more intangible.

By Ahmad Zaki

“Climate change, whether you believe it or not, and rising sea levels are some of the biggest disruptors for the industry now,” said Lloyd’s Asia Pacific CEO Kent Chaplin. He said that rising sea levels contributed an additional 30% to the total losses caused by superstorm Sandy, which hit the eastern seaboard of the US in 2012. “We are seeing the sea levels rise. We are seeing the incidence of natural catastrophes increase and unfortunately Asia Pacific is right at the heart of that.”

The important thing for the industry, he said, is that climate change and its consequences are something that can be modelled, and insurers have plenty of historic data collected on Nat CATs. “It’s what we do. We study and understand these events and we pay natural catastrophe losses.”

The same cannot be said of other emerging risks as the landscape changes. Cyber, for example, exists as a symptom of the intangible nature of the landscape insurers face – from identity theft, to intellectual property theft, to ransomware, cyber extends across a variety of risks that the industry does not fully comprehend just yet.

Bankers Association of the Philippines president Nestor Tan added that the preferred solution for most companies is to self-insure, as current cyber cover does not meet their needs. “Too expensive, too limiting and too small a coverage. Too much is still unknown,” he said.

Cyber, while certainly the most talked about risk, is also accompanied in the ‘intangible’ portfolio by self-driving vehicles and drones and, particularly, the regulations surrounding them. Willis Re International chairman James Vickers said dealing with these unknowns requires an understanding of where the legal liability lies and figuring out who is actually responsible. However, data privacy laws and similar areas of the law are lagging behind.

This, he said, leaves the industry in an awkward position and the industry needs to do some lobbying with the public sector. “We need to work within some form of legal framework, because insurance is a product that promises to pay – but pay against what?”

He admitted that governments across the globe have been trying to catch up. “Asia Pacific, with the high standards of education it has, and with a good view and understanding of what has happened in the mature markets, can lead the world in this regard,” Mr Vickers said.



Reinsurers can’t stick to status quo

L-R: Messrs Roshan Perera, Richard Austen, Tony Gallagher, Gary Wong and James Vickers

The second plenary session of the 29th EAIC focused on reinsurance for the future. NMG Group partner Roshan Perera moderated the session with contributions from Asia Reinsurance Brokers CEO Richard Austen, Guy Carpenter & Company regional CEO Tony Gallagher and Starr International Insurance Asia general manager Gary Wong.

By Paul McNamara

Setting the scene for the discussion was a presentation from the plenary’s fourth panelist, Willis Re International chairman James Vickers.

Mr Vickers painted a picture of a reinsurance industry that was being blinded by the Nat CAT-losses inflicted on the sector in 2017 which were distracting attention away from the real problem: the underlying performance of the sector is still poor

Expense ratios continue to be problematic and the overall return on investment for the reinsurance sector for 2017 was an unhealthy 2.9%, said Mr Vickers. “We need to rethink the reinsurance model,” he said, “because the amount of capital coming our way is enormous.”

It is the changing regulatory landscape that is pushing enormous pools of capital – from insurance-linked securities to pension funds – toward reinsurance because “it is an incredibly efficient use of capital,” he said.

Mr Vickers went on to paint a picture of the reinsurance sector trying to adapt to the rapidly changing regulatory and financial landscape. “What is needed,” said Mr Vickers, “is a paradigm shift.”

In the meantime the protection gap continues to widen slowly. The reinsurance sector is in the position to begin to close this gap. “Our voice has been too quiet on the global stage,” said Mr Vickers and urged reinsurers to join the call to take action to help close the protection gap.

“The real game changer,” Mr Vickers said, “is the role of regulation.” The world changed after the global financial crisis and the tidal wave sweeping through the financial services industry is now breaking on the reinsurance sector.

“We have to change. We have to get on with it – to help provide society with the knowledge and capacity to build a more sustainable and fairer world,” he said.

Guy Carpenter & Company regional CEO Tony Gallagher highlighted the fact that things work a little differently in Asia, and China in particular. China had seen shifts in insurance-buying habits that have been driven by technology and these same habits are leeching into other Asian markets.

This shift could feed through to the reinsurance sector, he said. What Asia needed, therefore, was to “establish an Asian reinsurance model” that was appropriate for this region, Mr Gallagher said.



An ecosystem for the new millennium

L-R: Messrs Ka-Man Chan, Shinichi Kishi, Nick Li and Mses Ruthai Suttikulpanich and Mylene Lopa

For years, insurers have been struggling to connect with the generation of young adults known collectively as millennials, who have a global spending power of over $6tn. Members of the panel at yesterday’s plenary session on ‘Millennials and Insurance’ claim that it requires a paradigm shift in how the industry approaches its products.

By Ahmad Zaki

“Insurance must change,” said SunLife Financial chief marketing officer Mylene Lopa. “Millennials want an omni-channel and seamless experience, and the message, messenger and medium must be relevant to them.”

This also requires insurers to enhance their products by tailoring them to specific individual needs and marketing those products accordingly. For a generation well-known for being impatient, any delay or extra steps in the process between wanting to buy insurance and purchasing can make the difference. This equates to a streamlined underwriting process, or as Muang Thai Life Assurance head of the Fuschia Innovation Center Ruthai Suttikulpanich said, “Less is more.”

“We try to explain a whole load of everything, because insurers have been trying to translate the paper process onto the online experience, but that doesn’t work. But millennials are not going to go through the whole bible of coverage. In order to be mobile and be digital, you really need to retranslate and rethink how you approach your products,” she said.

Even after moving to an online platform, it is not enough simply to set up an online distribution channel or an app and let it run, said NMG Group principal Nick Li. Speaking from the perspective of a millennial he said, “We want the buying process to be digital. What that means is that insurance must build an ecosystem in order to interact digitally with millennials. If I have a question for an insurer, I want the option of having it answered digitally. I want the option to check my product details or change my account details digitally. If I want to buy a product, I want to be able to see reviews of this product from people in the community, find out what they think of the insurer and the product. That helps me make my decision on whether to buy or not.”

He also suggested increasing the interaction with millennial customers over social media, as it helps build a brand and a relationship.



Claims in the digital age: How insurers can get started

Transforming the claims process should be a top priority in reconfiguring the insurance customer experience, says McKinsey & Company.

The insurance industry is in the midst of a radical, digitally-infused shake-up. With new attackers on the hunt for customers, incumbents must move quickly to integrate digital technologies into their operations.

For the property and casualty (P&C) industry, digitising the claims function holds tremendous potential.

To capture the value of digital, P&C claims functions must embark on a transformation to become a customer-centric, digitally enabled organisation that excels in the three foundational areas of claims – customer experience, efficiency and effectiveness.

In our experience, a digital claims function can boost performance on all three KPIs and generate significant value.

End-to-end digitisation of the customer claims process

At the core of the claims function's digital transformation is a redesign of the claims customer journey. There is no silver bullet interaction that ensures customer satisfaction, but a successful redesign typically involves considering processes from the customer perspective and optimising back-office processes accordingly to provide simple and fast claims services.

Insurers should start with an ‘everything is possible’ mind-set to unleash truly transformative ideas. Satisfaction surveys in claims consistently show that customers desire a fast and intuitive process as well as transparency on where they are in the process and what happens next.

For example, Lemonade has worked to redefine the customer experience with an innovative, chatbot-based FNOL system that creates automated claims payouts within seconds.

To determine how digital technologies can unlock value and improve the claims customer process from start to finish, managers should examine each step with the following areas in mind and start to develop an aspirational future state for claims that is unconstrained by potential short-term, technological barriers.

Product simplification

Customers want simple and fast digital interactions, but complex coverage details that include many specific exceptions can create barriers.

Customer and intermediary self-service

Insurers have the opportunity to shift simple, routine transactions from claims handlers to intermediaries, such as agents and brokers, or customers themselves. Examples include an intuitive online tool for FNOL and an online self-scheduling tool for claims adjuster appointments.

Further, seamless handoffs across channels are critical: customers who start their claim online but want to talk to a claims handler or agent halfway through should be able to do so without having to repeat steps or information. This functionality requires that all system interfaces follow an identical structure and logic.

Intelligent case management

Supporting the entire process with automated, intelligent case management is critical to establishing truly end-to-end digital customer journeys. With the help of AI, a digital evaluation automatically identifies the best next step in a specific customer journey, reduces manual touchpoints, and significantly speeds up the claims process.

Frontline and back-office process digitisation

Claims handlers and adjusters manually carry out often-complex tasks, leading to significantly divergent results. Digital tools and systems can simplify and standardise manual processes.

This results in higher customer satisfaction and a leaner process with reduced follow-ups and recalculations or litigation.

Back-office automation

Insurers can achieve the greatest efficiency gains by fully automating back-office processes.


Providing customers with the necessary information in digital channels offers customers the sense of control they desire. One US insurer, for example, implemented a digital case-tracking tool and reduced the number of status request calls by more than 50%.

Digital integration of the claims ecosystem

For competitive differentiation and ownership of the customer in a claims case, insurance carriers need proactively to manage more (ideally all) processes related to a customer's claim – including those involving third parties.

For example, German claims solution provider Control€xpert digitally integrates with insurance carriers and repair shops to automate its invoice-verification process.

Insurers don’t need to start from zero. In many markets, InsurTechs have started to lead the digital integration, for example, by digitally connecting car repair shops and enabling digital cost estimate and invoice transmission. Insurers should explore partnerships with existing offerings to digitise and integrate the claims ecosystem further.

New operating model for digital age

Those insurers that move swiftly and decisively to transform the claims function can equip themselves to deliver against the new, higher customer expectations – while increasing efficiency and improving claims handling accuracy in the process.

This article is by Pia Br├╝ggemann, Tanguy Catlin, Jonas Chinczewski, Johannes-Tobias Lorenz, and Samantha Prymaka of McKinsey.



The night is young!

Reinsurers showed their hospitality to the industry with various cocktails throughout each night of the EAIC. Drinks flowed, relationships were formed, bonds were renewed and once again we are reminded why EAIC is such an important event for the industry.



Welcome to 2020 EAIC Seoul

I would like to extend my congratulations on the success of the 2018 EAIC Manila.

This year’s event served as a venue to share knowledge, insights and thoughts from various perspectives under the theme of Managing Disruptions, Driving Change.

Taking this opportunity, it is my privilege to invite you to the 30th EAIC Conference in Seoul.

Seoul is one of the most dynamic markets in the world having achieved tremendous growth and change in the insurance industry, not to mention in economy, politics, society and culture. I am also glad to see that the Korean peninsula is becoming a symbol where talks can ease tensions and secure peace.

In the next two years, the General Insurance Association of Korea (GIAK) and Korea Life Insurance Association (KLIA) will cooperate closely to make another round of successful events in Seoul.

The world’s seventh largest insurance market is witnessing active discussions on fundamental change of the insurance industry, in such areas as Industry 4.0, consumer trust, financial inclusion and innovations in regulatory reform. Likewise, Seoul is the right place to gain insights into the future direction of your management strategies and to expand your business.

GIAK and KLIA look forward to seeing you in Seoul.

Thank you.

Mr Jae-Koo Lee
Chief Delegate, Seoul



Digital disruption and the second-half of the chess board

Sounding a prophetic message of doom and gloom for the insurance industry with the advent and rapid progress of InsurTech, Mr Peter Hacker, Co-Founder & Partner, Distinction.Global, InsurTech opinion leader and author, gave insurers a wakeup call urging them to adapt and evolve or perish.

Technology and automation, he said, are moving at a pace that humans cannot match. “Disruption in the insurance and reinsurance industry has become the new normal. Anything that cannot be automated will be extremely valuable in the future,” he said, in a special keynote address yesterday at the SIRC. He mentioned here that creativity, intuition, emotion and ethics will be of immense value in the future.

Intangible assets and risks

Mr Hacker pointed out that, today, market capitalisation is driven by intangible assets. He said that while the conventional property and casualty risks will remain, the future will be dominated by mobility and intangible assets. “From an insurer's point of view there are huge opportunities because as the more the risk becomes intangible, the higher will be its severity,” he added.

He said Asia is now at a stage where digitisation and online models are disrupting conventional business models. Three trends driving this revolution are the galloping growth of mobile devices, rising popularity of social media and wider acceptance of online commerce.

Asia, which is home to 60% of the global population, has 2.3 billion mobile subscribers, who form 58% of the total global subscriber base . Furthermore, it is the Asian mobile phone giants like Sony, Huawei and Samsung that have a combined 70% share of the global smart phone market.

“There is a huge opportunity for insurers here to develop covers for the intangible risks of these companies against cyber risk threats,” said Mr Hacker.

He highlighted that the ‘Want’ vs ‘Fang’ (Facebook, Amazon, Netflix and Google) race has just started where billions of people are connected to the Web and disruptions will happen in unprecedented waves. “The era of disruptive automation and digitisation is fast approaching and millions of jobs are at risk,” he said. He mentioned a recent report by the ILO which said that 56% of all salaried jobs in countries like Cambodia, Indonesia, Philippines, Thailand and Vietnam could be replaced by automation and advanced technologies like 3D printing.

Insurers will have their “Tesla” moment

Insurers and reinsurers will have their “Tesla” moment and for this, they need to adapt to the changes. “The industry will have to embrace InsurTech by working together with it and you can have your 'Tesla' moment, and I believe that we are at the beginning of a new age of insurance,” said Mr Hacker.

He called upon the industry to be at the forefront and not on the back foot by taking data driven decisions, re-skilling and being innovative. The insurance industry must focus on data analytics as well as hone skills and develop talent and leadership within the organisation. “This will require industry-wide collaboration, capital market backing and governmental support,” he said.



New insurer/reinsurer roles morphing into one

New models of reinsurers and insurers will emerge in the not too distant future, with the lines between them blurring as interconnectedness grows both within the insurance sector and outside it, said speakers at a panel discussion held at the SIRC yesterday.

Pointing out that there will be more consolidation of the roles of these players, Mr George Kesselman, founder of InsurTech Asia, said: “We will see a ‘hybrid’ period of quasi insurers/reinsurers, which will be more general in their roles, consume less value and which may take the shape of a multi-role entity.”

He said that reinsurers will move closer to the forefront of risks, and engage more at the distribution level, together with startups and new players. “Rather than wait for someone to send the risks to you, they would ask, how do you enable (covering) new types of risks?”

Another panelist, Mr Anthony Hobrow, CEO of consultancy NexAssure Group, expressed optimism that the business pie in this new environment is not shrinking, but will instead continue to grow. The trend is one of merely shifting the balance of growth from the West to the Africa and Asia, where insurance penetration is low and the industry has a less strong presence. “Risks are increasing, they are also just getting more technical,” he added.

Age of machines

A fundamental shift that the industry will need to get used to is that the focus of insurance, such as motor, will shift from human error to machine error and technology-focused people will be the ones driving change, said Mr Hobrow. For instance, in motor, insurance will shift from driver to manufacturer. Operations, processes and legal contracts will be automated, and insurance wordings will be prepared via artificial intelligence.

He noted that in tandem, the skill base that is required within an insurance organisation will shift enormously too--and not just at a junior level. ‘How many people in the boardroom really understand blockchain?” he asked, citing the challenges.


The exponential increase in data being collected means that there is a need to build talent in the Big Data domain, said Ms Natasha K Mak-Levrion, Founder and Managing Director of PPEARL Consulting, who was also a panel speaker.

She said that the (re)insurance industry will be looking out for computational thinking skills to make meaning of such vast amounts of data efficiently, with a view to shift “from insight to foresight”. The workforce will also shift from a mainly transactional nature to advisory functions, where the opportunities will be much greater.

“Providing solutions, not just products, will be the key differentiator,” she said. She added that the industry needs too to look at the needs of the millennial generation, including their need for speed and work-life balance.

Other speakers including Mr Marc Haushofer, Chairman of Singapore Reinsurers’ Association, held the view that the industry needed to diversify not just by recruiting young people, but also those who are not too close to the business of insurance.

“They should ask questions that we as insiders, would not. It's really important that we learn to reduce the tradition of hierarchy, and bring in people who will challenge us,” he said.

Role of intermediaries and new trusted partnerships

As an insurance insider on the panel, Mr Paul Mang, Global CEO of Analytics at Aon, shared Ms Levrion's view that advisory would rise, and that would apply to brokers too. Going forward, they would play the role of trusted advisors structuring solutions, not just making placements.

Still, this would build upon their traditional role of bringing together capital and exposure, which would still exist. He added that emerging risks are complicated and may require new partnerships to be formed among insurers.

New client expectations and mindsets

As urbanisation and development progress, Mr Mang said that the concepts of not just risks, but also volatility are changing, and so are people's expectations of what is tolerable to them.

Margins of error are narrowing, while people also expect to live healthy and productive lives well into their 60s and 70s. The nature of interconnectedness has also led to new complexities and the need for analytics and new capabilities to address them.

Mr Kesselman cited the example of Uber, which had found it challenging to find an insurance industry player willing to offer a solution adapted to its business model until it finally found a partner in Aon. He said that the (re)insurance industry needs to change its mindset. It should not just look into selling products off-the-shelf, but should enter into partnerships and new collaborations in order to address new emerging fundamental risks.

He noted, however, that there will be an optimisation phase first in the coming years where manual processes would take time to move to digital ones, so that the efficiencies that the industry has to offer could be ‘unlocked’ as the sector makes a significant ”step change” to such an era.

The panel discussion was moderated by Mr Peter Hacker.

The three-day 14th SIRC ended yesterday. With the SIRC turned into an annual event from this year and next taking place from 30 October - 1 November 2018, the East Asian Insurance Congress will be held in Manila from 6–9 May 2018 instead of its customary calendar slot late in the year.



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