As a curtain raiser to the prestigious 2016 MDRT Experience and Global Conference in Hong Kong this month, we present highlights from another distinguished regional life event – the recent 27th Pacific Insurance Conference (PIC) in Manila, Philippines. Many hot topics including how to cope with disruptive innovation, investment and talent management were broached along with strong reminders that insurers’ focus must not waver from delivering true customer value and the aspiration to become a trusted adviser in this era.
Whether it is in bridging the protection gap or in accessing customers, a key takeaway from the 27th PIC is that the industry will need to embrace the fact that consumers will increasingly dictate the way in which insurers will interact with them. Insurers, on their part, will need to truly leverage on data and multi-channels to understand and deliver on their clients’ needs in order to become a trusted adviser to customers.
Guest-of-Honour, the Honorable Jejomar C Binay, Vice President, Republic of the Philippines, called on the industry to be relentless in catering to the needs of consumer and said that there is “no room for insensitivity or aloofness”.
“Those who fail to understand the people they serve will certainly fail, be it service providers or political regimes. Often, it’s the consumers themselves who invent the new products they need. Often too, it’s the unresponsive bureaucracies who stand against the most practical solutions.”
Highlighting the regional protection gap that stands at over US$58 trillion, Mr Moses Ojeisekhoba, CEO Reinsurance Asia, Regional President Asia, Swiss Re, said: “Whichever way you look at it, it boils down to the fact that the gap exists and is driven by insufficient understanding of the consumer.”
Power-shift to consumers
Manulife Asia CEO Roy Gori said insurers need to recognise the changing behavioural trend among customers, characterised by the information revolution wherein there is vast availability and transparency of information; instant gratification where the success benchmark is now measured in minutes and seconds; and the shift in power to the consumer who has knowledge at his disposal.
To stay relevant and to thrive successfully, the industry needs to be simple and intuitive in its offerings to customers. It must also embrace the fact that customers can choose to interact in a variety of channels which insurers have to seamlessly integrate, he said.
“The worst mistake you can make is to assume that everything is a fad,” said Mr Gori, adding that the winners will be those who try to “re-imagine things and engage from the customer’s perspective”.
Mr Jerry Smith, President & CEO, Asia Pacific, OgilvyOne Worldwide, shared similar sentiments. He added that insurers need to be agile in their approaches and willing to engage customers in order to deliver brand authenticity, which is what consumers look for in an increasingly transparent world.
“Pain points” offer deep insight
Aviva Asia Executive Chairman and Aviva Digital Global Chairman Chris Wei said insurers will need to understand the customers’ “pain points”, draw deep insight from these points and then develop value-added solutions.
He shared what Aviva did in Poland, drawing insights from the profile of “a young, single working adult” in the country – the demographic being “alone”, “work long hours”, “are health conscious”, “time-poor” and want everything to be covered in a simple-to-understand policy. Hence, the insurer developed a product which covered “life, critical illness, medical, accident, travel, renters and some lifestyle – one policy, one premium, one statement, digitally delivered”.
Understanding pain points however, should also apply to associate experiences, said Mr Vikas Datt, Senior Director & Head APAC, UST Global. Oftentimes, there is immense pressure on employees to perform in their roles. As such, augmenting and innovating on the associates’ experience can lead to more positive vibes and can help boost staff morale, which in turn benefits the business.
Disruption is not all that dreadful
While the digital disruption and innovation trend has taken many industries by storm, Mr Mark Wales, Partner, Consulting at Deloitte China, said that digital is not going to be a disruption of the entire insurance industry.
Disruption, he said, rarely occurs across the full length of the value chain. “Netflix did not take out the entire film industry, it took out one of its elements of distribution. Likewise, iTunes didn’t take out the music industry, it just took out its distribution.”
The key is to find out where the propensity for disruption in our industry is and to remove the pain points, he added.
Unprecedented change
Mr Mark Saunders, Group Chief Strategy and Marketing Officer, AIA, said the word “disruption” is “just a dramatic way to describe change”. There are mega trends – such as demographics, regulation, and environmental change – that the industry has adapted to and continues to adapt to.
Change, he said, is constant and is nothing new. “The only difference is that the pace of change is unprecedented.” Customer expectations have changed, therefore the industry has to change. It is not because of disruptors, but the need to continuously improve customer experience to remain sustainable, he added.
Agents must be digital too
Hearsay Social Founder and CEO Clara Shih reminded delegates of the crucial role that the agency force still plays and is why insurers must ensure their agents are tech-savvy and able to adapt to today’s buyer.
Despite its face-to-face nature, where consumers begin their insurance-buying journey is online, she said. So agents are also expected to maintain a presence online. “Profiles are like the yellow pages of our time.” She encouraged insurers not to marginalise the agency channel in their digitalisation efforts.
Be prepared
Turning to investment, experts also discussed the outlook of the current environment where there were mixed views as to “when rates will go back up”, Mr Dean A Connor, Sun Life Financial’s CEO said insurers should “plan for war and pray for peace”. It is important to imagine what the industry will look like if the rates stay low indefinitely.
Other than returns, the investment challenge also affects the operations of insurers such as the legacy distribution system. Milliman Chairman Ken Mungan said that the current era of low yields makes it very difficult to continue supporting the high costs of the legacy distribution system.
Notwithstanding, Mr Charles Scully, Chief Investments Officer, Asia, MetLife said that Asia remains the region with the most immense growth opportunities stemming from demographic changes and infrastructure development among others.
Mr Connor said: “The impact of the industry’s solutions and advice is more important than it has ever been. We have an obligation to innovate around product design, to find solutions that work in a lower interest rate world. There is a real opportunity to shine as an industry.”