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May 2024

Modernising insurance for a new generation of consumers

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Source: Asia Insurance Review | Sep 2021

Over the last few years, insurers have been heavily focused on finding ways to tap into the younger generation that will be their primary consumers in the future. We spoke to InsurTech Gigacover’s Mr Amerson Lin to get his take on how to reach that demographic. 
By Amir Sadiq
As the insurance industry looks to re-invent itself to be more relevant in the future, it needs to be able to understand the needs and wants of its consumers and get them to see the value of being insured.
A new generation for a new world
Speaking to Asia Insurance Review, Gigacover co-founder and CEO Amerson Lin said that a crucial aspect of this will be getting younger talent to work in the industry.
“The new buyers of insurance are not going to be from my generation or before – we’ve already been covered. It’s going to be young millennials and workers needing insurance for business or getting to the next phase of life – getting married or having a kid – and they know how they want to consume insurance. Ideas coming organically from this group will be much more relevant,” he said.
He brought up how interesting ideas such as selling insurance on new platforms like TikTok, embedding bite-sized insurance in various purchases and having flexible subscription models have all come from the younger working population that understands how streaming and subscription services have changed the mentality of consumers.
This is also a group of people who value their independence and freedom, preferring to run their own side-hustles and become entrepreneurs rather than be tied to an employer.
“We want to serve this population of independent workers and so we are trying to innovate with the understanding of how they want to purchase. They want something that is smaller in size, easy to stop and start and more relevant to the specific risk they are worried about,” he said.
Nuances of different markets
At the same time, each market has its own unique quirks that will require a slightly different approach. This is especially true of a region as diverse as Southeast Asia, where insurance coverage and consumer knowledge can vary significantly from one market to the next.
With Gigacover having operations in Singapore, Indonesia and the Philippines, Mr Lin was well placed to discuss the nuances in each of these markets.
Compared to Indonesia and the Philippines, insurance penetration and education in Singapore is high.
In addition, Singapore also has very strong government social schemes such as the Central Provident Fund, a compulsory comprehensive savings and pension plan for working Singaporeans and MediShield Life. With these high-risk areas already sufficiently covered, what is left for the private sector to innovate is going to be more specific to particular segments of the industry.
“In Singapore, we’ve seen a lot of success with the driving population.
We serve GoJek drivers and, increasingly, many drivers from taxi fleets and delivery companies,” he said.
Protection needs are also likely to change as the country goes through different phases of online commerce and remote work, with mental health issues becoming an emerging opportunity. He noted that expenditure of life insurance has gone up as a result of better understanding of mortality.
While there was an increase in insurance awareness among Indonesians during the pandemic, Mr Lin said that it still did not translate as strongly into self-buying behaviour as insurance is still a secondary concern for most of the population, with their main concern being jobs, income and access to earnings.
On this front, he believes that embedding the relevant protection for them into the things they want, which are their top-of-mind concerns, is the way forward. “That’s how insurance [in Indonesia] will move in the future. It’s got to be embedded into something that’s more primary and more natural to purchase,” he said.
Embedded microinsurance for things such as personal accident, gadget protection and income loss will also see higher claims frequency than life insurance policies, which will, in turn, help people see value in insurance if they have a positive claims experience.
“I’ve been telling my team that we want to pay out claims,” said Mr Lin. “That is how we show that there is real value in the products and that people didn’t just spend money that goes nowhere. We want to celebrate claims. We want to pay out fast. We want to use those stories to generate education and awareness.”
The Philippines
While Gigacover is a relative newcomer to the Philippines, having started there only in July this year, Mr Lin has noticed certain trends in the market.
“Interestingly, the Philippines market is starting to behave a bit more like the US,” he said and attributed it to the mix of workers, with many being customer service, designers and market professionals touting their services on online platforms such as Fiverr, Outwork or Freelancer, a practice more prevalent in the US which is not seen as much in Singapore or Indonesia.
Consequently, this makes them much more in tune with American philosophies on insurance and protection, with many of them focused on healthcare and group-level insurance. “I’m starting to see workers in the Philippines care about this after COVID. They want health coverage. They want the ability to see a doctor quickly to get a scan done to make sure they are safe, and they are willing to spend quite a bit of money on that,” he said.
Achieving scale
Aside from embedding insurance into other basic products that people will purchase, Gigacover also adopts a business-to-business-to-worker strategy.
“We typically work with big platforms, agencies and factories to reach thousands of users at once … and this has been our strategy so far in Singapore, Indonesia and the Philippines,” said Mr Lin. “We think that would be the easiest way to reach a good number of workers.”
He added that this is also helps to improve the insurance risk pool. When selling insurance on an individual basis, selection bias comes into play where individuals who perceive themselves as being higher risk are more likely to be the ones buying insurance, leading to the risk pool becoming more high-risk.
“If it’s gone through the group business, then everybody gets covered and you get more even risk. So, you get better underwriting and better claims experience which translates to better prices. That’s the way for us to scale – going through these platforms,” he said.
Gig economy here to stay
As markets begin to emerge from and adapt to COVID-19, there has also been speculation on whether the gig economy – which experienced a sudden growth owing to job losses and enforced remote work during the pandemic – and the resulting demand for insurance in that segment would begin to decline.
Mr Lin does not believe that this will happen and that the gig economy is here to stay. While some gig workers might want to look for more stable income eventually, he said that many businesses and large corporates will want to have some form of hybridisation in their workforce, incorporating a healthy mix of full-time employees, contract staff and freelancers.
Likewise, the demand for gig insurance is also likely to continue growing as people pay more attention to what kind of protection and financial services gig workers need.
“Most people have ignored this segment saying it’s not profitable and it’s so hard to reach them … but I think the solution to reach them is just being fully digital. That will keep your costs low and keep your ability to serve large numbers of workers sustainable,” he said. A 
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