Insurtech ’20: Insurance firms must accelerate change
Insurtech involves not only using technology to innovate and survive amid disruption in the insurance industry. To effectively compete, companies must adopt a different mindset and embrace the speed of change.
“We are not just dealing with new ideas. We are dealing with the speed at which new ideas turn into old ideas,” said UnionBank of the Philippines and Fintech Philippines Association Chairman Justo Ortiz at Insurtech ‘20.
Insurance firms embracing digital
Financial institutions are risk-averse because they are in a highly-regulated industry. Since they are not used to speed, banks and insurance firms have to overcome a number of hurdles to innovation. Launching innovative projects could take six to nine months, Ortiz said. At which point, it may already be too late.
“In-house innovation is important, especially for critical services, but you have to speed up the process and look at what’s out there, and the only way to do that is with open APIs (application programming interfaces),” Ortiz said.
Embracing the speed of change is necessary for financial institutions to innovate, reinvent themselves, and survive industry disruption. It is a lesson that insurance companies are taking to heart.
“Big insurance companies are not traditionally known for innovation,” said Manulife Philippines President and CEO Richard Bates.
Bates, however, emphasized that industry giants like Manulife Philippines are speeding up processes and embracing insurtech to address the changing needs of customers.
Hosted by Manulife Philippines and organized by the Fintech Philippines Association, the landmark Insurtech ’20 event brought together different stakeholders. Insurance companies and insurtech startups shared best practices to help accelerate the digital revolution in the Philippine insurance industry.
Customers still need human touch
As insurance firms undergo a digital transformation, however, they need to balance the human element with technology.
“Businesses will still need the human touch,” said BIMA Founder and CEO Gusfaf Agartson.
A Swedish company that uses mobile technology to offer microinsurance products to underserved families, BIMA launched its operations in the Philippines in 2014. It aims to make insurance more affordable to customers in emerging markets who do not have access through traditional channels.
Agartson said technology is an enabler, but companies should not forget the preferences of their customers, especially in emerging markets. He noted that just because customers now have smartphones and access to digital tools does not mean technology will replace agents.
“Instead, technology will empower them and make them more effective agents,” Agartson said.
In order to understand their customers, however, insurance companies should know their online behavior.
What Filipino online users want
Fun fact: 2019 saw a 550% increase in Google searches for keto bread in the Philippines because of the curiosity of Filipinos.
Samuel Jeanblanc, Market Lead of Google Philippines, shared this at Insurtech ’20 as he gave insights on the online behavior of Filipinos.
Jeanblanc stressed that Filipino online users are curious, impatient, and prefer a mobile experience. This is why insurance companies who are embracing digital must adopt a mobile-first strategy.
“Also, they are not just comparing you to other insurance companies,” Jeanblanc pointed out.
He said that Filipinos already enjoy using the mobile apps of companies such as Uber or Starbucks. As such, they will be comparing an insurance firm’s online services with their positive experience with these apps.
The digital advantage
In another sign of disruption in the Philippine insurance industry, Singlife has also entered the Philippine market. Singlife Philippines owns the distinction of being the first digital-only insurance firm in the country. Unlike their competitors, Singlife Philippines will not sell products through insurance agents, but directly through digital platforms.
“Going all-digital has given us advantages in three key areas,” Singlife Philippines President and CEO Rien Hermans said.
First, he said that this will enable them to make their products more affordable. Second, he said that they expect digital tools to improve the customer experience. And third, going all-digital will enable Singlife to innovate more rapidly.
Will insurance companies succeed in their digital transformation? They must.
In the age of disruption, the choice is simple: evolve or die.