How insurers are riding the digital transformation wave?

From improving claims to simplifying products, veteran insurers give real-life examples of digitalisation in the industry.

Calculating flood risk costs for insurers can be tricky especially if the particular place is hilly on one side and flat on the other. Having a digital tool that allows insurers to see a map of the area and compare places with higher altitudes would help in decreasing the risks of floods and lower altitudes that would require higher premiums.

This is just one of the solutions that veteran insurers are leveraging as they ride the digital wave.

In a panel discussion during the third day of the Asian Banking & Finance Summit, Aditya Vardhan Tibrewala, Chief Technical Officer of Sompo Holdings (Asia) Pte. Ltd. explained how they used layer mapping to see the whole risk area they are underwriting.

“You would have areas within the same post code which might be low-lying flood areas and within 30 metres you might find a house that may be on a hill that would never be flooded ever. Having that understanding, combined with technology and insurance data allows us to better fulfil risk management as an insurer,” Aditya said.

Reaching consumers

The integral use of digitalisation is it makes it easier for insurers to reach customers and ensure that they have access to insurance.

“At Allianz, we have an app we have launched in some markets called Vivy. What this does is it makes [insurance] easier to understand and makes it relevant for customers. [For example] like how eating habits affect their health to give them a better understanding of their health conditions which in turn can give them a better understanding of their insurance needs,” Allianz PNB Life Chief Marketing Officer Gino Carlo Riola said.

Additionally, data plays a large role in issues such as climate risk management. An example set by Allianz is how they partnered with local government units in the Philippines in promoting sustainable mobility like bicycle lanes.

Misunderstandings in digitalisation

In the course of the discussion, Chetan Prakash, a Director at Simon Kucher & Partners, identified three common misunderstandings about digitalisation. Number one is that digitalisation is a digital initiative so it must be run by IT experts. The second is that digitalisation is just converting paper-based processes into digital form, and the last is that digitalisation is just automating processes in the back end.

“None of them on their own are completely wrong but digitalisation for us is so much more. It fundamentally changes the way that an insurance company operates. It changes the culture and the whole way the company operates with its customers,” Chetan said.

 Currently, Chetan sees a lot of digital initiatives across organisations however they sometimes don’t have coherent digital strategies. He said they almost always end up being proof of concepts but never really being able to be scaled in the way that businesses can operate.

“Digitalisation is more than looking at technology. We look at the organisational culture, and how the organisation is set up. Is it set up to succeed together as the base? It’s not the technology [that makes a business succeed] but it's just the vehicle to take us there,” Chetan added.

The purpose of helping people

When talking about technology, Gino said that what he always goes back to is how it is a tool that makes it easier for insurers to achieve their goal of helping people.

“Especially in developing countries like the Philippines, it really allows us to make insurance [something to not be scared off]. When both life changers and insurance customers come together, with technology bridging that everything is so much better,” Gino added.

For Aditya, he believes that technology and data can really help insurance firms build trust amongst consumers.

“Not changing is not an option. You have to evolve with technology. New channels will come in as well as new products. But importantly, digitalisation will really help efficiency in the insurance industry leading to better products, better services, and higher trust in the insurance industry,” Aditya added.

Chetan however has a piece of advice for insurers: “Change the way you are developing products so that they are simpler. Change the way that you are selling because if you continue to [sell insurance products traditionally], then no matter how much innovation we do with new products and benefits, eventually, they don’t get to the customer. Last is to change the way that we serve. That’s actually fundamental to what insurance is meant for. This means providing the services when and where they exactly need them."

Watch the video below to watch the panel discussion: