Digital Insurance Platforms And The Pandemic
Soumita Bhattacharya, Chief Technology Officer, AXA Mandiri Financial Services
Soumita Bhattacharya, Chief Technology Officer, AXA Mandiri Financial Services
With the advent of Industry 4.0 and, more recently, the transformation necessitated by COVID- 19, “Digitalization” has become a mantra. The Insurance industry, owing to its risk-averse nature, had been a laggard in the past. Despite disruptive players like Ping An and Lemonade, incumbents treaded with caution. Come COVID19, purse strings opened, and a slew of investment poured into non-face-to-face interactions with customers. But why did the industry need such a jolt, and how much did things really change? More importantly, how can you succeed in your digitalization journey?
Is Insurance Industry a Laggard?Mc Kinsey reports that Life Insurers in APAC collected over €970 billion in gross written premiums in 2019, growing at a CAGR of 10 percent. A strong technology backbone underpins this performance and the industry has not been shy of investing in technology, including in InsurTech. In fact, most insurers quickly adapted to the paradigm change in customer interactions as the framework already existed—just not in the way that digitalization is typically perceived. Insurance is a trust-based sector; unlike products sold through e-commerce, an insurance product is a promise that will be fulfilled in the unforeseen future. Not only do impersonal digital platforms make it difficult to establish such trust, the technical jargon (i.e., the dreaded terms and conditions) are often incomprehensible to the uninformed customer. Therefore, insurers seek to humanize digital experience with the aid of distributors (financial advisors or agents) and hold these intermediaries to the highest standards. I will take the example of AXA Mandiri Financial Services to illustrate the same.
Digitalization Journey for Life InsurersFor Life Insurers, digitalization starts with robust Sales Tools and Distributor Tools. Insurance sales is a highly regulated process. It requires a proper understanding of the customers’ financial needs and risk appetite, educating customers about charges and risk-based returns, and screening for anti-money laundering and other fraudulent purposes. AXA Mandiri implemented Perfect Solution as its second-generation Sales Tool in 2019, with a simplified user-experience to drive high adoption rates among financial advisors and easy-to-understand proposal illustrations to help customers cut through the jargon.
To monitor the performance of the advisors and ensure adherence to best practices, it implemented Perfect Assistant as a distribution performance
management tool. Perfect Assistant enables advisors and the company’s leaders to track sales productivity, manage customer relationships, reinforce trainings, and monitor sales quality. Further, insurers recognize the need for better transparency and self-servicing solutions in the form of customer portals. Continuing its theme of humanizing customer interactions, AXA Mandiri launched Emma (a.k.a. Perfect Partner) as a humanoid virtual assistant for customers. AXA has a global mission to transform from ‘payer to partner’ and to empower customers with confidence to believe they can make things happen through the #knowyoucan brand promise. Emma plays an important role in realizing this promise by offering healthcare services such as Teleconsultation, virtual classes, and healthy tips to Indonesian citizens digitally to support the country in combating the pandemic. It simplifies the customer journey through capabilities such as NAV status, claim handling, omnichannel chatbot and Livechat with human operators to resolve complex queries.
For Life Insurers, digitalization starts with robust Sales Tools and Distributor Tools
Going back, if this digitalization journey was way past its infancy even before COVID, what changed with the pandemic? First, the regulatory landscape adjusted to the changing needs of the customer, making virtual face-to-face interactions permissible. Where physical meetings and wet signatures were mandated pre-pandemic, video calls, e-signatures, and liveness checks became the norm during lockdowns. Secondly, insurers could no longer rely on physical meetings to stay on top of the mind of customers. Data analytics to predict customer needs and self-service or virtual interaction-based service delivery gained steam. Moreover, insurers wanted to protect their employees, and smart working solutions connecting front-office advisors and back-office customer service teams with the customer anytime and anywhere became imperative. Finally, with customers seeking online health and wellness services such as Telemedicine, insurers could justify their investment in digital customer platforms.
Key to Success• It starts with knowing your customer and your business—your technology roadmap must solve customers’ problems and unexpressed needs and create opportunities for business users to engage with customers.
• At the risk of sounding a cliché, be Agile. This applies to your project management, resourcing and procurement, and even business engagement practices: your IT strategy must keep pace with the business strategy.
• Build a strong data and API foundation and keep enhancing it to deliver better visualizations, microservices, predictive models, and turnaround times than before.
• Digitalization is not only about a slick front-end. Most insurers digitalize their back-office processes with the aid of workflows, Robotics, and AI. Assess your underwriting, claims processing, and policy servicing processes.
• If you haven’t already, start moving your payloads to the Cloud. Physical infrastructure cannot scale or provision as rapidly as you need it to. However, ensure you have strong cloud binding principles to guide what data and capabilities you want to retain on premise.
• Last but not the least, invest in people! No matter how well you pay, someone will pay higher. Ensuring your people can grow, learn, and feel connected to a greater purpose will motivate them towards a common goal.
