At what point does technology stop mattering, and the human touch becomes crucial? We interview an industry CDO to find out

As the Chief Digital Officer of Income (Singapore), Peter Tay is constantly striving to help his organization balance the blend of technology (hardware) with customer centricity (heartware) and innovation.

In this Q&A, Tay shares with DigiconAsia.net some of the latest insurtech trends and business strategies needed to keep the region’s peoples well-covered in terms of health, financial independence and wellness — all with a personal touch aforethought…

DigiconAsia: How has rapid digitalization across sectors and the introduction of AI impacted the insurance landscape?

Peter Tay (PT): With digitalization taking place across traditional industries as well as the advent of new technologies, insurers now have access to vast amounts of real-time data, enabling more accurate risk assessments, proactive customer engagement as well as new business opportunities to widen access to underinsured segments.

Digitalization has been a catalyst for embedded finance, which opens up insurance access to new customer segments via embedded insurance within the existing digital ecosystems of consumers — for example, micro-insurance embedded within transport and travel-related mobile apps. We are also seeing lifestyle merchants, such as restaurants that we typically would not associate with insurance activities, increasingly become more receptive to rewarding customer loyalty with insurance coverage.

Peter Tay, Chief Digital Officer, Income (Singapore)

At the same time, AI-powered tools are streamlining claims processing, underwriting, and customer service, shifting the focus from “detect and repair” to “predict and prevent” models. Increasingly, data and automation are leveraged to support new insurance innovations. This enhances operational efficiency, reduces costs, and improves customer satisfaction for insurers.

DigiconAsia: How are incumbents in the insurance industry remaining relevant in an insurtech-enhanced landscape? 

PT: Firstly, it is key to keep customer centricity at the core of product innovation. Understanding the psyche of digitally-savvy consumers today is important if incumbents aim to create value-added offerings to close their protection gaps. Convenience, cost-effectiveness and ease of use are integrated into their lifestyles — factors that resonate with them and influence their decisions. Consumers’ lifestyles continues to spur innovation, and a customer-centric approach ensures that the industry can cater to evolving needs and stay relevant. For example, with the growing interest in electric vehicles, the industry is going beyond “pay-as-you-drive” motor insurance to explore the potentials of a “pay-per-kilowatt” insurance proposition to provide the same flexibility to EV owners. Also:

  • Traditional insurance models will need to evolve and keep in-step with digital-first customers beyond traditional touchpoints and conventional partnerships such as banks and brokers. With new ecosystem partnerships come access to deeper customer insights. How then, are insurers leveraging data into customer insights? It is now commonplace for insurers to use technology and data to enhance the accuracy of risk prediction, which can translate into reducing impact on claims and premiums, ultimately benefiting all customers.
  • Finally, incumbent insurers need to adopt an omnichannel mindset. Many insurtechs depend on one digital perspective and how that digital perspective is able to deliver optimal customer value. However, we believe that a dynamic omnichannel approach is key in providing the best experience for customers, regardless of the channel they are reaching an insurer from, at any point in time. This sets the foundation for insurers to identify, develop and launch new product offerings with speed and agility to match ever-changing customer needs.

DigiconAsia: Can you describe some recent innovative insurtech strategies in general?

DigiconAsia: To us, innovation is the mindset that we encourage in a workforce to catalyze change to sharpen customer-centricity and reimagine customer engagement not just with product offerings but also the touchpoints online and offline, pre and post-purchase. 

Some recent insurtech schemes and initiatives imbibing innovation include:

  • Self disruption: Setting up a dedicated division to spur digitalization and operate like a start-up: to ideate and create new business propositions that are relevant to the evolving needs of modern lifestyles.
  • Insurance-as-a-Platform: This strategy is useful for expanding an insurer’s footprint in the region. Through pre-built insurtech integrations, incumbents can help financial service providers in a region break through their traditional business model and become an ecosystem player. This leads to the integration of their existing financial offerings and services into consumer-facing digital platforms to support wider market engagement. One example is helping banks to encourage customers to improve insurance coverage easily instead of develop the system from scratch.
  • Nurturing a bottom-up innovation culture: Innovative insurers encourage a bottom-up innovation mindset instead of the tired top-down approach. This can drive a continual culture of agility. Cultivating an adaptive mindset to drive change and learn from failures is key. This means, adopt a learn-fast fail-fast mindset underlining augmented, iterative innovation. Also, insurers need to walk-the-talk of innovation by speaking a ‘common language’ through organizing design-thinking workshops, data curriculum training, and hackathons to shape and enable the organization to drive bottom-up innovation. Through this culture, employees stay relevant and sharpen problem-solving skills through the lenses of customers — an experiential way to attain a deep grasp of the concept of customer centricity.

DigiconAsia: How can insurers strike a balance between providing traditionally trusted insurance and innovative digital propositions?

PT: The key to striking a balance is, first and foremost, understanding customer profiles, needs and wants. Each client has diverse needs, depending on factors such as their life stage and purchasing habits. 

Both traditional insurance and digital propositions play a role in meeting such needs, so the industry can meet demands whether clients prefer strictly traditional touchpoints, favor all-digital interactions, or are open to exploring unconventional offerings.

In our view, providing customers with choices, with different touchpoints and with more options to engage with us — is important. The caveat is that, in designing new business models, insurers need to consider if an unconventional product offering is cannibalizing a traditional business model.

This can come about only by possessing a clear understanding of who the target audience is; their pain points; and the insurer’s product-mix strategy. For example, a  lifestyle-embedded micro-insurance and investment model will appeal mostly to first jobbers and Millennials/Generation Z. Targeting this specific group with their preferred touchpoints (which in the case is via a mobile app) will allow an insurer to segment the product mix so that cannibalization is reduced, while making it possible to curate a seamless user experience for all other customer profiles.  

DigiconAsia thanks Peter Tay for sharing his industry cyber insights with readers.