We are proud to announce that our esteemed client is starting their new journey with Sanlam. As they beautifully said, Helping people is actually one of the core values of life insurance companies and so it reflects in their new tag line, People Helping People.
Next decade will be critical for insurers
As the insurance industry gets ready to step into the third decade of the 21st century, it is the right time to chalk out a bold strategy for the future. Asia Insurance Review spoke with the new chairman of International Insurance Society and Aviva Asia executive chairman & Aviva Digital global chairman Chris Wei to understand the transformation strategy.
-By Anoop Khanna
Like other industries, insurance has to stay ahead of the technology curve and harness the wonders of modern technology to improve business efficiency and customer-centricity.
Commenting on this, IIS chairman Chris Wei said, This is perhaps the right time to evaluate how our industry would transform in the new decade. I believe the next decade will be critical for insurers to drive their strategic agenda to stay relevant or get ahead of competition. Whoever can deliver what the customer wants and needs, in a flexible, transparent and convenient way, will win.
The availability of an incredible range of data, coupled with the processing power to analyse such data, represents both incredible opportunity as well as threat for traditional insurers. Those that are able to develop data management and analytics capabilities to supplement traditional risk data with customer-level behavioural data will have a sustainable competitive advantage.
"This combined with digital tools that can address customer pain points in a frictionless way will translate to incredible opportunities for the insurance industry," said Mr Wei.
Insurance needs to be simple and transparent to win the trust of customers
Speaking about how customers will view insurance in the future, Mr Wei said, "Customers fundamentally don't trust the insurance industry because they see it as complicated, tedious, and lacking in transparency.
A big part of the digital transformation in the insurance industry is focused on simplifying products and delivering a frictionless customer experience. With increased automation and stronger analytical capabilities, what used to be six weeks of manual underwriting can now be done in three seconds with AI and NLP."
Mr Wei said, "Through offering innovative products and services that address customers' needs and providing a better experience on multiple channels, I believe customers' perception of insurance will change. Our ultimate goal is to reframe how people think of insurance: we want insurance to be bought, not sold."
Interpreting data is key
The technology industry has been focusing on building their products and services around customer utility and engagement for years. Customer-centricity is not just a slogan but is integral to the business model and strategy.
Mr Wei said, The tech giants have grown due to their ability to gather feedback and learn from each interaction with the customers and they are now reaping the benefits of insights gleaned from years of accumulated data.
"Data is knowledge but analytics is the key to unlock that knowledge vault. Through building a strong data analytics capability, I believe insurers can learn from their customers and deliver the best products, services and experience to help them bridge their protection gap," said Mr Wei.
Insurance and sustainability
Climate change is a major strategic issue for the insurance industry, as well as everyone living on this planet. Natural catastrophes, for example, are six times more frequent today than they were in 1950.
"This (rising frequency and increasing severity) makes more assets uninsurable and creates a protection gap for consumers. Insurers have a collective responsibility to collaborate to narrow the protection gap, and we have a role to play in modelling, understanding, communicating and working with others to mitigate and manage risk disaster recovery," Mr Wei said.
"By investing in prevention, building societal resilience and actively managing risk, we will be able to narrow the protection gap. Bringing this a step further, the industry should also consider incorporating Environmental, Social & Governance (ESG) issues into investment analysis and decision making."
"Aviva believes it delivers better investment outcomes for our clients, society and the environment, and we hope to use our experience to drive sustainable market wide capital market reforms and influence the businesses we invest and engage with," said Mr Wei.
One of the initiatives that Aviva is working on is a consultation with the UN Foundation, Business and Sustainable Development Commission and Index Initiative to produce free, publicly accessible Sustainable Development Goals (SDGs) league tables.
Best Practices: Cloud Data Management
So this is the area of best practices in cloud. The moment you want to make a choice consider cloud and make sure your base is on data gravity and keep your data management flexible. Focus on master data management particularly here and make sure you have some kind of semantic tier in your data management layer that crosses all those clouds so that you can operate in a multi cloud environment.
Jubilee Life Insurance signs MOA with Malaysian company
Jubilee Life Insurance Company Limited, the country's leading life insurance provider in the private sector, recently signed a Memorandum of Agreement with AETINS SDN BHD for the 'Implementation of JLPISF TAKAFUL System' in Islamabad. This system will enhance the Takaful base in the country and support towards streamlining its operations.
JLPISF Takaful System is a core business application for Takaful, it works as a cross functional ERP system and facilitates in the day-to-day business activities. This application's unique feature includes having Shariah compliant accounting procedures that are integrated at transactions level and are characterized by fully automated processes with lesser user intervention. As a result, Jubilee Life will be able to profile the personal needs of customers and serve them better, be able to craft contemporary products, introduce new products into the market, gain insights into business intelligence and analytics for a quick response system, mitigate risks, and eventually drive new package offerings.
At the occasion, Mr. Zahid Barki - Group Head Risk Management, Compliance and Quality Assurance - Jubilee Life Insurance said "This collaboration with AETINS is a momentous step taken in the Takaful industry. Jubilee Life being a leader in the industry has always been at the forefront of bringing premium products and services to its customers through innovation."
This exchange of MOA between the two companies took place in the presence of Malaysia External Trade Development Corporation (MATRADE) officials who came with the honourable Prime Minister of Malaysia, Dr. Mahatir Bin Mohammad on the invitation of the honourable Prime Minister of Pakistan, Mr. Imran Khan.
Understanding the risks of AI
A report released by RIMS, 'Making sense of artificial intelligence and its impact on risk management' broke down AI into two broad types - artificial general intelligence (AGI) and artificial narrow intelligence (ANI).
AGI is a 'thinking machine' that applies intelligence to a wide range of cognitive functions and continue to improve their reasoning abilities automatically. For many of us, "the best examples are the well-known machines from science fiction classics, such as HAL in 2001: A Space Odyssey, R2D2 and C3PO in Star Wars, or SkyNet in The Terminator," said the report. AGI represents tremendous opportunities, as well as risks, but the likelihood of it becoming a reality within the next 20 years is slim.
The second is the type of AI is focused on narrower tasks, such as image recognition, credit card fraud detection and speech recognition. "ANI should be a major concern for risk professionals as it has impacted many aspects of everyday life, and will continue to have growing, and potentially unexpected, impacts," said the report. "The market for narrow solutions is much bigger: Gartner estimates that AI-derived business value will be worth $3.9tn by 2022."
Common implementation scenarios of ANI include advanced process implementation, cognitive engagement such as intelligent agents, chatbots or virtual assistants, using machine to aid in data analysis such as in deep learning algorithms.
The exposures that risk managers must consider, the report said, include:
• Today's ANI innovation is tomorrow's standard product feature that consumers
• Changes introduced by AI innovations can
• Product and service differentiation is not necessarily driven by a computational algorithm. Rather, it is data-driven. Risk professionals should consider impacts to data related to risk domains such as security, privacy and resiliency.
• Distribution systems that rely on third-party developers, partner/agent sales models or other customer contact points can extend your risk beyond the traditional corporate boundaries. AI developed, operated or otherwise influenced by third parties working on your behalf needs to be consistent with your organization's core values.
"Essentially, if you understand the organization's strategy and how it can enhance its operations with ANI or the context around data, then you have something to offer," the report said.