Most global insurance markets will recover in 2021 and global growth over the next decade should settle down at 4.4%, against 8.1% in Asia (ex-Japan). The region will contribute more than 50% or EUR1.28 trillion to global premium growth until 2030, according to the latest Allianz Global Insurance Report 2020.
According to the Life Insurance Association of Singapore (LIA) the life insurance industry will continue to accelerate its digital transformation efforts and expand and upskill the workforce of the future.
Khor Hock Seng, President, LIA Singapore, said, "Life insurers are continuing to accelerate digitalisation efforts to future-proof our businesses. Workforce transformation remains a priority for life insurers to ensure our employees receive the training needed to utilise next-generation technologies such as artificial intelligence, data analytics, and machine learning; leveraging their benefits to improve customer experience and product innovation."
Described as an insurance cooperative providing life, health and general insurance products, Singapore’s NTUC Income has identified inclusivity as key to its digital transformation. The firm was the first recipient of the inaugural Applied Innovation Institute Singapore Insurance Innovation and Digital Benchmark for its online effectiveness, social presence, digital innovations and push into insurtech.
Like many industries everywhere, Singapore’s insurance industry had to pivot in 2020. From an industry that nearly stood still in the first half of 2020, it managed to find its footing in the second allowing the life insurance subsector, for example, to register 3% growth in the fourth quarter of 2020, despite the pandemic’s continued hold in the city.
Anny Huang, head of Digital Business at NTUC Income, acknowledged 2020 as a challenging year for everyone. To NTUC’s credit, the company was able to pivot. While she agreed that some businesses literally disappeared, citing travel insurance as an example, the move by senior leadership to set up digital channels and e-commerce years before has proven to be prudent and insightful.
Drivers of transformation
The strategy was originally aimed at the incoming younger generation of Singaporeans who may not necessarily see the need for physical meetings when buying insurance, at least not all the time.
So it was an opportune moment, according to Huang, with COVID-19 merely accelerating what the company had already started years ahead. She did concede some in the organisation found the shift challenging but the change was necessary and inevitable.
“Because we were in the lockdown (in 2020), we [were] forced to [digitalise]. Even (insurance) agents were forced to do digital transactions with their customers through Zoom. There simply was no other way out for them if they want their [livelihood] to continue,” she added.
“That kind of accelerated the entire adoption that we probably planned for the next five years, but it got completed within a year.”
However, the anticipated arrival of millennials was only one aspect of the transformation effort. For Huang, easy accessibility of digital tools and channels was also a factor in the successful pivot of NTUC. Some products like general insurance have been moving towards digital prior to 2020 but others like life and health, which are more complicated, still need some assistance from an agent.
Data-driven transformation
Huang remarked that from a go-to-market perspective that NTUC uses data to customise offerings based on the customer segment and profile. “Agents and digital direct channels are able to recommend the right products to customers when they land on our websites and talk to our agents,” she added. But this is just one part of the story.
For instance, NTUC uses Google Cloud's Analytics 360 and BigQuery to connect and analyze anonymised customer data, which enable them to conduct real-time data analysis and score potential customers based on their propensity to buy their products. They also utilise Google Cloud's Machine Learning (ML) combined with automated marketing on Optimize 360 to create personalized messages that help to drive sales through higher customer engagement.
But this is just one part of the story.
From a product-creation perspective, she believed the huge amounts of data that every insurance company has can be used to create new products. “You are able to study your customer [psychographic and demographic data better] and offer them the right products with a modular design, which will be easier for [customers] to also consume and buy,” she added.
Cloudifying insurance
According to Huang, NTUC formed a digital team called the Digital Transformation Office back in 2017 as an independent team outside of the BAU core business to look at disruption that is impacting the market, including insurtechs.
She credits the DTO for launching product ideas to address the new market needs. “So late last year we launched a product called Snack – a micro-insurance that gets you covered as and when you perform certain transactions on the NETS that you tag to the account,” she commented.
She also acknowledged that the road to the cloud for the core BAU is a long process. At the moment, a hybrid model has been adopted. “Data that we need fast turnaround for like psychographic data, real-time digital signals or if we want to look on customers’ current interactions to meet the best next prediction, all those data and infrastructure sits in the Cloud. But it comes to core customer information, it is still sitting on the company’s data centre,” she elaborated.
“I think it took a lot of effort from our IT side working with the Google Cloud team to migrate applications to the Cloud environment. A couple of years ago, we also started adopting some of the applications that need fast turnaround transactions to AWS Cloud. We are currently on a fairly hybrid model for our business.”
That said, she concedes the possibility that NTUC cannot move 100% to the cloud for security reasons. That said, she also acknowledged that the cloud is secure but that it’s a phase of education and adoption for both the IT team and those managing the infrastructure.
She commented that organisations like the NTUC have a long history meaning backend applications that will take time to move. Still, she sees an opportunity to build new solutions in the cloud. So rather than simply migrating 50-years of legacy to the cloud, there is potential for the organisation to adopt new solutions for the new business ideas.
For now, the hybrid model is here to stay.
Digital challenges ahead
Huang confided that one of the benefits of being part of the digital team is the lack of baggage when it comes to developing new products. “As many Singaporeans remain under-insured, we have an opportunity to launch new products that address the gap in the short-term including for protection and investment needs. We are also able to test products faster and move quickly,” she added.
An ever-present challenge is to be cognisant of the agents’ role in the business of insurance. “We need to make sure we develop products that meet their selling needs while also meeting the needs of customers for protection and savings,” she continued.
The marketing team plans to roll out a customer data platform (CDP) this year to create synergy between online data with offline interactions, such as call centre interaction and agent interactions. For example, alerting an agent of a potential sales opportunity when a customer reads a blog article about a particular product.
She also accepted that there will be a segment of the community that will want to buy direct from NTUC. “To bridge the so-called channel conflict issues, we work hand-in-hand with the offline team to make sure that any signals and data we collect digitally are being shared and fully utilised by the offline team as well,” concluded Huang.
Click on the PodChat player above to listen to the full dialogue with Huang.
- Can you briefly describe the core business of NTUC Income?
- What does the Singapore insurance landscape look like in 2021?
- Describe the business of NTUC Income in the last 5 years. How has the profile of its business and its customers changed?
- Would you agree that insurers are more data-driven today? Where do you see this data-driven model more prominent in the insurance practice?
- Common to many insurtech players in the heavy reliance on the cloud to support their business model. How have incumbent insurers like NTUC Income adopted the cloud?
- With the pandemic still with us, what do you see will be challenges and opportunities for the insurance sector, including NTUC Income, in 2021?
