DRIVEN by the rapid advances in technology, insurers in Singapore have been taking steps to be more customer-centric in an attempt to retain loyalty and attract new policyholders.
Front-end disruption in the sector will continue in 2017, as will the rise of unions between innovation-starved insurers and technology-related start-ups, industry players and observers echoed in unison.
They add that artificial intelligence, open application programme interface (API) and blockchain are technologies driving disruption in insurance.
The hunger for innovation, be it in products or processes, have led to insurers, including Aviva, AXA, Allianz and Manulife, setting up such labs in Singapore in recent years.
Many have also moved to improve front-end processes, including making it easier for their agents to sell products or for customers to purchase policies, particularly through digital channels.
Zia Zaman, chief innovation officer at MetLife Asia, says that the more insurers can make the link between the problems customers are trying to solve, the way they want to solve it, experiences they want delivered and follow ups done in the way they expect, the more likely insurers are to deliver value to customers.
"We live in an experiences economy and the product is just a part of it. It's an important part of it but it needs to be more customer-centric," he says, adding that the relationship between insurers and clients matters very much.
So, the more tools insurers have to allow the intermediary or the customer to drive themselves towards the way they want to use the financial services, the more likely it is for insurers to get to the heart of what consumers want, Mr Zaman says.
While insurers have been slow to adopt technology for product innovation, partner at Ernst & Young Advisory Sumit Narayanan expects them to ramp up product development on digital platforms in the months ahead as demand for customisable products grows.
"Usage-based insurance (UBI) for motor and health are good examples of a new product that customises insurance products to the next level with the use of technology," he says. Mr Narayanan adds that insurers are also investing greatly in technology to improve their back-end processes.
In the past two years, several insurers, including MetLife, Income and AIA, have hopped on the bandwagon to provide support and know-how to entrepreneurs.
In November 2015, AIA and Konica Minolta Inc teamed up to support a 12-week programme to deliver innovative solutions through integrating data to healthcare delivery.
Last November, Income launched an equity-free 11-week accelerator programme Income Future Starter to foster business innovation in the insurance sector. The accelerator begins in January, with Demo Day slated for March.
At around the same time, LumenLab, MetLife's Singapore-based innovation centre also rolled out "Collab" - a three-month programme aimed at generating solutions in customer engagement, claims process, insurance business model and the sales process. Eight start-ups will prepare for a Demo Day in May.
Many insurtechs though, focus on solving customers' broad protection needs that are "in the moment", Andrew Taggart, financial services consulting leader at PwC South-east Asia Consulting points out.
Doing so can translate into insurance offers that can easily be bought through compelling digital experiences integrated into customers' daily life, such as "in-app purchases".
But such an approach "is in direct contrast to the incumbent industry which has evolved into product driven businesses that rely on human sales forces to navigate complexity for customers to sell the products", Mr Taggart says.
That aside, insurers have subscribed to the use of big data and artificial intelligence to provide tailor-made coverage to the individual customer, and to underwrite, price, pay and issue them in real time.
Patrick Menard, partner of financial services at Ernst & Young LLP, says insurers are now considering the use of blockchain to help with claims or corporate insurance.
This, as blockchain can be used to create secure and trusted digital contracts. For example, it can be used to provide digital transaction abilities to those without bank accounts across Asia.
Open API also allows fintech (financial technology) and incumbents to use technology services already built and made available and this will enable insurers to provide new offers and services to customers, says Mr Taggart.
Still, he notes that there is work ahead for many insurers who will have to get their architectures ready for such API collaborations.