For Allianz Asia Pacific Life & Health CEO Anusha Thavarajah, Asia is the most exciting region for life insurance - with rising affluence and shifting trends in wealth and technological innovation marking the start of what she believes is going to be "a truly exciting decade".
Opportunities in the region abound, given the low penetration rate of life insurance, and with increasing trends in non-communicable disease, she expects a more pronounced shift to protection and health products within the sector.
“Health & wellness is another interesting area which will create lots of value for customers, health service providers and insurers in the Asian region,” she said. “We are already seeing a new trend where various innovative services are being offered in Asia, so watch this space!”
The increasing availability of data also means that analytics will continue to play a bigger role in the industry. “Though we are still a few steps away from material value realisation, data analytics as a function will inevitably play a major role in value generation for us. For example, in improved customer centric offers and engagement, and enhanced customer value management capabilities,” she said.
Stepping into the unknown
Ms Thavarajah is a firm believer in life insurance as an industry that can make a difference to society. But while insurers are in the business of taking risk, they also need to ensure that what they take on is within their risk appetite.
“Today, the dynamics of what we insure has changed and continues to change. COVID-19 has brought in a new dimension of unknown, which is somewhat of a concern, as we start to review underwriting and product design,” she said.
“Pricing for the unknown risks of COVID-19, medical inflation, new diseases like dementia, rising incidence of non-communicable diseases like cancer and diabetes are all top of mind.”
Technology as a solution
Fortunately, the advancement of technology means that there is a range of tools that can help insurers address the challenges they face. Ms Thavarajah brought up some examples such as how the use of AI, blockchain and analytics to improve offerings can help make underwriting more intuitive and personalised as well as reduce fraud and help in managing claims cost inflation.
However, she also highlighted that while there are thousands of apps being introduced daily, most are still very much focused on marketing, sales and customer acquisition using incentives and points to get access.
“Digital health has immense potential and social applicability across the value chain. Telemedicine, sensors to track post recovery care, health engagement to control chronic conditions and wearables for activity tracking are just some examples,” she said.
“Insurers are a clear stakeholder as we fill in the potential out of pocket health care costs, and the private health insurance cost. As we look at this longer term, the path that digital health will and needs to take is to start to move away from discounts, gadgets and marketing, to instead focus on engaging and promoting better health behaviours, track outcomes to see if there is sustainable improvements in health indicators, and target preventive care.”
In addition, technology will also help insurers educate and raise awareness of the benefits of insurance, particularly in remote areas that contribute to lower life insurance penetration.
“There is a huge opportunity for insurers to engage more in this segment with customers who are young and underinsured, with increasing access to the internet, cheaper cost of smart phones and overall adoption of digital tools,” said Ms Thavarajah.
“One last point I would like to make is that as big a role tech plays in life insurance, the human touch will be forever present. The key is to digitally enable the experience,” she added.
While many of these signs point to a bright future for the life insurance industry, the drawn-out battle against COVID-19, with many markets now seeing new waves of infections, does cast a certain degree of uncertainty in terms of what we can expect.
Nevertheless, Ms Thavarajah will continue to play an important role in educating and supporting customers through this difficult period.
In the near future, she expects to see investments increasing in:
- Digitalisation – the quality of tools will significantly improve greater digital adoption and overall reduction in operating costs.
- Analytics – will start to materialise value in the next 12 months and lead us to develop more cost efficient and innovative products and services.
She also hopes that there will be significantly higher contribution of the insurance sector in the economy, better collaboration between insurers, health providers, government bodies and the overall industry leading to more efficiency and transparency.
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