The ecosystem is expected to experience a paradigm shift with increasing number of insurers looking at digital transformation to stay competitive and to engage customers better by offering more partnerships and collaborations with digital disruptors, relaxed insurance regime, customer-centric product innovations, infrastructure enhancement to reduce paperwork and faster claims turnaround, wearables and healthcare-related initiatives. Top five technology trends include Artificial Intelligence, Machine Learning, IOT, Blockchain, Robo-advisory, Predictive analytics.
As of 2016, key drivers that catalyze digital transformation for the Life Insurance Industry in Singapore include and are not limited to the pressure for digital transformation to ensure cost efficiency, minimized human errors, enhanced competitive advantage, and better customer engagement with digital-savvy clients. Key challenges that insurers are facing include the willingness to spend on revamping back-end infrastructure, unclear expectation on the cost versus benefit of digital transformation, challenges in hiring skilled workers who have the adequate know-how and skills to implement and operate advanced technology systems, perceived high reputation and financial risks on loss or infringement of data and customer sensitive information from cyber-attacks.
The Life Insurance Industry in Singapore predominantly has a few major insurers offering Life Insurance products for both individual and corporate clients. Examples of such insurers include, AIA, AXA, Prudential, Manulife, Aviva. However in recent years, the industry has witnessed an influx of regional offices and business innovation centers in Singapore led by large insurers such as Metlife, Sompo, Ping An and many more. This is due to the Monetary Authority of Singapore, actively encouraging foreign players to enter the market to offer innovative products to encourage competition and more digital innovation within the ecosystem to prepare the country to be a Smart Nation and a future economy envisioned for a digital-savvy generation. In addition to the availability of low-cost technologies, there are many non-traditional insurers (also known as insurtech companies) entering the market with new business models offering products and services via digital channels such as chatbot, robo-advisor, and mobile app. As the cost of setting up such operations is low, they are challenging the status quo by disrupting how traditional insurers do business and their product designs and pricing strategies.
In this study, not only have we reviewed how technology plays an integral role in providing the primary impetus force to disrupt the industry, we have also identified some key strategic imperatives for success and growth. Essentially, to stay competitive, it is important that an insurer consider the following success factors:- (1) adopt digital transformation by integrating key technologies such as Artificial Intelligence, IoT, Predictive Analytics; (2) enhance back-end infrastructure and systems; (3) adopt customer-centric engagement strategies; (4) extend wearable devices and healthcare services; (5) partner and collaborate with digital disruptors such as robo-advisory startups, healthcare app startups, peer-to-peer insurtech startups; (6) engage and constantly communicate with regulator such as Monetary Authority of Singapore for effective feedback mechanism to drive legislation changes for a more relaxed insurance regime.
In conclusion, over the next two years, the Life Insurance Industry in Singapore will become more vibrant with innovative business models; more foreign insurers and insurtech startups entering the market offering innovative products and services at competitive prices; more venture investing; more partnerships with wearables device providers and healthcare services providers; and a more digital-friendly insurance regime.