Innovations can happen when large insurance providers merge their legacy and digital assets and address pain points to speed up their digital adoption, transformation, and evolution.
This is what Richard Bates, president and CEO of Manulife Philippines, said at “Insurtech 2020” held recently.
The conference, hosted by Manulife which also sits as this year’s chair of the Insurtech committee of the Fintech Philippines Association, aims to encourage insurance companies in expediting their digital transformation and innovation processes.
Fintech Association of the Philippines is a nonprofit that pushes the country to become a global player in fintech innovation.
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The Insurtech conference brought together not only insurance providers abut also customers, distribution channels, and stakeholders. Bates is looking at marrying the legacy of large insurance providers and the “nimbleness, speed, and flexibility” of startups to allow the whole insurance industry to accelerate its digital adoption.
By showcasing the innovations in the technology industry, the insurance counterpart will be able to see which of those fit perfectly in their digital strategies.
Until recently, the insurance industry hasn’t been perceived as a poster boy of innovation. But as other financial institutions embrace digital transformation with calls for a broader financial inclusion coverage, insurance companies like Manulife has been incrementally upgrading the middle, back, and front end of the business. Along with the opening of the new office, Manulife rebranded as a digitally inclusive organization.
Bates, an industry veteran with a strong strong background in advancing insurance penetration in emerging markets in Asia, said innovation is tied into the purposes of the business which is “to solve a need for a customer.”
“Technology is there to make the need — and the delivery that need — much more efficient and much easier for the customer,” Bates said. “We find there are certain times where technology actually breaks that chain and changes the entire way that that need is delivered. Innovation is broken down on how that need is delivered and how that solution is provided.”
Bates said certain industries, like financial and banking, evolving much quicker than the others. However, he noted there are different parts of the insurance industry that are evolving in different paces. Different factors, such as the regulatory environment, could be the reason at the insurance industry’s calculated momentum in terms of digital transformation — or in some cases, evolution.
“Transformation has to still revolve around the customer, Bates said. “If we’re not improving the customer experience or not making the customer experience better, then there should not be any point in transforming.”
Middle, back end
Insurance providers can also leverage the legacy assets accumulated over the years such as “making sense of incredibly large volumes of data.” Bates noted the speeding up of the auto-underwriting process as a strategy in digital innovation at the back end. There are companies that have been doing this type of transformation 5 or 10 years ago and it should be considered as a contributor and helps providers protect information or safeguard customers.
“These are incredibly important aspects to what we do and the innovation we need and is absolutely critical to how we are able to continue to deliver what customers expect to see,” he said.
Insurance has its many complexities, which may also be a factor in the current pace of the industry’s digital evolution. Compared to other industries in which products and services were incubated as technology companies, insurance is not. Manulife strategically created services that allow for the familiar (agents) merge with the latest (technology).
Manulife has services that allow potential clients to contact agents at a required waiting period. In the platform, the next available person takes over instantly as soon as the number of minutes elapsed. Simple as it may seem to other breakthroughs, it makes the client feel valued in the sense that their time is given that much value.
“They (agents) must get that because that expectation of your customer is to be pulled within a very limited period of time,” Bates said. “Our job is to make sure we’re connecting so we use the technology to be able to connect the needs of the customer.”
Will there come a time when customers would be able to buy insurance policies end-to-end?
Bates said that could be unlikely “but it’s very possible they will. But when they have enough understanding of the actual product and the complexities because there are some things that we still want to buy in person. You want to learn a little bit more (about the product) that still has that human element to it.”