Going digital means going all the way

Many insurers try to go digital, but often their efforts are incomplete, says one insurance leader

Going digital means going all the way

Insurance News

By Gabriel Olano

In March, the Monetary Authority of Singapore issued guidelines that allowed insurers to offer all types of life insurance policies online, directly and without the need for advice from an agent or financial advisor. This was a significant step for the ongoing digitisation of the insurance industry, as it gave insurers more freedom in selling products.

Many insurance companies in recent years have embraced going digital, but go about it in different ways.

Rethinking the entire business model
According to Abhishek Bhatia, chief executive officer of FWD Insurance Singapore, insurers often think that having a company website or online registration form is enough. This, he said, is incomplete, citing how some insurers just upload on their website the same lengthy application forms, which need to be printed and filled up manually.

“We believe that the digitization of the industry needs to move beyond a company’s website or an online form,” he told Insurance Business. “It should run across the entire business model – across all customer touch points, internal operations and back-end processes, as well as sales and product platforms.”

Bhatia said that in going digital, insurers must rethink their entire business model. He elaborated that currently the Singapore insurance industry is still geared towards the traditional agency channel, and insurers’ online presence is merely to guide the customers towards meeting an agent. Unlike many other insurers, FWD does not recruit tied agents.

The industry is in a transition period, Bhatia said, and it will take quite some time before fully taking effect due to the massive changes to how insurers do business.

Responding to the MAS directive
After the MAS released the regulation about online life policies, FWD released a product of its own compliant to the new guidelines, anticipating the evolution of Singapore’s life insurance industry according to changing consumer habits.

“Earlier in May, we launched our Term Life Insurance, which is aligned with the MAS guidelines that were issued to safeguard consumers when buying life policies online without the presence of a middleman,” Bhatia said.

In fact, he thinks that the insurance industry is behind other sectors when it comes to adopting digitisation.

“Consumers in Singapore have been purchasing their flight tickets and hotel stays through online platforms without going through a travel agent,” he said. “In addition, thanks to online portfolio management tools, more and more consumers are managing their own finances, including investment activities such as the trading of securities.”

FWD’s and Singapore’s roles in the Asian insurance industry
“Singapore may be small in size, but it is big in value as it leads the region in per capita income,” Bhatia said. “At a macro level, Singapore is the gateway to Southeast Asia.”

While digitisation of the insurance industry in Singapore is lagging, he remains optimistic about its prospects. He lauded the government, particularly the MAS, for being supportive and installing the necessary infrastructure for insurers to go digital, as well as protecting consumers’ welfare. 

For FWD, Singapore is also a gateway, as prototypes for the insurer’s products are produced and approved in Singapore before being introduced to the other markets in the region.

FWD Insurance, headquartered in Hong Kong, also has operations in Singapore, Macau, Indonesia, the Philippines, Thailand, and Vietnam. Aside from life insurance, it also offers vehicle, travel, personal accident, and maid insurance.

With regard to the company’s future plans, Bhatia said: “Plans are in place to spend SGD500 million to grow our presence locally. A large portion of that will be spent on claims-related experience, investment in technology and people over the next five years.”

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