By Kyle Wong, Ph.D., FRM and CFA
When most people think of insurance, we think of a salesperson giving the sales presentation in a coffee shop. If the sale is closed, the customer is asked to do an old fashioned medical check-up. Then the customer is asked to complete a very long application form. The way insurance is sold has been pretty much the same for many centuries. Insurance is not associated with technology. However, according to Mr. John Brisco, the Chief Information Officer and Chief Operating Officer of Manulife Asia, things are going to change. The change will start in Asia.
In a talk titled “InsurTech: We didn’t start the fire”, John explains that less than 6% of Asian population has life insurance. To serve the remaining 94%, relying on agents will not be enough. Technology is able to bring insurance to many places that do not have enough agents. Technology can help customers to better understand insurance products.
Data analytics can help insurance understand their customers better. It will lead a better pricing. In Hong Kong, Manulife has launched Manulife Move, which provides their customer with either a Fitbit or Misfit. The wearable monitors the amount of exercise done by the customer. More exercise will be rewarded with a lower premium. This is an excellent application of the Internet of Things.
John commented that insurance companies tend to rank very low in costumer loyalty. Many costumers either don’t understand the products or have experienced bad service. InsurTech hopefully can provide better customer service and lead to higher customer satisfaction. InsurTech can significantly reduce the amount of paper work.
John also gave some advice to InsurTech start-ups. Don’t count the incumbents out. The major insurance companies are building innovation labs all over the world. So the incumbents are becoming start-ups too. Also many start-ups don’t understand the needs of the incumbents. While Manulife targets the high end Asian market, the start-ups are often providing mass market solution.
In InsurTech, a major advantage of Asian countries is that the regulations tend to less strict than those in the West. Some Asian countries, in particular China, is much more progressive in InsurTech. In China, customers can buy insurance on Wechat and Weixin. Also technology allows fully customized products such as insurance of any term. John is also very bullish on InsurTech development in Tel Aviv, where they are plenty of startups doing InsurTech, AI and Data Analytics. John thinks Hong Kong regulators should allows Hong Kong to catch up with the Asian rivals.