Ride The Waves Of Technology, Or Get Swept Under The Currents Of Change
2021 was a horrible year. Donald Trump continues to make horrible statements in his second presidential term. We saw more earthquakes and hurricanes in a single year than the past 5 years combined. More than US$300B was spent on rebuilding disaster damage, and reinsurers suffered massive losses. After the war on terror, the world is still recovering from the North Korean campaign. Markets have yet to recover to the highs before the great market crash of 2019, In the world of Insurtech, however, things were a little more rosy.
So what were the biggest moments from 2021?
Changes in industry regulation and distribution channels
After Ravi Menon’s speech back in 2016, financial institutions delivered within 2 years. Online direct distribution has finally picked up traction, after staying stagnant for more than 5 years. Finally, roboadvisory has gained mainstream approval outside of the investment landscape, comparison portals have come and gone, and 2021 saw them account for more than 25% of the total policies sold for the first time. Singapore’s regulation sandbox continues to break boundaries, and cutting edge technologies no longer face the stigma of being fly-by-night. Cloud computing has become the norm, as the great financial data leak of 2018 brought about the necessity of more advanced data protection.
Financial advisers also continued to chip away at the sub 40% market share of tied agents. Leveraging on new platforms, bancassurance continues to dominate, having most of the market share.
Changes in core technology and increase in competition
As more innovative ways were introduced to price policies and help with underwriting, and paperwork being reduced to almost nothing, insurers have reduced back-end costs drastically, and these savings passed on consumers. Smaller insurers which have not bankrolled such adoption suffered revenue decline due to more discerning consumers, who have embraced such changes in the last 5 years.
Other blockchain based and cryptocurrency related platforms now offer more transparency than ever before, and early adopters are already excited at the prospect of even more savings. Friendsurance continues to plow through the competition by offering their product in Asian markets, making it the first P2P insurance available in most of the developed world. They are not without competition though, as greater adoption in Greater China for homegrown darlings such as TongJuBao.com and P2P Protect bring them to new heights.
Changes in customer behaviour
Consumers have been shunning direct contact for a long while. Since the 2015 regulation of certain prospecting methods, consumers have generally avoided roadshows and street surveys, even more so after 2017.
Insurtech also allowed consumers to depend on a myriad of platforms to augment how they manage their policies, cutting the value of regular insurance agents even more. 2021 also saw a record high of consumers purchasing via online intermediary insurtech platforms in Singapore.
What can we learn to ride this wave?
While these changes seem radical at this point in time (if you are too immersed, it’s still 2017), one very simple is to keep ahead of things. If you are an adviser or agency leader, consider signing up for a Synchestra plan if you haven’t already done so. Even though we can’t stop the future from happening, you can still leverage on technology to reach out to your customers, offer relevant advice, and even keep them engaged. Customer satisfaction is no longer enough, as customer engagement is deemed the key to retaining your best clients.
Insurance, especially Life Insurance is still highly dependent on proper advice, so consumers are still aching for the right expertise to guide them towards the right product. Think about it, how many customers actually do give you price as an objection? So don’t compare yourself to technology. Let technology work for you, so that you can get the results you want.