``Millennial buyers and the maturity of digital tools will bring about profound change in insurance distribution models''

Though markets are very different across Asia, almost life insurers now have a digital transformation programs in place in the region, says Alby Van Wyk, Executive Vice President, Asia, Munich Re Automation Solutions. In an exclusive e-mail interview with Asia Insurance Post, he explains how the requirement and demand for IT systems that enables faster delivery and greater agility, will only continue to grow in Asian markets

Alby Van Wyk, Executive Vice President, Asia, Munich Re Automation Solutions

 

How do you see the situation triggered by the Covid-19 Pandemic and its extensive impacts on insurers?

The biggest challenges and impact insurers are facing due to Covid-19 are:

(1)the inability to sell face-to-face (this is pretty much how insurance was sold to date)

(2)the difficulty to get medicals done for applicants, where medical requirements are necessary

(3)the challenge that agents have in obtaining leads (insurance remains a product that generally is not bought but needs to be sold by agents).

How are insurers facing the pandemic and should they prepare themselves for the long term or short period?

I spend most days talking with insurance execs and it’s struck me how multi-year “digital transformation strategies” have been condensed into actions that deliver results in months. This has led to how quickly new virtual interactions have been enabled, AI/predictive initiatives set in motion and cloud-based, digital services have taken off.

In terms of whether to prepare for the short or longer term, our view is that convergence of Covid-19, Millennial buyers (who are more native digital users) and the maturity of digital tools will bring about profound change in insurance distribution models. The fact that virtual interaction models have been implemented and are working well and that research is revealing that agents are more productive and consumers are very accepting of virtual interactions, means that in our view, there is no going back.

Do you think, going digital is the only way to go for the insurance industry?

Yes, with very little doubt.

What are the solutions or products Munich can offer to deal with this ongoing situation?

•New cloud-based digital services – Allfinanz SPARK and Allfinanz NOVA – for insurers wishing to implement automated and augmented underwriting and analytics solutions

•Technology and consulting expertise / services to help insurers develop (including risk assess and price) and deploy AI/Predictive models real-time as part of an application process.

Do you think there is a gap between business growth and investment in IT system for the APAC insurance and wealth management industry?

Based on our own experience, investment has picked up significantly in the past 12-24 months. We did a deal a month over the past year, which is more than double the average of the prior 4 years. This is also in line with the insurance industry growth potential across Asia, which has been driven by the broadly growing middle class, the large health and protection gaps that exist and the paperless and digital transformation programs implemented by insurers needing to deal with this growth.

Does the APAC insurance industry have any legacy problems?

Markets are very different across Asia. This means that there are legacy issues in patches. We help in modernization by moving back office underwriting functions to the front office (via our ALLFINANZ POS underwriting solutions) and in so doing also taking on functions that were previously expensive to maintain in legacy systems (such as calculations functions) and supporting this through our modern digital services solutions.

How rapidly are global IT systems evolving and how dynamic are the IT systems in insurance?

I would say that just about all life insurers now have a digital transformation programs in place. The requirement and demand for IT systems that enable faster delivery and greater agility, are cloud-based (allowing insurers to transfer operational risks), future-proofed for the coming AI revolution proper and mobile first ultra-customer centric will only continue to grow.

What are the APAC markets you are focusing? Which are the advanced APAC markets from the IT point of view?

All markets across Asia Pacific. China is the most advanced, followed by Japan.

How digitally deficit are Indian life insurers? Are you also focussing on the Indian market?

The Indian market is perhaps just “behind the curve”, but there is now strong movement towards digital.  India is a big focus for us.

Munich Re Automation Solutions claims to revolutionise the way life insurance is bought and sold, using next-generation technology. What are your future plans on this? In what way you are different than others?

We now offer Cloud-based digital services and are setting about enabling - with our underwriting and analytics technology toolset and AI/predictive consulting and model development capability – a true revolution in how life and health business will be bought.

Our differential lies in the unique combination of technology able to effectively deploy models, and expertise in building them together with the capability of “putting our money where our mouth is” and offering to reinsure the business processed through these models (something a consultancy could never do). This ability to develop, get exec signoff and then actually implement/deliver and take the risk on models deployed is, in many ways, a unique proposition to be in.


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