28 Nov Insurers are left behind in the insurtech digital innovation race: distribution and affilate partners are ahead of game
It’s been an exciting first week at the Supercharger Fintech Accelerator that was launched in Kuala Lumpur on September 26th 2017 with the support of Standard Chartered, Allianz and the Malaysia Digital Economy Corporation (MDEC) to spearhead Insurtech and Fintech in South East Asia.
As one of the Co-Founders of Neosurance, which has been selected together with other nine start-ups among over 100 applicants from over 30 countries, I had a privileged perspective over the sentiment of the incumbents in the Region.
The key but-not-that-surprising takeaway of this first week is that financial institutions, and insurers more than others, still struggle with innovation. Matthew Norris of Standard Chartered and Joseph Gross of Allianz Life Insurance were very straightforward in their opening speeches and in their call-to-action to the crowd.
This could be the reason why insurers’ efforts have been mostly directed to the creation of digital assets to replicate what players from other industries have been doing in the last two decades. And that’s probably why we continue to hear that insurance policies are still sold, not bought.
The result is affecting not business alone, but for our communities at large. Take for instance Malaysia, which is a good example of the general state of the insurance industry in South East Asia and where individuals are heavily underinsured. As estimated by Bank Negara, the annual protection gap per household in 2016 is between 550K - 723K RM (127K - 167K US$), meaning that average Malaysians are exposed to risks that could potentially ruin their lives. This attitude translates in a substantial underdevelopment of the sector, whose weight against the GDP is estimated by the Ministry of Finance Malaysia at a steady 1.4% versus the average 7.4% of Europe (Insurance Europe, 2016).
The good news is that not only insurers are aware of the need to innovate and of the challenges they need to tackle, namely tall hierarchies, intricate bureaucracy, rigid budgets and lengthy resource-allocation processes that depress ideas and chock innovation initiatives. In fact, they have become aware of the need to partner with Insurtech start-ups and are committing dedicated financial and managerial resources to overcome the hurdles.
During the days immediately after the launch, we had the opportunity to start interacting with the incumbents and share how Neosurance white-label plug and play SDK is able to understand when an “insurable” event is about to happen to deliver a relevant policy on the users’ smartphone, when and where it matters the most. All acknowledged that we live in a hyper-stimulated society, where immediacy, customization and emotional engagement are the new imperatives to meet customers’ expectations.
The scenarios where Neosurance technology can be applied are aplenty and no limits to the products that can be offered by insurers are posed.
Travel is these days one of our favorite pass time. We might visit our relatives in our hometowns or just head to a week end gateway to cleanse from the hectic urban lifestyle. In such instances, Neosurance can push a microinsurance to our smartphone to cover our trip for just few bucks.
Another case in which Neosurance technology can be exploited is at the airport. Through the interaction of our smartphones with digital sensors or apps, we can receive a push notification offering a baggage insurance when we are about to drop our suitcase at the check-in counter, and avoid the hassle of lining up to wrap the luggage (and struggling to unwrap it once we arrive in our hotel room) or worry that somebody may go through our belongings for the entire duration of the flight.
An additional risk Neosurance can target is the risk of incident while practicing sport. Runners, and athletes in general, tend to underestimate the risk they expose themselves for they are typically not completely aware of how expensive medical treatment can be and therefore are not covering their recreational activities. With Neosurance, runners will receive a convenient casualty insurance to protect their risk for the cost of a coffee or even less.
Neosurance technology can deal with even more complex situations and push the right insurance product at the right moment, by detecting and connecting the context with the behavior and the emotions of the user.
The key success factor will lie in our capacity, and the willingness and capacity of our incumbent partners, to explore each possible use case to design how to deliver the right product at the right time. Imagine for instance a runner preparing for the race. Would she appreciate a microinsurance proposal minutes before the race starts or would she be more willing to consider such proposal the night before the race when she is ensuring her running gear is in order and preparing mentally for the day to come?
That’s the journey awaiting us and our partners during the next three months of the Supercharger, co-creating smart micro-insurance products relevant to communities and individuals to start closing the huge protection gap in the region.
More updates coming soon!