- John Januszczak – President & CEO at UBX
- Karl-Heinz Jung – CEO at ERGO Insurance Singapore
- Edmund Lim – Chief Ecosystem Partnership Officer at Prudential
- Andrew Yeo – CEO at Income
- Helen Attenborough – COO at Coherent
The panel discussion at ITC Asia 2022 covered topics on the importance of ecosystems in driving new business models in the insurance industry and how ecosystem partners can connect with insurers to offer insurance products and protection across industries. The session also covered key trends and a view of what the future looks like.
Key insights shared by the panel
- There were four key trends observed. The first is to review or re-look at partnerships, especially exclusive partnerships. The second is the emergence of embedded insurance; the third is the evolution of insurtech into insurance as a service; and the fourth is greater customer insights through sharing of collected data.
- The emergence of ecosystems has challenged the thinking around the need for long-term exclusive partnerships because, merchants of other trades can now use insurance products to supplement their business in terms of royalties, and royalties received can go into paying their customers for stickiness. The challenge here is for insurers to discover how to build their journeys into their ecosystem partners.
- The ability of insurance companies to work with ecosystem partners has provided better and greater value to execute at the speed and level of innovation that is demanded of insurtechs. In terms of partnership collaboration with ecosystem partners, there is now a shift from exclusive to non-exclusive.
- Expand the ecosystem by thinking beyond insurance. The future is about building ecosystems such as a health ecosystem, a wealth ecosystem, a SME ecosystem, etc. By integrating the various ecosystems (like AI-driven health tech, telemedicine players, appointment booking players), insurers can look at including embedded insurance as part of that journey.
- A successful insurance ecosystem would be one that provides support to a large existing community or an existing ecosystem. Countries with large, fast-moving consumer goods companies represent huge ecosystems of suppliers, dealers, retailers, customers, logistics providers, and even other financial service providers. These ecosystems have two compelling attributes. The first is that it’s possible to scale up the acquisition of clients based on similar profiles and needs at scale. The second is that the activities that occur in these existing ecosystems are natural or create a natural stream of transactions that you can assess price risk against.
SNACK as a Use Case
- SNACK was embedded into a variety of ecosystem partners, such as VISA, foodpanda, and Thomson Medical. As consumers go about their daily activities, they could make bite-sized payments and contributions to purchase insurance and investments.
- SNACK has 70,000 customers and has issued more than a million micro-policies since its launch. 75% of the customers who bought from the insurer were new to the insurance business and fell into age groups that the insurer had not engaged with previously, i.e., the younger generation.
- Evolution of insurtech and insurance as a service has provided an easier platform for insurers to transfer knowledge and capabilities to non-insurance players. This helps to form a bridge when there’s a lack of digital capabilities between the two parties, and this provides both parties with the right opportunities to ideate and create new propositions for their customers.
- The ability to capture and share data provides all parties with greater customer insights and the ability to innovate as they continue to enrich the propositions they can offer to their customers.
Agents still play a big role in the insurance ecosystem because, in the end, insurance is sold, not bought.
The emergence of ecosystems implies that insurers striving to provide an omnichannel customer experience must be prepared to work with diverse channels to offer different products to different customers. Partners must realize customers do demand distinct, varied interactions for different products. Whether it is mobile-first or digital-first, different channels need to be brought in.
Simple products will help with engagements but as they move up the value chain, depending on the ticket size as well as the complexity of the products, that’s where the entire omnichannel will require interactions with other kinds of channel to fulfil the transaction and offer a sticky omnichannel customer experience.
Additionally, all parties must rationalize and agree that while commercial benefits and profits are important, so too are customer service and experience. Letting commercial benefits derail or limit the ability to create an omnichannel experience will short-change the company’s growth opportunities and customer satisfaction in the long run.
Building the insurer and ecosystem partnership
- Insurers will need to be open to collaborating with agile ecosystem partners. Both parties will need speed, as well as flexibility, and they must be open to each other.
- True participation entails both participation and involvement. Hence, working with partners to share data and insights so that each campaign can work and improve should be a priority. It will not work to carry a mindset of shifting responsibilities just because a marketing fee has been paid to access the ecosystem.
- Finding like-minded partners is a must because when times are tough, partners can rely on their alliance in terms of the value system and expectations to overcome obstacles together.
Key opportunities for ecosystems in the Asian insurance market
- Partnerships and embedded insurance will form part of the omnichannel customer experience.
- Embedded insurance product design will become simpler and more invisible, lowering the barrier to entry, and making it less daunting for consumers to choose an insurance product during the purchase journey.
- Increased use and adoption of microinsurance offerings to aid customers in moving up the value chain.
- Open digital platforms to aggregate and virtualize insurance products into disassembled insurance products to be offered across a multitude of providers.
- Monolithic products are broken down and reassembled into hyper-personalized insurance products embedded in the customer journey, enabling acquisition at scale.