The rate of digitalisation in Southeast Asia was fast-tracked after COVID-19 hit late in 2019 as governments in the region mandated lockdowns to curb the spread of the virus. This forced many office workers to quickly adapt to work from home arrangements and school-going children with online home-based learning.

In 2020, it was found that 40 million new users came online, and 95 per cent of consumers who formed new digital habits in 2020 due to the pandemic, have since fully integrated them into their daily routines.

As the pandemic wears on, it has become apparent that certain insurance packages, or health and wellness benefits may no longer be relevant due to the new ways of working with the workforce being more distant from office.

A recent Swiss Re COVID-19 Consumer Survey revealed that 68 per cent of respondents in Southeast Asia consider the availability of an end-to-end digitalised journey the next most important factor when choosing their new insurance policy after pricing.

This is a good opportunity and the right time for the insurance industry to accelerate their digital transformation in order to meet customer expectations.

Disruption in the insurance industry has been extremely limited, limited to consumer discovery, compare and purchase experience along with churning out faster and efficient policies.

Job bands, level based standard employee benefits and group benefits worked well 20 years back where the workforce was homogenous, however with a diverse workforce and newer ways of working such as work from home, the traditional one size fits all approach has lost its shine.

With the large younger workforce being added, this generation is expecting a personalised and customised experience which barely exists in the current benefits.

Holistic health and pre-emptive insurance

The definition of health and wellness has also shifted in the last decade. Twenty years back, “Mental Wellness” was not a common term used in corporates.

As people struggle to find work-life balance due to remote working, there has been a rise in discussions among employees on health and wellness – a topic that has come under the spotlight due to the pandemic.

With a significant shift with millennials joining the workforce along with the change in the external variables, the health and wellness definition is going beyond the standard group insurance and company organised health events.

Also read: How Manulife aims to make lives better and healthier in Asia through startup partnerships

For some employees, going to the gym or even listening to music is health and wellness, but for others, it might be hospital coverage and retirement planning.

The spectrum is vast and rapidly changing, and thus, the regular traditional group insurance is no longer excite, attract or engage the employees, thus defies the core reasons why Companies give health benefits to employees. Companies should offer benefits that are more relevant and are customised to suit the needs of the diverse workforce.

SMEs– A massive underserved segment

In Singapore, SMEs contributed to 43 per cent of the nation’s GDP in 2020, and employ about 70 per cent of its workforce. Despite being a key pillar of Singapore’s and every country’s economy, SMEs are an underserved by insurers due to high cost of acquisition due to high reliance on distribution channels, smaller premiums and manual processes, thus have low ROI and not profitable in the current construct.

What can insurers do differently to cater to this segment? With SMEs being increasingly multigenerational, represents 70 per cent of the markets’ workforce and becoming adopting more technology in their workflows, insurers have to focus on creating a digital experience where SMEs can come and give their requirements and the platform can provide optimal plan options based on the SMEs needs.

This should be an end-to-end digital journey for the SME, where they can search, sign up, adopt, onboard and employees can personalise their benefits and start using the company benefits as compared to waiting for an agent to call after filling up a lead generation form.

Some insurance industry players are happy with the 1.5 per cent conversion on leads, where SMEs have called into to check on group insurance, which is a complete disaster as they would miss out on the 98.5 per cent who had a need and went through the entire process.

The pandemic has not only disrupted many businesses globally but it has also demonstrated the value of insurance protection. SMEs are more likely to review their insurance policies during this pandemic for business continuity and protection.

As group insurance is being further commoditised, price wars between insurers and lower sales closure rate, together with a high productivity rate, insurers should take the opportunity to offer a simplified and personalised experience to entice SMEs to take up coverage, helping them to convert sales at a lower cost of acquisition and also enabling a direct relationship with the company and their employees.

Insurance companies which can offer SMEs the right and relevant services and products through online channels will have the competitive advantage.

Singapore serves as a good test bed for new innovation

Singapore is a small, highly controlled market with multiple insurance players. It also has one of the highest insurance adoption rates in the region with an average of 1.7 insurance coverage per person compared to Indonesia, where only 13 per cent of its population has access to insurance coverage.

Also read: Why Asia’s insurance industry is poised for collaborative disruption

The city-state has also nurtured a supportive tech startup ecosystem with a lot of support from the government, with grants from Enterprise Singapore and the Monetary Authority of Singapore, which helps new, innovative startups to move at a faster and effective pace.

The region also always looks up to Singapore as a hub for innovation. Therefore, whatever new innovations that work well in Singapore will become extremely easy to replicate in other markets.

Future of the insurance industry

Generation Z, which forms part of the young and diverse workforce today are used to a customised and personalised experience. A survey commissioned by WP Engine revealed that 75 per cent of Gen Zs are more likely to buy a product if they can customise it.

The ability to personalise and customise insurance will be a critical aspect for insurers in future. The insurance target audience is getting more evolved and consumers are increasingly asking the question of whether an insurance coverage package meets their requirements, and what’s in it for them.

Even in terms of marketing efficiency, currently the cross sell and upsell are inefficient from a conversion perspective. There is significant opportunity for a platform which can analyse work life, health, fitness data and actively recommend the right products and services to the relevant users.

With the capability of offering a customised and relevant user experience, this will help create employee engagement, thus leading to enhanced stickiness and with enhanced relevant marketing, it will help create additional monetisation for the insurers.

Group insurance is just ripe for disruption. With the ability to tap into the SME segment with an end to end digital experience, providing a personalised, customised and holistic health and wellness experience to employees with enhanced marketing and analytics capabilities, it’s a great opportunity for insurers to maximise the impact and win the market.

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