“ Monthly Newsletter tops & flops

Monthly Newsletter - Insurance in Asia
Issue 1 - October 2014
Editorial
Vincent KASBI
Head of Asia
“
The evolution of the insurance market in Asia is driven by a combination of
factors: the rise of the middle-class, urbanization and digitisation. The
customers emerging from this evolution have new requirements, which in
turn drive the strategies of insurers in the region. In this newsletter we share
our insights on the industry’s hot topics and trends.
tops & flops | September breaking news


ASEAN Insurance Council launches Singapore
insurance summit (http://bit.ly/insurancesummit)
Payment industry says ApplePay is great news


Hong Kong: winners of inaugural Hong Kong
Insurance Awards unveiled (http://bit.ly/hkiawards)
Buffet and Greenberg see insurance expansion
opportunities in Asia (http://bit.ly/asiabuffett)
Asia still has a huge catastrophe insurance gap
(http://bit.ly/asiacatins)

(http://bit.ly/payapple)

”

Reinsurers need to stop “Me Too” approach
and be different (http://bit.ly/reinsmetoo)
Expat investors launch suits against adviser,
trustees and insurance firms
(http://bit.ly/expatsuits)

Singapore op risk charge 16 times greater than
Solvency II (http://bit.ly/sgoprisk)
Sources: Asia Insurance Review, Bank IT Asia, Post Online, risk.net
interview | Reducing the cost-to-serve
 An insight by Victor Paraschiv, Senior Manager at Sia Partners
Have you noticed different cost-to-serve levels between Europe and Asia?
The level of maturity in Europe forces insurers to focus more on the cost side
of the business equation: being able to serve similar products at a lower cost
points gives more leeway in terms of either margin or discount. The Asian
insurance market is dominated by ultra growth, where the top line is much
more influenced by the distribution (its breadth and performance in turning
over products) than by pure price comparisons.
How can cost-to-serve support insurers strategic orientations?
As certain product segments mature in some Asian markets such as Hong
Kong and Singapore, the redistribution of focus from a top line growth to a
bottom line growth, nimble insurance companies will deploy the re-align
each product’s distribution strategy to it’s maturity level. Being able to
monitor the evolution of cost will enable this gear shift at the right time and
preserve their strength for battles on other fronts.
Who is Victor?
Experience: 13
years
Languages:
English, French,
Dutch, Romanian
Victor has led multiple business
transformation programs, both on
the business side (Target Operating
model, business process,…) and
the IT side (IT project portfolio
management, architecture, system
implementation,…).
With a wide knowledge of
Financial Service companies across
Europe, the USA and Asia, he
devises solutions from Front to
back office.
Does cost-to-serve still have a meaning in our digital times?
Digital introduces new ways of working but also uncovers opportunities: to identify the customers and
propositions which are less profitable (through data analysis) but also to increase the reach of products which
have a high profit (faster distribution, omni channel, personalised marketing,… ) and the penetration of those in
interesting segments (identified through big data mining). As such, Digital innovation empowers these actions.
New York | London | Hong Kong | Singapore | Dubai | Abu Dhabi | Riyadh | Casablanca | Bruxelles | Amsterdam | Roma | Milano | Paris | Lyon
CONFIDENTIAL © 2014 Sia Partners
Website : http://www.sia-partners.com/us/ | Blog : http://en.finance.sia-partners.com/
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Monthly Newsletter - Insurance in Asia
Issue 1 - October 2014
“
digital | Apps are coming
Who said that insurance is digitally lagging behind
other industries? This sector can hardly be described
as an ‘early mover’ and yet, with advances in mobile
device technology, it is ripe for development. A new
generation of technology-savvy users is inspiring P&C
Insurers for car (telematics), home (domotics) and
health (connected objects) policies.
As full-web subscription raises regulatory issues
(declarative data quality, fraud detection, reliability of
electronic signature), current apps focus on pre-trade
and post-trade services rather than on selling, such as
self-care (belonging inventory, accident report) or selfmonitoring (Pay How You Drive).
This nascent surge for digital within financial services
reveals a global fear of cannibalisation of the in-store
consumption. However, customers are not, as yet, ready
to abandon their traditional buying habits. Digital
strategists and branch lobbying will thus have to
collaborate to devise an innovative mobile-centric third
approach. The question might be: to app or not to app?
YouDrive
Conduite
Connectee
Home Gallery
App
Snapsheet
GoodRide
PRUproduct
Pay How You
Drive app
Pay How You
Drive app
Inventory your
belongings
Capture images
of a vehicular
accident
Help riders track
their route, time
and mileage
Help agents in
the CRM
2014
2014
2013
2011
2014
regulation | Taming operational risks
Solvency II is moving beyond European boundaries, an example of
which is the introduction in May 2013 of the Chinese Regulator’s (CIRC)
C-ROSS framework (China Risk Oriented Solvency System).
China is in a unique position, and faces endemic challenges: a
sustainable premium growth (annual rate around 18% over the last 10
years), an increasing consumer demand for insurance (due to
urbanisation, middle-classification) and regulatory strengthening. These
factors prevent insurers from copy-pasting European Solvency II locally.
C-ROSSininaanutshell
nutshell
C-ROSS
3 objectives:
1. Link more closely capital
requirements to risks
2. Ensure China’s insurance
industry solvency
3. Set up a supervision for
emerging countries
Tips to avoid the me-too trick:
Institutional
characteristic
Pillar 3
Market
discipline
It is probable 2015 will be the year the rising Chinese insurance market
becomes structured, and with this new strength China stands to take the
lead in Asian for solvency initiatives.
A pyramidal organisation:
Pillar 2
Quanti.
Identify cultural shifts
Take into account market maturity gap
Adapt solvency requirements to the capital injection needs
Tailor ORSA-like requirements to Asian risk management processes
Recruit local talents (actuaries, project managers) to make the change
Pillar 1
Quali.





Supervisory foundations
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CONFIDENTIAL © 2014 Sia Partners
Website : http://www.sia-partners.com/us/ | Blog : http://en.finance.sia-partners.com/
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Monthly Newsletter - Insurance in Asia
Issue 1 - October 2014
this month, let’s focus on… | Harnessing convenience while serving customers
Let’s be clear: Customer Convenience should not be understood as an umpteenth industry “revolution”, but rather
as a fresh perspective on insurance, for both customers and insurers. In others words, Customer Convenience
sounds like your Granma's secret recipe: “care about your customers” (with the proof being in the pudding).
Recipe for a good Customer Convenience mix
A pinch of
Customer
Centricity
THINK CUSTOMER - Being customer centric means finding the most valuable customers
and serving them with the best user experience on the touch points which matter most
(from the client’s perspective). It means providing a constant interaction model (push/pull,
seamless cross-channel), capturing the clients’ feedback and being innovation-responsive.
A measure of
Engagement
WAKE LOYALTY UP - The main 5 considerations to engage your customer are the following:
customize your offers/products, leverage mobile and geolocation, boost your CRM, trust
and take advantage of social commerce, define your purpose and communicate it clearly.
MAKE IT EASY – As the Rolling Stones would say – helping your customers find their
satisfaction requires an understanding of their two types of need: the ones they are aware
of and the ones they are not yet. Insurers have to identify and leverage these two
categories to make their clients’ life easy:
A dose of
Satisfaction
A quart
of Data
- Operational issues
• Pre-transaction (seamless journeys,
online quotes save-up, ROPO…)
• During transaction (electronic signing, instore forms auto-filling thanks to online
quotes…)
• Post-transaction (cross-selling, up-selling,
claims management…)
- Communication issues (recommended
communication channels adapted to
call centres’ workload, web call back
or
chat,
claims
management
optimization, information quest…)
KNOW YOUR CUSTOMER - All roads lead
to customer touch points. Insurers need
to accurately collect, analyse and use
their data goldmine. Historically at ease
with handling data, the real challenge for
insurers resides in data quality first and
data leverage second.
Zoom on… | the data quality challenge
Common issues
1.
2.
3.
Data quality level: often undefined and
difficult to interpret
A low level of data quality is expensive and is
one of the biggest cause of scarce resources
waste
The supply of reliable information is critical
1.
GARBAGE IN, GARBAGE OUT - Accuracy,
completeness, accessibility: three challenges
that insurers have to cope with to assess their
consumer’s risk. Poor data quality lead to poor
analysis and a mis-knowledge of customers,
resulting in erroneous risk assessment and
weak CRM.
2.
THE COST THREAT - Large data quality
improvement projects have a high, scary cost,
when in fact leveraging existing databases and
data warehouses can answer most insurers’
needs and lead to greater operational
efficiency.
3.
THE RIGHT APPROACH - Understanding what
quality means to insurers is key to mitigating
these issues. Defining data quality implies that
insurers have to first refine their customers’
expectations on the one hand, the
transactional and relational schemes they
want to offer on the other hand. Only
thereafter can insurers list the data they need
and the associated levels of quality.
New York | London | Hong Kong | Singapore | Dubai | Abu Dhabi | Riyadh | Casablanca | Bruxelles | Amsterdam | Roma | Milano | Paris | Lyon
CONFIDENTIAL © 2014 Sia Partners
Website : http://www.sia-partners.com/us/ | Blog : http://en.finance.sia-partners.com/
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Monthly Newsletter - Insurance in Asia
Issue 1 - October 2014
calendar | Save the date in October
figures | The month digit
3.0%
Is the average penetration rate of insurance in the
emerging Asian markets, whereas this rate reaches
11.5% in Japan and South Korea (considered as
advanced markets).
18th East Asian Actuarial Conference (EEAC)
October 12-15th
INSURANCE DATA & ANALYTICS ASIA 2014
October 14th, Hong Kong
In 2013, the total Life and Non-life premium amount
across Asias reached 1,086 USDbn, of which 62% was
underwritten in the advanced markets (25% Non-life,
75% Life).
How Can We Develop a Customer-Oriented
Organisation and Deliver a Superior Customer
Experience? (BritCham)
October 21st, Hong Kong
This balance is still slightly different in emerging
markets (61%/39%), pointing to a sustainable growth
in China and South East Asia in the Non-life industry,
correlated to the emergence of a new middle-class.
ASIARISK CONGRESS
October 30th, Hong Kong
Source: www.swiss-re.com
one step further
In your next Sia Partners Monthly - Offshoring in Asia / Reinsurance issues / Brokers in Asia…
Digital - Sia Partners launches its Observatory of Digital Strategies (contact us for more information)
Regulation - Hong Kong IA launched on September 16th a Consultation Paper on a Risk-based Capital Framework
for the Insurance Industry (http://bit.ly/rbcframework)
Our latest blog publications:
 Singapore Regulatory Overview and Update - Second half of 2014 (http://bit.ly/sgregh2)
 Hong Kong Regulatory Overview and Update - Second half of 2014 (http://bit.ly/hkregh2)
Learn more about us
We can partner your projects across business lines…
 Risk management (regulation, actuary…)
 Finance
 Operations (claim management…)
 Distribution
550 consultants
15 offices
Established in 1999
110 M$ revenue
Vincent KASBI
Head of Asia
[email protected]
… from strategy to operations
 Operational strategy
 Business Analysis
 Project Management
 Change management
 IT Strategy & Architecture
Victor PARASCHIV
Senior Manager Insurance
[email protected]
Charlotte MERY
Sia Partners Monthly editor
[email protected]
©Sia Partners 2014, All rights reserved
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CONFIDENTIAL © 2014 Sia Partners
Website : http://www.sia-partners.com/us/ | Blog : http://en.finance.sia-partners.com/
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