New Ideas, In­spi­ra­tions High­light Syn­the­sis of AIC Congress

Insurance - - CONTENTS - Text Carlo Diaz

The ASEAN in­sur­ance mar­ket was the hot topic at the Syn­the­sis of AIC Congress held 4 to 6 De­cem­ber 2013 at the Vin­pearl Ho­tel, Danang, Viet­nam. The 3 Rs of in­sur­ance – reg­u­la­tion, risk man­age­ment and rat­ings – were con­cepts pre­sented early and dis­cussed as build­ing blocks for growth in the ASEAN trans­for­ma­tion. These Rs are vi­tal to in­sur­ers be­cause risk sources and com­plex­i­ties have in­creased over time. The ar­eas in­volved in­clude tra­di­tional risk man­age­ment, as­set li­a­bil­ity man­age­ment, cash flow test­ing, dy­namic fi­nan­cial anal­y­sis and en­ter­prise risk and cap­i­tal man­age­ment. In or­der to drive the fi­nal growth in the ASEAN mar­ket, in­sur­ers must man­age, mon­i­tor and mit­i­gate the bal­ance of their risk profiles and risk man­age­ment dis­ci­plines, as these have a di­rect im­pact on fi­nan­cial rat­ings, which are ul­ti­mately em­bed­ded in reg­u­la­tion. Early dis­cus­sions also fo­cused on the ASEAN in­sur­ance econ­omy, wherein the first panel il­lus­trated that al­though the growth in the ASEAN re­gion has been ro­bust, re­gional busi­ness rep­re­sents only a small frac­tion of the global and western in­sur­ance mar­kets. There­fore, there is still so much po­ten­tial to be tapped in the ASEAN re­gion. One of the pan­elists pre­sented a new per­spec­tive of in­te­grat­ing sci­ence in the way in­sur­ance pro­fes­sion­als con­duct in­sur­ance busi­ness for ev­i­dence-based and smarter busi­ness de­ci­sions. Some ex­am­ples were shared on the use of in­ter­nal and ex­ter­nal data an­a­lyt­ics be­ing utilised to man­age and mit­i­gate

risks to in­crease ef­fi­ciency and re­duce risks. It was pointed out that in­sur­ance also must go back to the ba­sics – op­er­ate ef­fi­ciently, price ad­e­quately, pay claims promptly – so that the in­dus­try can rebuild con­sumer trust and drive for­ward the de­mand for faster growth. The ASEAN mar­ket is like­wise evolv­ing from an agri-based mar­ket to a vi­brant emerg­ing cap­i­tal mar­ket. To boost in­sur­ance pen­e­tra­tion and growth, there are no quick fixes. The point was made that the in­dus­try needs to get in­sur­ance ba­sics right again, and deliver the in­sur­ance val­ues cor­rectly and ef­fi­ciently at the right price. There is also a need for in­sur­ers to lis­ten to cus­tomer bar­ri­ers and pain points, and re­duce them. They must also work to bridge the com­mu­ni­ca­tion gaps with con­sumers, and em­pha­sise in­sur­ance aware­ness and ed­u­ca­tion. Con­fer­ence at­ten­dees also dis­cussed the fact that mo­bi­las­sur­ance is also gain­ing strong pop­u­lar­ity in its ap­pli­ca­tion as an ex­cit­ing and vi­able dis­tri­bu­tion plat­form for in­sur­ance; thus, the op­por­tu­ni­ties for ASEANs are abun­dant to en­hance out­reach, which other­wise, tra­di­tional chan­nels are un­able to tap into this. An­other in­no­va­tive dis­tri­bu­tion chan­nel high­lighted was the use of so­cial me­dia as an in­for­ma­tion and feed­back plat­form as a pow­er­ful tool to drive con­sumer en­dorse­ments of in­sur­ance prod­ucts.

A mul­ti­chan­nel ap­proach to grow busi­ness seg­ments highly en­cour­aged by pan­elists, as well as cost ef­fi­ciency over var­i­ous dis­tri­bu­tion plat­forms. It was pointed out that au­to­mated un­der­writ­ing us­ing so­phis­ti­cated pric­ing en­gines and pre­dic­tive un­der­writ­ing would be a good tool to drive on­line chan­nels. In pur­su­ing in­no­va­tive dis­tri­bu­tion strate­gies, one of the speak­ers shared his con­cept of of­fen­sive and de­fen­sive strate­gies. He ex­plained how of­fen­sive strate­gies are those that drive in­no­va­tion while de­fen­sive strate­gies are those that sus­tain and en­able in­no­va­tions. Through stan­dard­i­s­a­tion of strate­gies, in­sur­ers may ben­e­fit from ac­cu­rate, con­sis­tent, trans­par­ent and ac­ces­si­ble data that can be utilised as a tool to­wards con­sis­tency in what in­sur­ers do. The de­vel­op­ment of an en­ter­prise ar­chi­tec­ture for IT sup­port should be driven by busi­ness de­mand so that there is a co­her­ent ap­proach in han­dling busi­ness waves and op­por­tu­ni­ties. In ad­di­tion, prac­ti­cal in­sights were pro­vided on prod­uct in­no­va­tion – such as ex­plor­ing pro­tec­tion gaps and trans­lat­ing con­sumer de­mands in prod­uct de­signs. Prod­uct de­vel­op­ment and in­no­va­tion should be based es­sen­tially on con­sumer needs. Cus­tomer com­pre­hen­sion of our prod­uct is key, through fair, rea­son­able and un­der­stand­able prod­uct de­sign and value. Some ex­am­ples were pre­sented on Mi­croin­sur­ance as well as us­age-based in­sur­ance prod­ucts, which have been ear­marked to pro­lif­er­ate in the ASEAN mar­kets very soon. In­dus­try as­so­ci­a­tions may like­wise play a role in de­vel­op­ing guide­lines with which the in­dus­try can move in uni­son, to sim­plify pol­icy forms to make prod­ucts more con­sumer-friendly, as pre­sented by the Gen­eral In­sur­ance As­so­ci­a­tion of Ja­pan. Con­fer­ence pan­elists also made it clear that hav­ing a pool of young and vi­brant in­sur­ance talent could be a use­ful source for in­no­va­tions and growth as pre­sented by the dra­matic case study of Viet­nam's emerg­ing econ­omy. Re­vis­it­ing also the ba­sics of in­sur­ance in serv­ing the so­ci­ety and econ­omy through vol­un­tary and com­pul­sory cov­er­age like­wise was pre­sented as a strat­egy to grow in­sur­ance within the ASEAN mar­ket. And in­sur­ance prod­ucts must be ex­plored that reach un­tapped mar­ket space. The fi­nal ses­sion pre­sented a dis­course on lead­er­ship chal­lenges in trans­form­ing the ASEAN mar­ket – and these are best sum­marised in the ASEAN 2015 Vi­sion of one vi­sion, one iden­tity and one com­mu­nity. Lead­ers shall be faced with po­lit­i­cal, eco­nomic and so­cio-cul­tural chal­lenges to bridge con­nec­tiv­ity within the ASEAN mar­kets and their re­spec­tive sec­to­rial/min­is­te­rial bod­ies. Lead­er­ship the­o­ries were pre­sented, as a men­tal struc­ture for lead­ers to ap­ply the ap­pro­pri­ate lead­er­ship style, depend­ing on the chal­lenge at hand to­wards the ASEAN goal of eco­nomic in­te­gra­tion. Key ar­eas on ASEAN chal­lenges for in­sur­ance lead­ers were like­wise pre­sented, wherein lead­ers must be in­clu­sive, good com­mu­ni­ca­tors, mul­ti­dis­ci­plinary, for­ward-look­ing, and a per­son pos­sess­ing the heart of a com­mon man, ca­pa­ble of see­ing needed con­clu­sions to achieve re­gional ob­jec­tives. All of the ses­sions were very ben­e­fi­cial to ev­ery­one, pro­vid­ing new per­spec­tives to­wards strate­gic growth. The dif­fer­ent views and opin­ions ex­pressed dur­ing the ses­sions sim­ply re­flect the rich di­ver­sity of to­day’s in­dus­try. The real chal­lenge is to ad­dress the com­mon risks, com­mon mar­ket is­sues and ge­o­graphic con­cerns of ASEAN, as the in­dus­try moves to­wards a com­mon ob­jec­tive of eco­nomic pros­per­ity.

Wel­com­ing Speech by The 9th AIC Chair­man, Carlo An­gelo Diaz in Da Nang, Viet­nam

Mr. Carlo re­ceiv­ing cer­tifi­cate for par­tic­i­pat­ing in the 2nd In­take pro­gramme or­ga­nized by ASEAN School of Ad­vanced In­sur­ance Lead­er­ship (SAIL)

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