New Ideas, Inspirations Highlight Synthesis of AIC Congress
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)