In Life Insurance in Asia: Sustaining Growth in the Next Decade  Stephen Binder and Joe Ngai foresaw a day when: “Innovations around multi-channel usage will supplement traditional channels whilst leveraging social networks will provide direct online distribution capabilities”.
At the time, this line sounded more like a pipe dream than an insight as “multi-channel usage” was beset by technical barriers such as network instability, siloed data storage within insurers and the “mobile last mile” – a term for the varying bandwidth experienced by mobile devices as they transition between LTE, 3G/4G and Wi-Fi configurations. All these issues stalled the race towards a truly multi-channel and integrated digital insurance experience.
Essentially, in an era when Chinese consumers are constantly bombarded by digital advertising, remarketing and push notifications, personailsed devices that can weave real-time audio/visual and data processing functionality into a unified platform represent the holy grail of an omni-channel experience, that can also revitalise the agency channel.
Smart phones, smart watches and IoT devices could breathe new life into life insurance, the agency channel, and open ancillary monetary streams for life insurers through telemedicine and up stream product features. But is real time analytics the real thing? And how can mobile devices revolutionize the agency channel? The answer is threefold.
The tablet toolkit has already been featured as a case study at The Digital Insurer. Although AIA first pioneered the concept in 2011, it has yet to fulfill its disruptive potential. The hope here is that if tablet toolkits are truly a killer application, then location based offerings will be the catalyst to drive mass adoption.
The premise here is that the ability to weave a web of voice/video and data interactions across an insurer’s entire ecosystem while utilising the data porting features of mobile devices – all centralized around the tablet toolkit – can reduce agency turnover, fuel new product development, and circumvent the paper-based customer journey that agents still rely on.
Again, there are technical barriers that have recently been tamed. Advances in analytics and sensor technology have given rise to an array of health apps that track fitness, cardio health and increasingly chronic disease management.
On the distribution side there is much promise too. Today, Chinese agents rely largely on personal networks to sell life insurance policies that give way to limited career options. Tomorrow, mobile devices, powered by location based signals will optimize the agency force through increased lead generation, streamlining their efforts through tailored product offerings and data driven cross selling, all of which is designed to place the agent at the center of the customer experience.
Ultimately, although much of this echoes the original promise of the tablet toolkit, advancements in health sensors are to the tablet toolkit what touch and gesture recognition software was to the iPhone – a breakthrough capability that can help drive mass adoption.
It’s no secret that life insurers are trying to shift gears from pure underwriter and reimburser to a more active role in preventative healthcare and up stream services. The advantages are obvious: reduced loss ratios, better risk selection and additional revenue streams. However “moving upstream” is easier said than done, and mobile devices are the vessel that insurers are hoping will take them there.
One use case involves leveraging the diagnostic capabilities of smart phones and wearables to provide self-reporting glucose monitors that capture data thanks to wearables. A mobile based consultation for minor conditions such as bronchitis and sinus infections costs Cigna and Oscar just $38, while out patient visits average $85 and $130.
It’s not just cost efficiencies either, smartphones, smartwatches and IoT enabled devices are addressing consumer needs across the spectrum of healthcare:
- Where initial diagnosis occurs:
- The advent of wearables and personalised health apps are enabling push notifications based on changes detected in health metrics, particularly those related to chronic disease management such as blood glucose levels and cardiac data.
- How families seek out healthcare advice for minor ailments:
- Consumers are increasingly turning to their smartphone as the first port of call for health research. Connecting policy holders to real time consultations, checkups and appointment booking functionality through location data.
- How long-term chronic diseases are monitored and managed:
- Advances in smartphone chips and sensor technology is enabling increasingly sophisticated analysis and monitoring of diabetes, cardiac diseases and ongoing ailments including stent monitoring and blood pressure reporting.
- Where pharmaceuticals are purchased:
- Online pharmacies have long been part of a health insurer’s online strategy. However, the dawn of the mobile age has reinvigorated health insurers’ ability to offer relevant and timely pharma products and drugs. This, combined with health insurers’ direct relationships with consumers will not only increase consumer engagement with health insurers, but also establish additional revenue streams for insurers that partner with online pharmacies for fulfillment purposes.
Ultimately, the combination of medical data in the cloud combined with mobile device features represents a new capability for life insurers that are trying to promote themselves as more than just an underwriter. What we are witnessing here is the convergence of insurance with front end medical care – a true win/win for both medical practitioners, insurance companies and consumers.
Although most Chinese life insurers have established new product-development departments, banks still have the access to customers and prefer to focus on price as opposed to the underlying value proposition or protection features of new life insurance products.
Some insurers are pursuing AI driven chatbots as the future of customer service within insurance including the convergence of other fields such as telemedicine. However, it’s important to remember that even the most advanced AI chatbots are designed to assist rather than replace physicians.
Ultimately, no amount of software, AI or data mining can replace the loss of trust that currently exists between China’s consumers and life insurers. Repairing this breach will take more than just innovation labs and digital distribution.
The Chinese life insurance industry stands at a cross roads. Although the macro trends are impressive, the real issues lie just below the surface. Distribution channels are providing volume, but not value. However, opportunities in the form of real-time mobile communications and advances in sensor technologies represent a new dawn for the agency channel and online distribution. Stephen Binder and Joe Ngai first spoke of “agency renewal” through new technologies in 2012, and finally there appears to be a tangible move to forge a direct relationship with customers through technology.