Digital processes ‘to lower insurance premiums’
MUANG THAI Life Assurance believes that premiums for insurance policies processed by digital platforms will go down dramatically in the not-so-distant future.
The trends of competition and disruption will affect the pricing of insurance policies, which even MTL cannot avoid, Sara Lamsam, president and chief executive officer, said yesterday.
Insurance products offered via cyber-channels should be cheaper than those offered by traditional channels.
However, premiums might not reflect the cost savings yet because the company has to keep investing in technology to digitise the process completely to serve customer segmentation.
MTL has to invest Bt200 million to Bt300 million a year on technology upgrades, so premiums in the beginning stage cannot be cut, but the trend of better health of consumers should allow premiums to be adjusted in line with statistics.
Currently, premiums charged for basic insurance plans offered online are not that different from those distributed via traditional channels.
There’s not much premium income from the online channel because of the small ticket size in terms of the sum insured, but the trend of the online channel is growing.
The company hopes that when regulations allow insurance firms to offer sophisticated policies, the ticket size of policies via the online channel will be bigger.
In the past few years, MTL has allocated Bt1 billion to revamp its core system.
The budget for technology development is part of MTL’s core system.
However, investment in technology is a continuing project.
The digital trend has triggered the change of the insurance market and Generation Y has dominated the growth of business. At MTL, about 70 per cent of employees are Gen Y.
In the view of MTL, the insurance industry is in the most exciting stage and it is the time for outside-in perception, not inside-out as before.
Mobile applications
MTL believes it has to develop mobile applications that fit modern lifestyles and implement financial needs analysis (FNA) to help clients learn what are the right insurance policies for their lifestyle.
The FNA process is digitised from e-application to underwriting and payment.
About 4,000 agents use FNA and in the future, bancassurance and brokers will adopt FNA to approach clients.
“In the past, we had to motivate consumers to buy insurance policies but now consumers understand insurance better,” Sara said.
The meaning of digital in MTL’s view is not a tool but is a trend.
The company has attempted to digitise the process to tap the whole customer journey from offering information on insurance programmes, the buying process, to after service and beyond service.
“Beyond service is important because we want the customer to be engaged with us in order to increase renewals,” he said.
