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1
Insurance Technology Landscape: Insurtech vs Infrastructure
Copyright © Tech For Insurance 2020, https://techfori.com
Insurance
Technology
Landscape:
Insurtech VS Infrastructure
Asia & Middle East
Non-Life Edition
2
Insurance Technology Landscape: Insurtech vs Infrastructure
Copyright © Tech For Insurance 2020, https://techfori.com
Our 2020 analysis of the non-life insurance technology landscape offers a detailed framework
to understand and act on current trends. We’ve used interview and survey data with insurance
professionals from over 50 insurance companies in 9 countries across East Asia, Southeast Asia
and the Middle East to present an assessment based on our understanding and research.
In recent years, Asia and the Middle East has
seen the rise of Insurtech – from being
confined to small pilots and vanity projects to
full-blown investment in R&D
& innovation labs, and a top-of-mind topic for
boards and C-level executives.
As the technology landscape and consumer
behaviour continue to transform, insurers face
an unprecedented need to evolve or face
disruption.
Differentiating Insurtech from
Infrastructure
Yet it is important to note that only digital-
ready insurers can ride on the Insurtech wave
– i.e. those that own a digital, plug-and-play
infrastructure to integrate Insurtech within
their systems, processes and products.
In exhibit 1, we showcase a framework of Insurtech
vs Infrastructure, and the relationship between them.
Infrastructure refers to the set of systems and
processes that make up the insurer’s value chain.
Today, insurers in Asia and Middle East mostly own a
legacy core system, implemented over 10 or even 20
years ago. These legacy systems were built with an
inflexible data and process architecture, that made it
difficult to interface with external platforms to
exchange data or facilitate real-time transactions.
Chinese Incumbents have been known to migrate to
Digital Native core systems –see BCG/OliverWyman.
For East & Southeast Asia, a popular approach used
by most insurers is to integrate with a Middleware
platform, that will then interface with external
platforms. This reduces the need to invest in a risky
and costly move to a new core system. To view a case
study on this, see exhibit 5.
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Insurance Technology Landscape: Insurtech vs Infrastructure
Copyright © Tech For Insurance 2020, https://techfori.com
Insurtech refers to new tech-driven models of
insurance, be it in new ways to engage with
customers, new products and underwriting
methods, or new ways to manage and process
claims.
Insurtech is often developed by 1. specialized
startups, 2. software houses who frequently
work with 3. business consultants to market
their products, and occasionally 4. insurers
with an in-house innovation unit.
For most insurers, the more common method
is still to work directly with Insurtech startups
– in fact, more than 70% of them. See exhibit 2.
Infrastructure as a Prerequisite
for Insurtech to succeed
For many boards and C-level executives, their
knee-jerk response to the rise of Insurtech is
to plan their immediate implementation,
regardless of the state of maturity of the
current infrastructure.
We believe this may lead to an ineffective
solution at best, and erroneous at worst.
Take the example of Fraud Detection.
Shift Technology, a leading AI Fraud solutions
provider from Europe, has engaged with
multiple insurers in Southeast Asia for pilot
trials. Claims users from one insurer reveal
that the dataset shared to Shift for machine
learning and model validation was incomplete
and potentially erroneous. This led to an
unreliable fraud model setup for them, and
claims users assessed its insights as inaccurate
and unreliable.
Furthermore, the claims users worked on a
manual, mostly offline claims process. Shift’s
digital portal to view its insights did not sit well
within the process, and claims users eventually
stopped using the portal due to reasons of
‘forgot password’ or ‘too much of a hassle’.
The pilot trial eventually failed, wasting an
opportunity to onboard a game-changing
Insurtech into their operations.
See Exhibit 3 for a general view of reasons
behind the failure of Insurtech pilots.
0% 20% 40% 60% 80%
Local Inhouse IT
Global Inhouse IT
Consulting Firms
General IT Firms
Insurtech Firms
Qn: Who provides the Insurtech Tools used in your company?
Exhibit 2: Insurers reveal the source(s) of
Insurtech tools used in their company
No intention to proceed in first place (5%)
Users said it was hard to use
(16%)
Technical reasons -lack of data,
integration fail(19%)
Too expensive; did not prove ROI
(28%)
Users said it did not work
(32%)
Qn: What were the reasons why the Insurtech pilot failed?
Exhibit 3: Insurers who piloted and
then discontinued Insurtech solutions
share their reasons
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Insurance Technology Landscape: Insurtech vs Infrastructure
Copyright © Tech For Insurance 2020, https://techfori.com
The Role of Infrastructure
We identify three key roles that an insurer’s
infrastructure must fulfil, to effectively
incorporate Insurtech solutions into its
value chain.
1. Enable Digital Processes
When an insurer still runs on manual, offline
processes, it limits the room for Insurtech to
value-add and transform its operations.
For solutions that augment human intelligence
such as A.I. and RPA, the key benefit is to
automate decisions and workflows based on its
insights. If these decisions and workflows are
conducted offline, then it can only serve as
advice for users – limiting its potential to
automate operations, reduce turnaround time
and transform customer experience.
For solutions that enable new insurance
products or improved risk underwriting, such as
Telematics, Big Data and Blockchain, these hinge
on the ability to perform real-time underwriting
based on the rating rules and limits configured by
underwriters. Should the underwriting system be
unable to interface directly to these solutions,
then the products cannot be offered on a timely
manner to customers and intermediaries.
2. Act as Single Front-end for Users
Then there is the matter of User Behaviour and
Change Management, an important aspect of any
new technology implementation. When users access
Insurtech tools in an adhoc, haphazard way – logging
in to one webtool, reverting back to manual handling,
and then switching to another tool – this is a recipe
for usage churn and reduced user engagement.
Ideally, Insurtech tools should be embedded
seamlessly within a single digital front-end platform,
with the right tool offered in the right context to the
users. This can then institutionalize the proper use of
insurtech within the organization. See exhibit 5.
3. Collecting Data
AI and analytics solutions often require the insurer to
have its own Data Pipeline, which will continuously
feed structured data to churn out insights – for
example, aerial drone data for property assessment,
or car photos for repair estimating. See exhibit 4.
Historical data is also necessary to tailor the AI
solution to each insurer’s business and risk portfolio.
In the case of AI Fraud Detection, detailed historical
claims data is crucial during the model training
process to identify suspicious patterns or risk
characteristics unique to the insurer, and then during
the model validation process by running it against a
test set of past claims (with outcomes masked). Exhibit 4: AI is the new Engine, and
Data is the new Oil. Excerpt from
“Big Data in Insurance” webinar by
Insurtech speaker Sebastian Tan
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Insurance Technology Landscape: Insurtech vs Infrastructure
Copyright © Tech For Insurance 2020, https://techfori.com
Exhibit 5: A middleware platform for Motor claims, acting as insurer’s digital architecture.
Source: Merimen, an insurance SaaS provider serving 150 insurers in Asia & Middle East.
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Insurance Technology Landscape: Insurtech vs Infrastructure
Copyright © Tech For Insurance 2020, https://techfori.com
Current Insurtech & Infrastructure
Landscape in Asia & Middle East
We have identified how Infrastructure
technology forms the foundation for Insurtech to
prosper. It is then no wonder that different
countries and regions have had differing levels of
Insurtech activity – corresponding to their level
of digitization and infrastructure maturity.
See exhibit 7.
Claims Management remains a core focus area
for both Insurtech and Infrastructure to serve.
In exhibit 8, we compiled over 40 companies and
startups currently serving insurers in Asia and
the Middle East across the claims management
value chain.
Key use cases for Claims Insurtech comprise:
• Transforming the customer experience
especially at point of notifying claim
• Automated triage, screening and offer
computation for every claim
• Remote assessment and diagnosis of
claimant loss or damages
Exhibit 6: Insurers can promise Fast Turnaround Time to customers by
automating approval decisions. In Malaysia, Etiqa Insurance and
Sompo Insurance use Merimen for their Motor claims Middleware.
Source: Insurer websites
0 2 4 6 8 10
Saudi Arabia
Vietnam
UAE
Thailand
Singapore
Malaysia
Japan
China (incl HK)
Qn: On a scale of 1-10, how would you rate the Insurtech
activity in your country?
Exhibit 7: Top 4 and Bottom 4 countries in
terms of perceived Insurtech activity.
East Asia sees the highest activity, followed
by developed nations in Southeast Asia.
Meanwhile, GCC countries and developing
nations in Southeast Asia rank bottom.
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Insurance Technology Landscape: Insurtech vs Infrastructure
Copyright © Tech For Insurance 2020, https://techfori.com
Exhibit 8: Technology Landscape across the Claims Management value chain
Explanation:
Notify Claim refers to the
process where customer
notifies insurer of its loss,
and is guided to submits
the required information
to file a claim.
Triage Risk refers to the
process where insurer
assesses if a claim is
valid and if it is liable to
pay. This may involve a
survey of the damages,
a checklist, and so on.
Cost Control refers to
the process where
insurer determines the
right payout to make up
for the customer’s loss.
Repairers for a damaged
car or property may try
to inflate the claim.
Recovery refers to the
process where insurer
is not fully liable for the
payout, and will claim
back some proportion
from the liable third-
party, usually another
insurer.
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Insurance Technology Landscape: Insurtech vs Infrastructure
Copyright © Tech For Insurance 2020, https://techfori.com
Exhibit 9
Showcase of Insurtech & Infrastructure in Claims Management
Source: Press releases from insurers and solution providers
Insurtech: Video Interaction
Leading Japanese insurer MSIG pioneers Video
Interaction tools in Singapore to perform real-time
assessment of motor claims in minutes, reducing
turnaround time by 80%.
MSIG improved its survey efficiency and achieved a
significant cost saving of 88%.
Infrastructure: Digital Processing
Leading global insurer AIG launched a digital claims
management platform in Thailand to digitize and
automate the end-to-end claims value chain, first for
Motor and then Property and Personal Accident.
More than 95% of garage quotation and repair details
can be reviewed and approved within 24 hours.
Insurtech: A.I. Fraud Detection
Top life insurer Prudential pioneers an A.I. solution that
assesses hospitalization claims in seconds.
The system’s intelligent decision-making capabilities
shorten claims assessment time from seven days down to
mere seconds.
Infrastructure: Mobile App
Top Singapore insurer NTUC Income offers a convenient
mobile app to report claims digitally.
The app allows users to file a claim and provides 24/7
access to the insurer’s accident response team.
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Insurance Technology Landscape: Insurtech vs Infrastructure
Copyright © Tech For Insurance 2020, https://techfori.com
Conclusions
While insurers in Asia and the Middle East face the
pressure to disrupt or be disrupted, the reality is
that some have yet to lay a digital infrastructure as
the foundation for innovation and Insurtech.
We note that there are varying levels of digitization,
both across countries and lines of business. For
Motor insurance, commonly the largest portfolio by
GWP, insurers in Singapore, Malaysia and
Indonesia have reached a highly digitized state of
processes where the end-to-end value chain is
digitized. Meanwhile in the GCC, countries like
Saudi Arabia and UAE are still operating largely
manual and offline processes both for policy
underwriting and claims processing.
The stark reality is that industry leaders who have
invested in a strong base of digital processes and
systems are now well-positioned to grasp the
exciting opportunities created by the rise of new
technologies and the sea change in customer trends.
Industry laggards may yet succeed in catching up.
The rising popularity of Middleware platforms has
enabled insurers with legacy platforms to continue
product innovation and interface with new
Insurtech platforms.
Migrating to a modern core system has also become
a more affordable and lower-risk option , as digital
native core systems offer lower cost cloud-based
solutions and flexible Software-as-a-Service pricing.
Some, like ZA Technology, offer a risk-sharing
model where their implementation fees are reduced
in exchange for a share of the profits.
With the steadily maturing landscape of
technologies that enable new innovative products
and distribution channels as well as more rigorous
and efficient claims management tools, insurers
now face clear paths to innovation and growth.
The question remaining, then, is for which path to
take, and when.
Related Reports
▪ Insurtech Directory 2020
– Asia Claims Management edition
– Middle East Claims Management
edition
▪ Core System Transformation:
From Legacy to Future-ready
▪ Motor Claims Automation:
Best Practices playbook
▪ Top 10 Middleware Platforms
For more info, contact hello@techfori.com
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Insurance Technology Landscape: Insurtech vs Infrastructure
Copyright © Tech For Insurance 2020, https://techfori.com
This report analyzes technology trends in the Asian non-life insurance industry.
We’ve used firsthand interview and survey data with insurance professionals from
over 50 insurance companies in 9 countries across East Asia, Southeast Asia and
the Middle East to examine current trends and present an assessment based on
our understanding and research. This report is meant to provide an objective
perspective on current trends and key areas of opportunity; it does not
recommend or endorse any specific company, solution or course of action.
About
Tech for Insurance
TFI is Asia’s leading Insurance Tech
Consultancy and Think Tank.
The Insurance industry is being disrupted by
fast-changing consumer trends and the 4G
technology revolution. Digital-ready insurers
tap on A.I., RPA and other tools to automate
operations, control claim costs and deliver
winning products and customer engagement.
Traditional insurers must transform their DNA
and operations before being overtaken by
digital leaders, or disrupted by Insurtech
startups. It's a matter of WHEN, not IF - and
the best time to start is now.
Partner us to join the race. We're here to help
you win.
How TFI supports clients
• Consulting on Digital Transformation and
Insurtech Innovation projects
(Problem discovery, Project design,
Vendor sourcing & selection)
• Market research and Futurescape studies
for Insurance and Insurtech
• Advisory and Board engagement on Tech
strategy
Recent Consulting Topics
▪ COVID19: the Impact on Claims and
How Technology can Help
▪ Big Data in Insurance: Unlocking the
Potential of Claims Data for Risk
Management
▪ Transforming Customer Engagement
to deliver winning customer journeys
▪ Core System Transformation projects
▪ Motor Claims Automation projects
For more info, contact hello@techfori.com
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