Insurers in the
Asia-Pacific region have the benefit of a market with significant
growth potential but must also cope with changing distribution
models and the related need to adapt administrative systems. Toby
Rotstein of Bravura Solutions discussed with LII how
technology provides answers to the challenges.
Home to many of the
world’s fastest-growing life insurance markets, the Asia-Pacific
region presents insurers with significant growth opportunities. But
the region also poses a number of major challenges to insurers, not
the least of these being to enhance product distribution
models.
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Highlighting this,
professional services firm Deloitte Touche Tohmastu noted in a
recent study of alternative distribution models in Asia-Pacific:
“Forward thinking insurers are leveraging distribution channels as
one way to capture the opportunities that exist in the fast-growing
Asia-Pacific markets.”
Consultancy Celent
highlighted in a recent research study, Distribution Trends in
the Asian Insurance Market, that insurers in the region are
moving away from agency based distribution towards a more diverse
model that encompasses other channels such as banks and direct
sales.
Celent pointed out that, in
some markets, premium income for new life insurance business
generated through banks now exceeds that of the traditional
insurance model of selling through individual agents.
To support a diverse range of
distribution channels and remain competitive, Celent stressed that
insurers require increased flexibility in the technology they
use.
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By GlobalData
Technology
vital
Echoing Celent, Toby
Rotstein, head of sales in Asia-Pacific for Australian vendor
Bravura Solutions, told LII it is vital for insurers to
turn to technology for solutions.
As an example of what modern
technology can achieve, Rotstein explained that Bravura’s
internet-based Sonata software solution enables an insurer’s bank
partners to key in new business applications directly from branches
into the insurer’s processing system.
Rotstein stressed another
important driver of efficiency is automated
underwriting.
“Advances in straight-through
processing open the door to heightened levels of operational cost
savings and benefits by streamlining and automatically underwriting
applications within minutes,” said Rotstein.
What can be achieved, he
continued, is illustrated by the recent experience of one of
Bravura’s clients, a major bancassurance life provider in Thailand.
Half of new applications are now being accepted and issued without
manual underwriter intervention, said Rotstein.
“Technologically advanced web
enablement may also provide support for a direct sales channel,”
said Rotstein.
“Prospective customers can go
online and either get a quote, or submit an application directly
into the policy administration system. If the application fulfils
the automatic underwriting rules, then within minutes the applicant
will be advised their application has been approved. Otherwise the
applicant will be advised their application is pending underwriting
review.”
Rotstein added that web-based
distribution is becoming increasingly important as members of the
emerging Generation Y market (consumers 30 years old or younger)
expect to be able to use online tools for purchasing items and
services.
“With the evolution of local
and national wireless broadband networks, automated underwriting
technology can be further harnessed for agents,” said
Rotstein.
“For example, an agent could
visit a client, do an online needs analysis and electronic
application capture and provide an underwriting decision in a
matter of minutes, all on a iPad.”
Adaptability
Adaptability of software
applications is also of key importance, emphasised
Rotstein.
“In terms of adaptability in
a software application, two areas of business require flexibility
with respect to supporting multi-channel distribution,” he
said.
The first area is flexibility
to develop and rapidly launch new products. Rotstein explained that
to differentiate themselves from competitors, insurers’ bank
partners are continually looking for additional customised life
insurance products for their customer base, while financial
advisers are looking for new, innovative investment life insurance
products for their clients to invest in.
“Modern, rules-based and
table-driven life insurance applications with product cloning
capabilities provide this flexibility. Using these tools, new
products are simply configured, not coded, for rapid launch,” said
Rotstein.
He added: “We are now seeing
examples of this. A large Asian life insurance provider recently
launched a new bancassurance product for its primary bank partner
in under six weeks, contrasting markedly with the typical six
months to market seen previously.”
Rotstein said the second area
relating to flexibility is an ability to effect changing workflow
processes, in line with the needs of each of the different
distribution channels.
“Currently most life
insurance applications require changes to their software code in
order to change a work process,” said Rotstein.
But modern technology is
changing this, he stressed.
“Modern, more advanced
software systems now encompass built in workflow management that
effects changes to workflow processes simply and quickly by merely
changing a table or a workflow diagram.”
Overall, stressed Rotstein, insurers stand to reap
considerable benefits if they use technology to meet the challenge
of evolving distribution channels and improving processing
efficiency.
