The digital transformation is revamping the insurance industry. After spending a year digitising its day-to-day operations like moving customer portfolios online, insurance agencies are starting to explore the use of new technologies to predict customers’ demands and develop new products and processes that will meet their needs.
Internal processes and customer engagement will become highly digitised, and digitalisation will become the insurance industry’s key agenda in the years to come.
creating a centralised data platform for better alignment
Many insurance companies have large and segregated sales teams. These sales teams are grouped based on how they engage with their customers (e.g. digital sales, telesales, face-to-face) and they rarely overlap or collaborate with each other. The company’s reason for creating these different sales teams is to create as many touchpoints with their customers as possible.
However, customers’ data are also disconnected because of this decentralised structure. The same customer that is engaged by the digital sales will also be connected with the telesales team due to different sets of data logs. Because of multiple data logs, customers may receive multiple requests from separate insurance employees for a new product within a very short time, which can result in a negative experience with the insurer. One good example of this is, a customer may receive an email, a text message and a call for the same product in the same week, as the company is not able to provide a single overview of the customer for its internal sales teams.
The idea to resolve this is to build a data lake that will consolidate all customer data collected from various channels. A centralised platform allows employees to view the latest customer data and conversation logs across the different touchpoints. By doing so, all the teams - from underwriting to sales; compliance to marketing - will have more clarity on their customer funnels as well as needs and interactions to help them achieve their financial goals.
The success of this structural reform would rely heavily not only on organisational change but also a significant mindset shift amongst the workforce. While the leadership team would be responsible for driving the change management process and messaging, staff must also adopt an open mind to embrace these changes, and learn how to work in the new environment so that they can reap the benefits of centralised data platforms.
customers want more control over their financial assets
According to a recent release from Life Insurance Association, new policies purchased online grew from 4,662 in Q1 2020 to 88,565 in Q1 this year.
Recognising that an increasing number of customers are using digital platforms to manage their insurance and investment portfolios, many companies are now offering new digital ‘microinsurance’ products that require little to no underwriting. This strategy allows insurance agencies to reach out to more customers from various income groups, many who can now tailor their insurance portfolios to fit their income and financial goals.
For instance, NTUC income launched a subscription-based and customised insurance offering, likening it to Netflix’s subscription models in which users may pick and choose what they want.
To broaden their offers and expand their customer base, insurance companies are seen to be partnering up with investment and wealth management platforms such as Syfe, Endowus, and Stashaway. For example, Prudential Singapore underwrites Stashaway's fully-digital group term life policy, which is available on the StashAway platform.
These collaborations between traditional insurers and digital platforms can help companies diversify their revenue streams and reach out to more customers. The smart integration of digital technologies also boosts the end-to-end customer experience optimisation. This trend will continue in the future as customers become more digital-savvy.
risk-based capital framework charts new path for investment-linked policies
As RBC 2 (risk-based capital framework) kicks in during a time when central banks are cutting interest rates to support economies and enhance protection for par policyholders, insurers are pressured to set aside more capital to match guaranteed insurance liabilities, limiting their ability to invest in higher-yielding assets.
In the face of falling bond yields, insurers are shifting their product design by lowering the guaranteed benefits for their par policies. However, it reduces the rate of return for customers, who are motivated by alternative financial planning solutions, particularly in financial protection and retirement planning.
This change will encourage insurers to create new financial products to maintain customer engagement. We're already seeing a shift away from endowment-style policies and towards investment-linked policies (ILPs). In ILPs, the customers are responsible for the entire investment risk as there are no guaranteed returns since they are based on the sub-fund’s performance.
what are the 3 most in-demand insurance jobs in 2021?
In 2021, we noticed more active candidates, in part due to the improving economy and employment market. The increase in recruitment activity and the high vaccination rate in Singapore have boosted workers’ confidence to begin seeking new job prospects.
Here are some of the most in-demand jobs in the insurance industry.
1. sales and product development
Hiring for positions such as product development, partnership managers, business development managers and insurance specialists has increased.
A Credit Suisse report revealed that the number of millionaires in Singapore will rise by 61.9%, reaching almost 437,000 by 2025. In response, the financial institutions are launching a wide range of digital products to leverage the growing affluent market and build their high net worth (HNW) customer base.
As customers’ interests in traditional saving plans start to dwindle, we observe more and more customers are taking interest in ILPs to grow their wealth. Insurers are responding quickly through new products, digital platforms and partnerships to cater to evolving customer behaviours and investment appetites.
We expect to see an increasing talent demand for professionals in HNW portfolio management and digital investments. Professionals who have experience in forging and commercialising partnerships will have an added advantage.
2. actuarial (assistant to manager level)
We’ve observed a steady talent demand in actuarial, particularly in the middle management levels of valuation, risk management and pricing.
As part of its digital transformation journey, companies are investing in developing in-house skills capabilities to develop and drive data-driven projects. Re-insurers and insurtechs are ramping up their hiring of digital-savvy actuaries to lead new initiatives and better manage risk for their clients’ companies. Professionals who have pricing, risk and data analytics expertise are highly sought-after by insurtechs.
3. risk & compliance
We saw strong hiring activities for risk and compliance professionals within the insurance industry in 2021. Some of the most common hiring requirements we’ve received are for experienced professionals equipped with skills in data protection, database management, technology risk management and regulatory compliance.
These emerging skill demands stem from tightening regulatory requirements, as local authorities increasingly clamp down on firms’ data governance and protection capabilities to mitigate risks in new business initiatives.
Talent who demonstrate in-depth knowledge about the evolving regulatory frameworks and who can effectively apply them to mitigate risks across business units are highly sought-after. Employers are also looking for risk & compliance professionals experienced in implementing data privacy and database management controls that meet the new regulatory requirements in a highly digitised environment.
The increasing use of digital platforms also gives rise to threats on mobile and web applications. To reduce and control their risk exposure, insurance companies are actively hiring technology risk professionals with tech engineering experience to address these new threats.
candidates want to know what they can’t find on the job advertisements
Just as employers’ expectations of job seekers have evolved and increased over the past years, so have the candidates’. Despite the pandemic, expectations from both employers and job seekers remain high.
Many candidates whom we’ve met are interested in understanding how insurance agencies are investing in technology and how the firms' digital transformation strategies are being implemented. For example, many candidates want to know the types of IT equipment and software that companies are using to perform their tasks, or how they are leveraging technology to drive digital initiatives and stay competitive in the long run.
Besides the firm’s technology agenda, candidates are also curious about the organisational culture, team synergy as well as the level of on-the-job support they will receive in a remote or hybrid work environment. Knowing how team members work and communicate with one another will help the candidate determine if the company’s culture is a good fit for their personality and working styles.
despite more job seekers, good candidates are hard to come by
Many employers are looking for the “perfect” candidate - talent who exceeds their expectations and can start producing results as soon as they start working. However, these candidates hold high expectations of their employers as well.
Employers who are looking to fill roles urgently need to be more flexible with their candidate requirements and widen their search to shortlist candidates who display strong learning and growth potential. Many job seekers value the opportunity to learn and develop their professional competencies, and they are also more likely to be loyal to employers who offer them the chance to grow.
Companies that are pushing their digital transformation agenda forward can also benefit from hiring candidates who are eager to learn. These job seekers are more likely to embrace change and be enthusiastic about working on new initiatives that can challenge them beyond their day-to-day duties.
As the industry evolves rapidly in this digital era and grows in parallel with the strong economic recovery, high performing talent looking to move have similarly raised their salary expectations. This is especially so after many insurance professionals have had their salary and bonus frozen in 2020 as their companies tried to mitigate costs and financial risks at the start of the pandemic.
Job seekers equipped with the abovementioned in-demand skills have raised their salary expectations from 10% in 2020 to 20% in 2021 when switching employers.
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