SMART

BUSINESS

INSURANCE


Get started

Our partners

Allianz
Allied world
Chubb
Generali
MSIG
Tokio Marine
Zurich Insurance

Inzsure

Why Inzsure?

Built by business customers for business customers - our objective is to give you direct, transparent access to the best SME solutions using technology.

By simplifying the onboarding process, our patented matching engine means you get the right policies for your company – whilst we reduce commissions to the lowest levels available in the market, guaranteed.

But this isn’t only about the buying process. Inzsure is your digital partner throughout the entire insurance cycle from procurement to claims and renewals. Everything can be managed through the platform and we have an unbeatable claims advocacy solution.

We provide end to end customer support for SME companies in Singapore and will be launching in Malaysia soon.

How it works

step-1
step 1

Create an account

Answer a few simple questions about your business

step-2
step 2

Choose a policy

Evaluate suitable policies from top insurers worldwide

step-3
step 3

End to end support

Procure, manage, claim and renew through your browser or smartphone

Benefits

choice-icon

Choice

When it comes to insurance, who you do business with should always be your choice. With Inzsure, you have access to quality policy options, all the time.

transparency-value-icon

Transparency

What commission you are paying? With Inzsure you check before you buy. Flat percentage rates and no hidden kickbacks. We do no hold your insurance premium payment. The insurer you choose is paid directly from your card or account.

safe-fast-icon

Safe & fast

Using technology to protect your transactions combined with fast execution.

great-value-icon

Great value

Inzsure’s intelligent automation and matching engine not only saves you valuable time, gets you the lowest market rate for the policies you choose, guaranteed.

At Inzsure, the customer is truly in control

LinkedIn

by Inzsure
linkedin

6 things SMEs need to know about insurance Nobody wakes up in the morning and says ‘Yay! I get to buy insurance for my company today’. It’s just not something to look forward to. We are optimistic by nature - entrepreneurs & business people perhaps even more so than average. But there are really important reasons why you shouldn’t #business #education #riskmanagement #cycling keep putting off that buy decision — even though there is clearly no instant gratification. Here is the Link to the full article: https://lnkd.in/f4NB42s ===== At Inzsure, we make commercial insurance easy. Not just at the purchase stage but throughout the life cycle of the policy and beyond. We launched in Singapore earlier this year and will be coming soon in Malaysia too. The platform was created by customers for customers and one of our commitments is to educate on the power of appropriately designed insurance programs for SMEs. Don’t hesitate to check out our website and user-friendly help sections for more details: Inzsure.com #insurance #insurtech #SME #Singapore #Malaysia #Technology #DLT

linkedin.com
linkedin

Robin Lee 李显龙 wowing the audience at the Circle E SIM event for #SME here in #Singapore last week. Our first launch event: Inzsure Pte Ltd bringing affordable simple #insurance solutions for even the smallest business. #tech #business #risk #asia #malaysia #insurtech #sim #eventing #launchevents e Assen Tchorbadjiev Jasmine Rogers Astrid F. Kowlessar Gaurav Rekhi Kerry Washington david piesse Pierre Nanterme Pierre Noel David V. Cabral Michael Garrison Liam Burrell @Theodora Lau Hugh Terry - The Digital Insurer Pascal Bouvier, CFA Jim Marous @Singapore Institute of Management #ipguru #insurancepolicies #insuranceclaims #insurancefraud #insurancesoftware #insurtech #blockchain #DLT #ai

linkedin.com
linkedin

Inzsure.com Inzsure Pte Ltd End to end customer support for #SME companies in #Singapore and #Malaysia. Cleared our first regulatory hurdle, launching soon to provide #insurance from procurement to claims to renewals: entirely online #insurtech #risk Robin Lee 李显龙 Assen Tchorbadjiev Astrid F. KowlessarPierre Noel Kerry Washington David V. Cabral david piesse Gaurav Rekhi Jasmine Rogers Rina Neoh #insurance Steve Tunstall

linkedin.com

Medium

by @TunstallAsc
Photo by mentatdgt from Pexels

6 things SMEs need to know about insurance

10 Mar 2019 03:56:49

Nobody wakes up in the morning and says ‘Yay! I get to buy insurance for my company today’. It’s just not something to look forward to. We are optimistic by nature - entrepreneurs & business people perhaps even more so than average. But there are really important reasons why you shouldn’t keep putting off that buy decision — even though there is clearly no instant gratification.Here are some of the key points to keep in focus:For a small business, a reasonable package covering basic needs is pretty reasonably priced. For around 5 or 10 people the basic needs for property, liability and worker compensation can be covered with a bundled policy that will probably set the company back just a few hundred dollars. But the protection provided is worth hundreds of thousands of dollars when something goes wrong. It can really mean the difference between life and death for the company in certain circumstances — especially if cash flow is tight. For many small business owners that also means life and death for your family’s financial security. Why would anyone take that risk?When you let your colleagues know you are protecting their interests with the right insurance package that makes them feel better about working with you. No matter the type of policy, when the benefits are explained clearly to the team, they can see business leaders taking everyone’s interests seriously. No one wants to work long term for a company where the bosses are only out for themselves.You are just completing that major project for a big client and everyone gets in early the next morning to add the finishing touches before submission. That’s when you discover the building water tank leaked overnight and everyone who left their stuff out has a big problem. Of course, most of your data is on the cloud, so it’s not the end of the world. But a prompt on account payment from your insurer lets you quickly replace key hardware, get temporary premises arranged and still hit that submission deadline. No insurance means that lucrative deal is offset with a significant hit on your balance sheet and perhaps a lost client. Incidents of this type happen more often than you would think. When it does, it pays to be prepared.Whether we like it or not the world is getting more litigious. There is an increasing chance for a small business to get caught in the crosshairs of a legal action. Whether it’s by supplying a food or other item that makes someone ill, or perhaps causing someone to trip and injure themselves when they come into your premises, it’s more likely than ever that the individual involved may start legal proceedings against your company to recover their costs and compensation. The defence and legal costs alone — whether right or wrong — can soon spiral out of all expectation for a small business caught in a dispute of this nature.The requirements vary widely depending on where your company is domiciled and the activities you perform. It’s not just vehicles that must have insurance by law. In many jurisdictions, where an SME hires employees there is an obligation to buy certain insurance types. Workers Compensation Insurance is a good example which is required in many countries by law, especially for lower paid employees. Forget to buy these essentials and you won’t just take a hit on the bottom line, you could face fines, criminal action and jail time — or all of the above.No matter how good the policy the onus remains on the buyer to understand what has been purchased and how it works. There is no point waiting for the agent to come and help in your hour of need. Most insurance salespeople vanish when there is a claim to manage. By nature and expertise, they are usually fair weather friends. Be prepared to have to sort out your own mess in the event of a claim. Remember, it’s really important to act quickly and notify insurers as soon as possible with as much relevant information you can lay your hands on about the event.At Inzsure, we make commercial insurance easy. Not just at the purchase stage but throughout the life cycle of the policy and beyond. We launched in Singapore earlier this year and coming soon in Malaysia. The platform was created by customers for customers and one of our commitments is to educate on the power of appropriately designed insurance programs for SMEs. Don’t hesitate to check out our website and user-friendly help sections for more details: Inzsure.com

www.intelligentinsurer.com

AI and Commercial Insurance — The Future is Here?

20 Jan 2019 05:07:55

A superb infographic was released this week from the clever people at intelligentinsurer.com - Here’s an extract:Having surveyed over 300 commercial insurers it seems clear the industry has reached a tipping point — at least in respect of how they reply to surveys. The overwhelming majority of respondents now firmly believe the wind of technological change (in the form of AI) is coming to one of the quieter backwaters of the insurance sector, commercial.Who is still in denial?As a company that tries to be an agent of change in this sector in Asia for SME insurance (an Insurtech, in the jargon), one of the standout lessons I’ve learned in the last three years building Inzsure.com is that this sector is slow to adopt new ideas. I’m still not quite sure where the headwinds come from but will try and develop some themes in this article.The InsurersAt first glance, and as shown in this survey, it doesn’t seem to be the markets themselves that don't understand the need for change. Whilst it’s true that many insurers are still using antiquated technology throughout the region there has been a move to change. There are still several global players who continue to use AS400 as part of their core underwriting technology — for internal closed systems there hasn’t been a big impetus to move — until now. (Here is an example of an AS400 screen for any Millenials on here who have no idea what I’m referring to: )But the introduction of AI moves the goalposts forever. The secret sauce of underwriting experience is no longer a finished product — irrespective of the product line. Those companies that ignore the fact that not only the goalposts but the entire playing field has shifted, will find themselves increasingly uncompetitive. Coupled with this will be unprecedented commoditization (read transparency?) for many lines in an industry that has arguably long thrived on having ignorant or, at least, poorly informed clients.This message of change seems to have penetrated the boards of most big insurers. The response has been mixed. Some boards seem to believe that if they can throw enough money at some eager young startups, they will be able to take that innovation ‘fairy dust’ and sprinkle it back over Head Office to infect the mothership with creativity and change.In reality, though, most big insurer cultures have been successfully fighting off change infections for a long time — in some cases hundreds of years.But it doesn’t seem to be all lip service. Many companies are feeling the effect of the winds of change on their bottom lines and seem to be genuinely moving the needle in internal conversations. It’s clear from the results of this survey, that rightly or wrongly, most of the industry is now drinking the AI ‘Kool-Aid’.The CustomersAs always with the buyers of complex financial products, customers tend to be a mixed bag of the well informed and active risk managers and, at the other end of the spectrum, busy people who just don’t have time to deal with this stuff in its current, arguably over-complex form. Most customers don’t care about ‘products’, they care about their needs. Traditionally the insurance industry has cared less about customer needs and more about what can be effectively marketed. To some extent, it has also been argued that the industry is resistant to change in customer needs as it can rely on regulators to not only assist in driving the sales funnel but also to move at a slow and measured pace too.The insurance industry already risks becoming increasingly irrelevant in boardrooms across the globe. In Asia, where penetration rates have historically been low anyway, the industry is experiencing good growth. It would be truly disappointing if the benefits of appropriate insurance are undermined by a failure to modernise quickly enough to keep pace with changing customer demands.In the future, commercial customers will begin to understand that leading providers will be able to offer bespoke solutions to their needs using AI delivered solutions. The traditional approach of forcing square product pegs into round client holes will perhaps die off completely.In many cases, customers are already embracing the impact of AI and other aspects of digital transformation in their own core businesses. They understand that they will need to adapt or die. There will be little patience with service providers that attempt to hold back the tide of change.The RegulatorsRegulation is ultimately about ensuring the safety of the customer. As customers needs evolve and change the regulatory process tends to be the backstop against which the laggards rather than the leaders in each sector are measured. Depending on where a company is buying insurance in the world the regulatory framework in place varies considerably. Generally, though, the frameworks have been a force for stability in each country rather than a method for the facilitation of change. But this is also changing.There are numerous cases of regulatory bodies that are now positively encouraging change and improvement in the insurance sector, sometimes taking on this additional mandate for the first time. In several countries, the drive to introduce technology into the insurance process, including AI, is being directly facilitated and accelerated by the actions of the regulator. This is only likely to continue to accelerate as customer demand evolves.The IntermediariesSo finally we turn to the intermediaries. Historically their role has been to educate customers and take them on a journey of selection through the opportunities available to secure the correct choice. In the personal insurance space, this sector has already seen very significant disruption in many jurisdictions with the rise of online aggregation. This has been undoubtedly a mixed blessing. Whilst the customer has plenty of transparency and choice these days — some Google meta-searches easily turn up over twenty thousand results. As a decision maker, buying a policy, this is not very useful. The personal lines customer often just sorts the result by price and will perhaps more often than not, end up with a solution that is less than ideal.Change has been slower to make an impact in the commercial insurance sector. Many producers grew up and learnt their trade in an era where personal relationships were everything and it seems as though many continue to turn a blind eye to the potential benefits of introducing technology to the process. There will likely be a role for a human intermediary in this space for a very long time to come. Many clients have highly complex needs and mapping these to a messy and product focussed insurance sector has been a challenging task requiring bespoke tailoring of one sort or another for a hundred years or more.However, as we see the survey, the insurance markets themselves will be increasingly using AI and similar techniques to bring a more customer focussed approach to their solutions. It seems likely that this will erode many of the services currently provided by human intermediaries, particularly for those products that can be underwritten with structured but limited data points.Whilst the human touch will always be irreplaceable in some relationships, perhaps we are on the verge of seeing embedded customer focussed products coupled with AI-driven chatbots taking away much of the traditional intermediary rice bowl.Customers and regulators are ready. If this survey is truly representative then so are the insurers. There seems to be only one impediment to transparency and true corporate governance in commercial insurance? The intermediary.The demise of the insurance industry intermediary has of course been predicted many times before. Not least in the ‘big bang’ launch of technology and automation in the London markets in the late 1990s. However, to paraphrase Mark Twain, the reports of imminent demise have been greatly exaggerated. Until today the commercial insurance ecosystem has continued mostly unchanged. Will the development of AI be any different? That remains to be seen.

Bottom of the Pyramid — Bangladesh Insurtech potential for providing Insurance to SMEs

27 Dec 2018 08:52:29

It was a great honour this month — and a great way to close the year — for me to be invited by UNCDF to facilitate and present to the great and the good of the Bangladesh insurance sector in Dhaka. We had the top management from the most forward-looking insurers and microinsurers in the country together with the regulator to run a workshop on how insurtech can bring the benefits of insurance to the bottom of the pyramid with a focus on small and medium enterprises (SMEs).Delivering transparent pricing for insurance to SMEs in Singapore and Malaysia is our passion at Inzsure.com As CEO I was delighted to have the chance to explore the possibilities further afield.It’s extraordinary how far Bangladesh has come since I was last there. (I’ve been helping and partly funding potable water projects for some time now). The future for the country is potentially amazing: Demographic fast facts — Population of 160 million with 65% under the age of 23!But the challenges of using existing systems and infrastructure to bring insurance protection to this population are likely insurmountable, using traditional distribution means.The answer must be technology — but it requires the whole eco-system around the sector to upgrade and facilitate change. It can be done and has been done in other countries already. The remainder of this article is a summary of the keynotes and findings which we hope can be a small part of the route map for insurtech change in the country.Speed of Change : Insurtech, Microinsurance and InsuranceThe lines between traditional insurance, insurtech and microinsurance are becoming increasingly blurred. Without doubt, the penetration of insurance through the use of technology and often microinsurance to individuals and businesses at the bottom of the pyramid is accelerating in several different countries.Globally, there seem to be a number of standout jurisdictions. South Africa is very successful with something like 60% of the population now covered, particularly in the Life and Health space. In Asia, the Philippines is another stand out example with 21% of the population covered by microinsurance solutions.Bangladesh has seen very significant growth in recent years with something over 6% of lives covered with microinsurance life solutions. However, and overall, general insurance penetration rates are still anecdotally in the range of 1% across the wider population. So there remains a huge protection gap in the country that needs to be addressed.There is no doubt that successful programs have not been possible without the active support of the entire ecosystem in the jurisdiction concerned. This means that the right regulatory frameworks are required, coupled with creative solutions available from both incumbents and new players. There is some traditional scepticism amongst consumers regarding insurance and products — and particularly with respect to intermediaries and the lack of transparency in large parts of the industry. In order to overcome these preconceptions, extra effort is required. In addition, incumbents must be willing to invest in new systems and technologies before their existing distribution channels become too expensive.Insurtech is likely the next big step for the industry and a way to improve penetration rates further. With mobile phone ownership at 74%, Bangladesh is well poised for a rapid expansion of the insurance sector through the use of technology. But it is not only about access, there is also a real need for education of buyers, financial facilitation to improve the buying experience online and providing quality service at the point of sale — whether facilitated by technology or otherwise. The industry itself has a major gap in professional training and development.Policy Makers and RegulatorsThe fundamental underpinning to controlled industries such as insurance is always driven by the approach and attitude of the regulatory authorities.
Whilst the top regulatory consideration will always be the protection of consumers — whether personal, SME or corporate entities — in recent years many regulators have taken a much wider remit to drive improvement in the local jurisdiction.Historically, rigid approaches, such as tariff-based systems, have been expected to provide to customers with strong protection from unscrupulous sales tactics. However, as individual markets mature, these very structures can become a serious drag on innovation essentially preventing penetration of insurance solutions into the broader community. Clearly, in Bangladesh, where microinsurance remains in its infancy — but is showing huge potential, the regulator has an opportunity to encourage and perhaps even facilitate an acceleration of insurance penetration, particularly to key targets at the bottom of the pyramid.In the Philippines where great strides have been made in providing coverage for the disadvantaged, overcoming mistrust in incumbents seems to have been a key factor. A Business Insurance Asia article of 23rd May 2018 provides data on the rise of mutual microinsurance in new forms: Cooperative Insurance Societies (CIS), & Microinsurance Mutual Benefit Associations (Mi-MBAs) which are not-for-profit organisations with low-income individuals as members. As noted in the article:“Mutual insurance accounts for 77% of the microinsurance market. Of that figure, Mi-MBAs comprise around 51% and CISs comprise around 26%. About 53% of the … market remains untapped and regulators continue to encourage the entry of new players. The market is estimated to expand to 73.3 million Filipinos by 2020.”In other jurisdictions in Asia, such as Singapore and Malaysia, the regulator has taken a highly participatory role in encouraging new technology — generically known as ‘insurtech’. This has primarily been done by the provision of safe areas or ‘sandboxes’ for experimentation. The sandbox approach allows for new and interesting startups to enter regulated industries such as insurance without the heavy burdens of full regulation. Of course, if the business model proves successful, the fledgeling company must comply fully with industry regulation as it graduates from the sandbox and fully enters the market. The Monetary Authority of Singapore has gone even further building an entire ecosystem to encourage innovation in Financial Services with tens of thousands of attendees at it’s showcase week long Fintech Festival each year for the last three years.The Insurance Industry — Insurance and MicroInsuranceWith penetration rates estimated at around 1% in Bangladesh, it is clear that existing solutions and in particular distribution systems have failed to address the majority of the countries insurance needs. At the same time, the insurance industry in Bangladesh is experiencing strong growth. Within individual companies, busy with day to day growth plans, it may be difficult to appreciate that there is much more opportunity yet to be tapped. Whilst the industry is relatively fragmented with 78 private insurance companies, perhaps there will be unlikely to be much market-driven consolidation and consequent economies of scale, in the short term.However, incumbents need to recognise that the target demographics in Bangladesh are changing rapidly. With the majority of the population in the tech-savvy, younger generation, the historical business models of face to face sales are unlikely to continue being cost-effective in the future. There will be inevitably a switch to technology-driven ecosystems in the near term. Incumbents need to keep their focus and relevance by leading this charge is possible. Otherwise, it is quite likely that current and new microinsurance entrants will come in and sweep up the market segments that are currently underserved by their solutions.ConclusionsClearly, the Bangladesh market is on the cusp of a major transition, not only in insurance but broadly across the business community. There is a huge opportunity in improving access of both consumers and businesses to the benefits of insurance. However, there is a need for policy makers, regulators and the industry to work together to facilitate technology, ecosystem and education improvements so that these benefits can be realised in a structured manner in the best timescale.

Pixabay.com

Has the successful Asian CEO built a resilient, sustainable legacy — Or a house of cards?

06 Sep 2018 06:06:58

‘Why Asia, Why Now?’The business environment for the CEO in Asia has never been better than over the last fifteen years. The Asian CEO who hasn’t provided a substantial return on shareholder investment during this time must have been pretty unlucky, pretty incompetent, or both. The Asian CEO that doesn’t keep asking “Why Asia, Why Now?” probably won’t keep their job for much longer.Why Not? Six reasons:1. Internal powerhouses: Never in human history on the planet have so many people moved from low income to medium or high-income brackets in such a short space of time as in Asia in the last fifteen years. It will never happen again like this, in these numbers, anywhere, ever. All these fellow Asians need fridges, cars, holidays, condos — the list is as endless as the business opportunities.2. External money trees: Investors and companies from North America and Europe have never spent so much time and money looking for partners to help them ‘make it big in Asia’ as in the last fifteen years. As Asia continues to move from emerging to ‘emerged’ the focus from the West will sooner or later switch to Africa and South America.3. Economic blue skies: Never has the Asia region had such a prolonged period of benign economic factors. Since the Asian Financial Crisis of 1997 / 1998 Asian economies have shrugged off every new trauma relatively unscathed. Dotcom bubble — No impact. 9/11 — No impact, Global Financial Crisis — Not only no impact but conversely the best buying opportunity ever. Asian CEOs looking to go global could never have imagined in their wildest dreams this chance to snap up so many global brands at rock bottom prices.4. Limited impact from Natural Catastrophes. There have of course been significant events over this period and on a personal level they have been terrible tragedies. The Indonesia earthquake and tsunami; the Japan earthquake, tsunami and consequential nuclear issues; the Thai floods. All of these caused deeply regrettable loss of life but from the perspective of the Asia wide economic engine, the impact was immaterial. Earthquakes, tsunami and flooding are part and parcel of the risk of doing business in Asia. Every Asian CEO has this factored in already.5. No Pandemics Spread of disease has had virtually no unpredictable impact over the fifteen-year period. SARS (Severe Acute Respiratory Virus) was very disturbing but in reality, only lasted about six weeks. Concerns over repeated bird flu and swine flu outbreaks have come to nothing to date. The likes of MERS, Ebola and Zika whilst highly destructive to economic value in some countries of the world have had little or no impact in Asia.6. Geopolitical Stability is at an ‘all-time’ high in Asia. Admittedly there has been civil unrest in Thailand and one or two other places. But a savvy Asian CEO allows for disruption resulting from Thai politics every five or ten years or so anyway. North Korea remains an unpredictable threat but has so far proven mostly impotent. The elephant in the room is China. A massive runaway success that would have been inconceivable only a generation or two ago.To paraphrase the words of UK Prime Minister Macmillan to the British people in 1957: “You’ve never had it so good” Congratulations! Here’s to the Asian CEO who has been in the right place at the right time.But it’s not all good news. Looking ahead in the murky crystal ball, headwinds are definitely building up for business in the region. Here are a few examples:1. China Global Powerhouse Years are Finished. Much as everyone misses the highs, it is completely unrealistic to expect China to ever get back to 8% to 10% growth. 6% dropping to 4% seems much more likely medium term. Is the complex domestic economic/social/political contract sustainable under these conditions? How will potential backlashes against OBR play out across the region and into Africa?2. India Struggling with Momentum Despite its best efforts India won’t replace China as Asia’s powerhouse soon, if ever. India’s GDP is only one quarter the size of China today and faces internal bureaucratic and other difficulties which were never an issue in China in the heady days of top speed growth.3. Technological Disruption to Replace People Technological change is accelerating business model change globally, often in ways that we poorly understand and may be ill-prepared to meet in Asia. The historical heart of Asia’s competitive advantage? — Do it more cheaply, with good quality and stay flexible. This model is fundamentally at risk from the emergence of the Internet of Things, Advanced Robotics and Artificial Intelligence. These developments are leading to heavy redundancies in both blue collar and white collar roles globally and at an accelerating pace. Many Asian business models will likely be swept away with the tide of change.4. Climate Change Global Warming and the potential failure to respond to its implications is the number one risk in the World Economic Forum’s Global Risk Report. The four cities with the highest GDP at risk from natural disaster globally today are Taipei, Tokyo, Manila and Seoul according to the Lloyds City Risk Index. The impact of climate change as it emerges will disrupt everyone but could likely displace and disrupt more people in Asia than anywhere else on the planet.5. Water and Food Security There are huge emerging risks around the medium term security of both water and food supplies. With the largest populations on the planet, businesses in Asia will see both risks and opportunities in this area within a relatively short time frame.6. Global Political Tension There are troubling times on the global political stage. On the plus side, progress has been made in USA/North Korea and USA/Cuba relations. The Ukraine/Russia standoff seems to have stabilized at least in the short term. But Brexit, Trump increasing xenophobia and tensions between Russia/USA all indicate business risk levels unprecedented since the Cold War ended.In our own region, religious tensions are likely to increase as fallout from the situation elsewhere. Furthermore, and arguably for the first time in a thousand years, China has become expansionist again. The Nine Dash Line and the grab for the South China Sea receives little attention in the Western media but may have the most significant geopolitical ramifications in Asia since the end of the Vietnam War. That’s before we talk about the long-term implications of the Belt and Road Strategy.The unpredictable question for Asia is “How long can the blue skies last?”Has the successful Asian CEO of the last 15 years built a resilient, sustainable legacy to pass on to future generations? Or a house of cards that will collapse at the first puff of severe headwinds in the region.After over twenty years running, owning and managing risk at some of Asia’s largest companies I’ve written down all the best bits I can remember in an ebook on Amazon Kindle. In this packed book I give practical advice to CEO’s and their teams on how to best manage risk in Asia.To access please just use the following link. https://www.amazon.co.uk/dp/B01MU3GSGS

Photo by Kaique Rocha from Pexels

Why Insurance is Failing?

13 Aug 2018 06:09:00

… and how to leap the gap — at least for companiesThe insurance industry provides amazing support to individuals, families, and businesses, often in their darkest times. Society truly benefits enormously from the proper running of the insurance sector. However, the benefits of insurance provide no immediate gratification to the purchaser. I will explain how the insurance community has historically addressed this issue. I will go on to consider why this has led to systemic weaknesses across the whole sector, which may now jeopardize an industry that I love — unless these challenges are addressed.The ChallengeThere is no tangible product delivered within most insurance transactions. The most risk averse individuals will buy it. The least risk averse will self-insure. However, no-one really wants insurance until they really need it. The customer only buys trust — or a promise of trust when times are hard. This tempts intermediaries to sell insurance using the tactics of fear and commoditization. Front-loaded commissions can lead to a tendency to secure sales irrespective of need. This propensity may lead to misrepresentation; it leads to dissatisfaction; temptation leads to fraud; suspicion and a breakdown of trust lead to disfunctional claims systems; and so it goes. The cycle of fraud in the industry has undermined the true benefits of insurance for a long time. The industry has no product other than trust. There is nothing else to take away from the transaction other than a promise. If the customer considers the promise to be compromised, there is nothing left.The prolonged, cyclical soft market in insurance, coupled with an inflow of fresh capital during an unprecedented period of interest rates close to zero has placed increasing pressure on bottom lines. The unintended outcome has been that many in the sector have systematically underinvested in technology and innovation. The majority of these companies are left with systems, processes, and practices that would still be mostly recognizable by those that were working in the industry in the 1980s. Whilst the insurance sector stagnated, changes across the business world and other industries were radical. It is only in the last decade or so that the world has enjoyed smartphones, social media, e-readers, YouTube, Google Maps, The Cloud, and virtual reality. Within the same time frame, the companies that dominated specific global markets have radically changed. We all know the GAFA (Google, Apple, Facebook, and Amazon) Effect. Changes brought by Uber and Airbnb are arguably even more radical in the transport sector with autonomous driving as well as new approaches to accommodation and the renting market. Customer expectations have changed forever.Connecting Risk, Insurance, and Systemic FailureThe purchase of insurance products should be an important decision-making process for both individuals and companies. However, it is often an afterthought of last recourse, particularly after something goes really bad. Unfortunately, people tend not to like spending time thinking about the bad things in life. We all hope to live in a relatively benign environment. Arguably, human nature tends to allow personal and business risk protection methods to fall down the priority list. Unless we are jolted into action.There is an old adage that insurance gets sold, it doesn’t get bought. Over the years this has been the task of intermediaries — agents and brokers — who communicate directly with customers and explain why insurance is a good thing. When it works well, it’s a tremendous partnership. When it doesn’t work well, the customer feels they are getting poor or biased advice. As with many intermediary processes, there is little transparency as to who is really working for whom. If experience with claims is also problematic — either directly or indirectly — then the whole trust process is undermined. Both individuals and organizations can question the merit of the solution and may seek alternative risk mitigation measures which they feel are more trustworthy.In the corporate setting, the perceived lack of transparency and governance in the insurance industry often translates into distrust in the buying process. The result is that insurance buying is frequently delegated to relatively junior and inexperienced employees who often have other things to do anyway. The purchase process can become a compliance-driven, commodity buy with little focus on the underlying reason for the policies, their coverage, and, most importantly, their security. The relatively low-level employee has a transactional relationship with a broker or agent. The relationship is muddied and sometimes dominated by internal purchasing teams who often have no idea how the transaction should be structured or why it might be important.Everyone loses in this scenario. The CEO whose company is in this mindset has missed a huge partnership opportunity. The broker or agent loses or ignores the chance to educate. There are huge benefits that can arise from a more robust debate and attitude to risk and insurance management. The underwriter and the markets behind the policies often have little or no idea of the quality of the risk protected. So, the market will provide something cheap and cheerful — particularly in the soft markets prevalent at the moment — and do everything in their power to delay or avoid paying claims if something goes wrong.Transparency and Due Diligence: Where Can the Industry go from Here?1. Deal with low penetration of technology. Insurance remains comparatively old fashioned when compared to the financial services sector generally. The failures of companies throughout the insurance stack to address technology issues are legion. Many insurance transactions remain mostly face-to-face and woefully inefficient. This is difficult to address. There is such a strong general distrust in the industry that many customers still retain a desperate need to look into the eyes of someone they hope will still be there in the event of a claim.2. Deal with low transparency. Who gets paid what for the procurement transaction? There is almost no transparency in the insurance sector and a constant stream of high profile criticisms, both from within the industry and investigations by global regulators,[2] show that there remains something intrinsically dirty and incestuous in the complete process that customers never get to see.3. Deal with low speed. Placement takes a long time in insurance and usually involves extensive form filling. As discussed above, that’s nothing compared to the demoralizing claims experience in many cases.4. Deal with low IT security. The sector is well recognized as having comparatively weak data management processes compared to other areas of the financial services industry. There have been repeated small-scale cases of data loss. Fingers crossed there isn’t a “Sony” moment imminent as this will do nothing to help the sector’s already tarnished reputation with customers.Does InsurTech have the all answers? That’s debatable. But clearly change is imminent in some form or another and The Insurtechbook is a superb way to continue our self-critique as an industry.These extracts are from an opening chapter in The Insurtechbook : available here or hereInzsure.com re-designs the SME commercial insurance experience, streamlining the customer journey and reducing systemic inefficiencies. Launching soon in Singapore and Malaysia.#insurance #insurtech #fintech #tech #blockchain

Our team

Steve Tunstall
CEO

Steve Tunstall

Steve is responsible for managing all aspects of the business, including strategy, finance, sales and marketing.

Learn more
Robin Lee 李显龙
CXO

Robin Lee 李显龙

Robin is responsible for managing the overall experience of the business. He is of Chinese-Malaysian descent…

Learn more
Assen Tchorbadjiev
CTO

Assen Tchorbadjiev

Assen is responsible for the technology platform vision and oversight at Inzsure. He is from Bulgaria and moved to the US in 2009.

Learn more

Advisory team

Inzsure

Create an account now…

Sign up

Contact us

Singapore

20 Collyer Quay, #09-01
049319
Singapore

Malaysia

A-38-02, Level 38, Tower A,
Menara UOA Bangsar
No 5, Jalan Bangsar Utama 1
59000 Kuala Lumpur, Malaysia

USA

1595 Adolfo Drive
San Jose,
CA 95131
USA