The Future of Insurance and Bancassurance in the Middle East pt.1

An interview with experts on the current state and future of insurance and bancassurance in the MENA region

 

The Fleming team sits down with Hasheer Kottal (Vice President & Business Manager - Bancassurance | Mashreq, UAE), David Harris (Director - Distribution, UAE & Bahrain | RSA Insurance, UAE),  and Samer Abdulraheem (Procurement Director | Novo Cinemas, UAE) to discuss:

1> In terms of digital breakthroughs in insurance, how can you successfully break into the new digital landscape?
2> What do you think is the main factor when it comes to understanding new customer behavior and sustaining their loyalty in this competitive environment?
3> What is (according to your experience) the optimal way to increase organizational growth using process innovation?
4> How do you see the future of insurance in terms of digital products?

  • Hasheer Kottal
  • Vice President & Business Manager - Bancassurance
  • Mashreq Bank, United Arab Emirates

In terms of digital breakthroughs in insurance, how can you successfully break into the new digital landscape?

Digital breakthroughs is a important topic; when looking into having successful digital capabilities, the incumbents need to look within. Having the best front end digital experience is no good if the back end is not able to provide support, be it with processing or even infrastructure for the staff. The organization needs to be focused on the overall client journey, which will also include how a request raised by the client is seamlessly processed by employees with the most effective tools to complete the task. Historically, most financial institutions have been updating/patching legacy systems to provide the latest solutions to clients; the challenge with this is that ‘time to market’ is affected and the ‘customer experience’ is mediocre. With technological advancement, organizations need to take a deep look into the existing systems and process and then spend the dollars where it is really important. In the new era, simplicity and speed matter; price does have an effect, but is not the key factor for purchase. Infrastructure building should focus on this, and in an industry like insurance, which historically has been very conservative in thought process, needs to start thinking much bolder! For example, rules/terms should not be built around one instance which may happen one time in 100,000 – rather work on making life easier for the remaining 99,999 times.

What do you think is the main factor when it comes to understanding new customer behavior and sustaining their loyalty in this competitive environment?

Today it is no longer about trying to capture the market; a big base does not mean a profitable company, return to equity is key and having the most profitable base is what matters! To do this, data gathering and understanding behaviors/patterns is very important. Unlike the banks, we see insurers lacking in this area. In fact, insurers do have a massive amount of information in the system which can be used to understand customer behavior, on the basis of which the right proposition can be presented in a timely manner. For example, protection plans can be built around having the option to change as per customer life cycle; this allows the insurer to speak to the clients much more than what is happening today. Or, based on customer information provided at the time of application, tangible benefits can be provided to the clients, e.g., during the application process it was identified that the client had borderline diabetes, then the client can be consulted (post purchase) on how to control this ailment. Such initiatives will not only assist in increasing loyalty/stickiness but also word of mouth, which can get more business for the organization and increase the brand recall.

What is (according to your experience) the optimal way to increase organizational growth using process innovation?

The key point to remember with any process re-engineering/innovation is to focus on how the new way of doing business will assist in increasing the productivity of the frontline – how the new process will assist in eliminating the redundant tasks and enable the staff to reach out to the client in a much faster way. Historically, organizations have updated the legacy systems – so-called patching – but it is imperative that companies take another look at these systems. With today’s technology advancement and many fintechs/insuretechs coming up with effective systems, organizations can look outside and implement/incorporate new technologies. This will lead to a big capex, but it is something which is worth the money spent.

How do you see the future of insurance in terms of digital products?

Few transitional insurance products are successful in the digital channel (like motor, travel, etc.) and some have not reached their potential yet (life, saving, etc.). I see many insurers with the opinion that such product lines cannot be successful through a digital channel since this channel does not have the capability of emotional pitch. While in the current scenario this may be true, the risk of not having this capability is massive, which can even lead to the organization ceasing to exist in the coming years. I feel in the coming years, such products (life & saving) will also be commoditized and the purchase decision will be based on what a client sees when he/she explores. There will be a need for face-to-face advice for sure, but decision-making triggers would have happened even before the meetings.

  • David Harris
  • Director - Distribution
  • RSA Insurance, United Arab Emirates

In terms of digital breakthroughs in insurance, how can you successfully break into the new digital landscape?

At RSA, we take a proactive approach rather than following a “wait and see” approach – we know that technology is disrupting the industry at a rapid pace. And as such, we focus on leveraging cutting-edge technologies to enhance existing products and develop innovative new ones – all while putting customers’ needs at the center. We invest in tools that help our business anticipate change and the needs of our customers whether that be in terms of product need, service speed and quality, or ease of access to RSA by customers when they need us. Indicative of this, we provide a first-of-its-kind, easy-to-use, quote & buy online journey for customers to buy their motor, home and travel policies online. This web journey is not only mobile responsive but is also real-time in terms of getting accurate policy quotes, thereby making it user-friendly for our customers. From our perspective, the customer should be able to get service from any number of digital channels and platforms, not to mention any device. Therefore, we strongly believe in engaging with customers on their preferred digital channels including web chat, Facebook, Instagram and email. Regardless of the channel, customers are now time-starved and in need of an instant resolution. Finally, we strongly believe that technology should not replace human interaction, which is the preferred way of engaging with us for some. We focus on keeping a balance between digitizing for efficiency and keeping the human touch. As a customer-centric company, we rely on the customer to dictate what the right kind of balance is and how much human versus non-invasive interactions they wish to have.

What do you think is the main factor when it comes to understanding new customer behavior and sustaining their loyalty in this competitive environment?

The digital era has set certain must-have expectations for customers in terms of the ease and convenience of digital transactions. There is also an opportunity for insurers to deliver best-in-class customer experience and benefit their bottom line by cutting costs and lowering inefficiencies. As smartphones, iPads and other such versatile mobile devices proliferate, they will also demand the ability to conduct business when they want, from wherever they want, and on the channel of their choice. The reality is that embracing technology is the only way forward. It is key for brands to understand that now more than ever, customers require their demands to be met in a fast and secure fashion. Customers should sit at the center of the company’s plans – be it investments in technology, new product launches or expansion to other geographies. One thing is clear: what is good for the customer is good for business. As for brand loyalty, this has to be earned time and again through building trusted relationships. As such, client satisfaction acts as our North Star in everything we do. For us, digital transformation can only mean enhanced customer experience – without this, it loses its real shine factor.

What is (according to your experience) the optimal way to increase organizational growth using process innovation?

What we see is that a sizable number of companies tend to approach innovation as a nice add-on or even a trend they must take part of. Having the right approach to innovation can reflect positively on the bottom line. Before starting any innovation project, team members, including the CFO and CIO, must be aligned on the purpose of innovation. Most importantly, this should be tied to the overall strategic business objectives. No party should have a different set of expectations, but rather agree on these upfront and measure successes along the way. In most cases, the purpose usually reflects the following goals: transforming the customer experience, optimizing operations and achieving greater efficiency, calculating income revenues, or simply investing to stay in business by adopting the latest technology trends.

How do you see the future of insurance in terms of digital products?

As we move forward, the biggest question will be how to harness the power of technology to optimize customer experience. For us, our digital transformation strategy should keep the customer at the center and deliver value. We realize that many future customers are millennials; technology is a big part of their consumption and decision-making habits. Companies which fail to ride the innovation wave today will certainly be left behind tomorrow. Many innovative technologies are set to spur a fundamental transformation of the insurance industry. Technologies like cloud computing, the Internet of Things (IoT), advanced analytics, increasing smartphone penetration and connectivity, digital platforms and artificial intelligence (AI) are creating new risks, providing new ways to control and measure risk, getting closer to customers and reducing costs, improving efficiency and expanding insurability. Technology enables us to provide real-time accessibility to our customers directly or through our partners. Based on experience, we see that clients rate digital and cross-channel engagement as being very important and an area in which they seek improvement from insurers. From a user experience journey, consumers turn to digital and online platforms to complete their searches and source quotes, but prefer direct contact to complete the purchase. Therefore, we can expect to see a growth in premiums with more robust digital platforms which support this research journey. Looking ahead, this market can achieve much more by harnessing big data analytics to gain better insights into consumer buying behavior and preferences. With a highly tech-savvy population and government support for fintech and innovation, it’s only a matter of time before the way that insurance products are presented and sold changes. It’s clear that insurers like us who realize this early on will remain competitive moving forward.

  • Ed Gooda
  • Managing Director
  • Fenchurch Park Limited, United Kingdom

In terms of digital breakthroughs in insurance, how can you successfully break into the new digital landscape?

Through specialist consultants

What do you think is the main factor when it comes to understanding new customer behavior and sustaining their loyalty in this competitive environment?

Relationships with brokers

What is (according to your experience) the optimal way to increase organizational growth using process innovation?

Engaging with specialist consultants

How do you see the future of insurance in terms of digital products?

More digitalization