EP 100 – Winnie Wong, Avo Insurance and Walter de Oude, Aviva SingLife – Go Big or Go Home

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Michael Waitze worked in Global Finance for more than 20 years, employed by firms like Citigroup, Morgan Stanley and Goldman Sachs, primarily in Tokyo.  Michael lived and worked in Tokyo from February 1990 until December 2011.  Michael always maintained a particular focus on how technology could be used to make businesses more efficient and to drive P/L growth. Michael is a leader in the digital media space, building one of the biggest and fastest-growing podcast listener bases in the region.  His AsiaTechPodcast.com show has listeners in more than 130 countries and his company, Michael Waitze Media produces some of Asia’s most popular podcasts.

Theresa is the founder of the Asia InsurTech Podcast and a Thought Leader on innovation in insurance in Asia. She has worked for ten years for leading multinational insurers in Europe and Asia before turning to management consulting and venture building with the goal of transforming the insurance industry and helping shape its future in the region.

Guest
Winnie Wong

Winnie is the CEO & Executive Director of Asia Insurance Company Limited (a leading composite insurance company in Hong Kong) and Avo Insurance Company Limited (the first virtual general insurer in Hong Kong with a mission to create a simple and straight forward digital insurance experience that integrates seamlessly into everyday life). Prior to Asia Insurance, she was the CEO of Aon Risk Solutions Hong Kong/Macau. She has over 20 years’ experience in Insurance and Risk Management Consulting. Winnie is Chairman of General Insurance Council and a Governing Committee member of Hong Kong Federation of Insurers and Chairman of Task Force on Insurance-linked Securities. Further, a Councilor of Motor Insurers’ Bureau and Employees Compensation Insurer Insolvency Bureau. She is also a Director of the Alumni Association of Shaw College of The Chinese University of Hong Kong and the MBA Alumni Advisory Board of The HK University of Science & Technology.

Like all entrepreneurs, Walter de Oude started with a strong belief - The potential of money can be unlocked for everyone, and that existing financial services were not doing a great job at it so far. As founder and CEO of Singapore Life, he has achieved what many thought to be an almost impossible task - starting a life insurance company from scratch. This is a role for which he is very well suited - and actuary and former multinational insurer CEO. Singlife has grown from strength to strength with a fast growing capital base, continuing innovation and strong customer support.

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For our 100th episode, Asia InsurTech Podcast spoke with Winnie Wong, the CEO and Executive Director of Avo Insurance and Asia Insurance, and Walter De Oude, the deputy chairman of Aviva SingLife, about InsurTech in Asia. How has the industry developed over the past 2 years? What is next in InsurTech in Asia? There is probably no one better to discuss the state and future of InsurTech, than the neo-insurer that is disrupting the industry, buying insurance incumbent Aviva and the insurance incumbent that started its own InsurTech. Singlife and Avo Insurance are two successful examples for InsurTech made in Asia and show us what the future of insurance might look like.

Find the episode transcript here:

Michael: Hi, this is Michael Waitze and welcome back to the Asia InsurTech Podcast. This is the only podcast in Asia focused on insurance that gives entrepreneurs, thought leaders, and investors a platform to discuss how technology is reshaping the insurance industry in Asia and the rest of the world.

I want to say that I’m so happy, today I’m joined by Winnie Wong, the CEO and Executive Director at Asia Insurance and Avo Insurance, Walter De Oude, the deputy chairman of Aviva SingLife and Theresa Blissing, the founder of the Asia InsurTech Podcast. And just for our listeners that know this already, this is our 100th episode. I just want to thank everybody for supporting us all this time. Very happy about that.

Winnie and Walter, thank you so much for coming on the show. How are you both doing today?

Winnie: Looking forward to it.

Walter: Yeah, I’m doing great, Michael, Theresa. Great to be on the show again.

Theresa: Thank you guys so much for joining us for our 100th episode. It has been an amazing journey. Very happy to have you on the show for our anniversary episode today.

Michael: So we are almost two years into this. So I want to ask both of you and let’s start with Winnie. What do you think is the biggest trend in InsurTech in Asia right now?

Winnie: Thank you, Michael. I think the biggest trend in InsurTech right now in Asia, can be reflected in different areas. The first part is definitely in the product side. We see a lot of simplification of products to improve customer satisfaction and increase productivity, as well as offering different standard options to reduce customer confusion, because historically, insurance has been perceived as something really complex and traditional. And on the other hand, as simplification of our product portfolio, a lot of direct and digital insurers will have simpler product portfolios now, in the top 10 to 15 inforce products generate 95% of the total gross payments written for a lot of these insurers.

And the second area is on distribution and omni channel approach. Customers want a mix between digital self-service and in-person advice. A lot of innovative online portals and sales forces are also digitally enabled for better lead generation and Asian and broker matching etc.

And the third area we see is pricing and underwriting. Through technology insurers will be able to automate pricing and similar products, for example, auto, personal liability, personal accident, home insurance, etc. and the use of machine learning models and analytics for tailored as well as dynamic pricing. But of course for commercial and corporate clients and corporate business, it will be automated later. And a lot of people think that will only be automated, probably by 2030. And on a policy issue and service, we can see that customers can receive that policy documents through online portals, eliminating a lot of paper forms, and chatbot can help with some basic tasks. On the claim side, of course, we have human plus artificial intelligence, and digital advancement in claims to boost productivity and overall customer experience. And of course, a lot on fraud detection as well.

Michael: Got it. And Walter, how about you? What do you think from your perspective, you’ve seen a ton of growth in the stuff that you’ve been doing since the last time we talked. I think it might have been almost a year ago I can’t remember actually. What do you think now is the biggest trend in InsurTech.

Walter: We have done phenomenally well since we spoke and the the success of Singlife story up until now is based on the fact that we’ve been focusing on the thing that has been changing most in our industry. And that thing is very simple. It’s all about customer advisor experience right? Customers want to have a better experience of their insurance companies, a better experience of financial services, and they want to have a better experience of their advisor. And advisors themselves, they train more now towards independent or third-party advice or advisors that can advise customers on multiple multiple products or from multiple companies. The trend towards improving the experience of the customer in both the direct to insurance purchase and in a advisory space is everything. Singlife has done phenomenally well in managing a mobile first customer engagement. That mobile first touch point has meant that we get to talk to customers far more regularly than any other insurance companies have ever been able to do. Which means that the deepening of relationships is there. The trust of the service is there and the ability or the intent to try and deepen the relationship or expand the offerings is embedded in that. And so that trend is going to continue. We’re right at the head of the curve of that. And I expect the industry to try and catch up over time.

Michael: Yeah, I completely understand I want to go to you for like, for our next question is, when you look back at the past two years, do you think any of those trends have changed? Or do you still think that even two years ago, that it was all about sort of customer focus and the the advisor focus as well are a thing changed? To me, it looks a little bit like two years ago, when I first started doing this, it looked like it was people were more focused on like, little bits and pieces of the InsurTech ecosystem. And now it feels to me like there’s this over arching reach on how to handle a bunch of touch points there, do you feel like things have changed in the past two years?

Walter: I think it should have been the execution of the momentum that’s been building, right? People have been targeting and focusing on customer experience. And now we have much more advocacy of that and build around that. And the momentum then just grows, which is through the industry. I think in the InsurTech space, the challenge has always been, as you say, people just looking at bespoke parts of that engagement, you know, a set of services, whereas the success is coming from actually doing them all and doing them all jointly and together and aligned. You know, a lot of the InsurTech companies that we’ve worked with have really struggled to get a share a voice within the insurance companies that want to deliver or should be delivering your products. But you know, as Singlife was an InsurTech from its origins, we’ve had these things as part of our DNA from the get go. And now with the Aviva Singlife coming together, we can take all of that momentum that we’ve started with and pull it on a much, much bigger and broader platform across the the advisory and much larger customer base that we have. So you know, totally in the right direction, nothing’s really changed. It’s just momentum.

Michael: I want to get back to that in the role of insurance and comments in a second. But I wanted to go back to Winnie and ask you, in your experience over the past couple of years, do you see that things have changed based on the things that you think are trending today versus things that were trending a couple of years ago?

Winnie: I think in Hong Kong, there’s been exponential growth in the InsurTech space. For example, we have launched four virtual insurers in Hong Kong. Avo is the first virtual general insurer in Hong Kong. And the government also introduced several sandboxes, through different regulators, and insurance authority, of course, encourages insurance practitioners to use sandboxes to test the ideas. And now with the government support and regulation, we see that it has helped to build up the momentum, as well as the interest and ability for InsurTech to grow in the region. So I think it’s all very positive in Hong Kong as well.

Michael: Got it. So I want to go back to and I’ll start with you Winnie, if InsurTech isn’t only about startups, as Walter mentioned, right, we talked about the role of the incumbents. What do you think that role is? And how do you think insurtechs have been shorted, particularly in their relationships with incumbent insurance companies?

Winnie: We actually seeing a lot of collaboration and investment activities between traditional insurers as well as InsurTech startups. We are lucky to be able to run a well established insurance company Asia Insurance, while at the same time, we got the license to operate our virtual General Insurance Company. And there’s definitely a lot of learning and sharing between traditional insurance space as well as startups. So with all these collaboration and sharing and learning, I see that it’s very healthy, and very positive for our industry to grow.

Michael: Got it? And, Walter, I want to come back to you on this, because you kind of brought it up. In a way now that Singlife has merged with, and congratulations, by the way on that, with  Aviva, or Aviva has merged with Singlife, how do you see the role of insurance incumbents? And because you’re kind of like a hybrid in a way? How do you see those roles?

Walter: Singlife, as you know, is a startup company, we’ve always taken a philosophy of, you know, kind of go big or go home. You know, there’s no middle ground you if you’re gonna play, it’s all chips on the table, right? So let’s just do this, do the best you possibly can, and off we go. So we bought the coolest take at the time, three, four years ago about digital experiences and, and our view was that we would never be able to change the language of the or the mindset of the incumbents. And that came through in the very early days of us doing fundraising were we, in the early stages of Singlife we thought the most logical parent or capital provider for a company like ours would have been a big old incumbent insurance company who would want to use us as a platform for innovation. But we found that the arrogance and you know, old school world of insurance guys were saying, Well, you know, surely we can do the stuff ourselves, you know, why do we need an InsurTech to help us? We’ve been around for 100 years, you guys have been around for six months? How do you think you can teach us some stuff, right, and that blindness of the insurance industry, I found, is in a short sightedness, actually, to the detriment. And here I can stand here and say, Well, look at us now guys, look what we’ve done. We, you know, you go bigger, go home. So that’s what we did. We bought cool stuff. We went full on license regulator, and proper capital, throw the kitchen sink at the problem and see what comes. And that’s what we’ve done. And now the Aviva Singlife story, taking this story about, you know, let’s just do the biggest best thing we can, you know, if you can’t beat them buy them.

Michael: Do you mind if I ask you a follow up question? I’m really curious now. You mentioned this right? Now that when you go back to the existing insurance companies and incumbent insurance companies, when they look at you, do they talk to you differently? In other words, now that they’ve seen what you’ve been able to accomplish in this space coming, like you said, from a startup where they said, you were only there for six months, and now you grew into this much larger company? Is the response, you get different?

Walter: Yeah, very much. I think in the early days it was, you know, almost this,  looking down and saying who these guys think they are that they can come in and disrupt an established industry like ours. And there’s always this kind of complacency. Well, we didn’t believe in you really as a competitor in the early days, we still don’t really believe that you’re going to come and take any slice of our pie. And so we just kind of watch and let it go. And then and now, we’re starting to see the whole industry change because of where we’ve pushed when we started to see the boundaries that we’ve been pushing in the financial services space. We are expanding liquidity around savings products, we started to see our competitors income and starting to copy the things that we did as innovations. And they’re getting there because we’ve set a new standard around the things that people are looking for in the financial services providers. And so they’re now waking up to the fact that, you know, we are the New.

Theresa: I couldn’t agree more. That is also something that I experienced a lot, the arrogance that existing insurance incumbents often have towards startups and new technologies. But this is certainly changing, and we are seeing more and more incumbents now adopting InsurTech and I think the recent numbers of investment into  InsurTech has shown again, that the industry is still very strong. More and more insurance companies are also investing. Which now also raises the question, if we are seeing a bubble in InsurTech or if there is still room for new players and new new disruptors. Winnie, what is what is your opinion here?

Winnie: I think InsurTech is definitely here to stay. There is still a lot of opportunity, especially with a change in people’s buying behavior due to COVID. So people in Hong Kong were very conservative in the past because Hong Kong is a small place, meaning people can see each other very frequently, relying on agents and brokers and all that. But then with COVID people are having much greater confidence, and has developed a permanent habit of buying things online. So I think this is definitely helping us. And with all the money pouring into InsurTech, we will see of course some winners and some losers coming out of this heavily regulated industry. But I can see that the beauty of it is we have been heading towards the direction of creating a lot of whitespace opportunities that historical incumbent players were not able to tap into. For example, the millennials, a lot of the young sector that underserved segments, they were not properly served by the insurance industry in the past. But right now we’re very much focused on targeting these young segment, these people who did not think about insurance before. But since we make it so interesting, so close to them and integrate it into their daily lives, they find it acceptable that they don’t, well, they don’t stay away from it. For example, when we went to a lot of universities to do recruitment talks, to do sharing sessions, etc. In the past, they did not welcome traditional insurance. But right now when we go in and talk about InsurTech, and talk about virtual insurance companies and all the online customer buying experience, a lot of young graduates, a lot of young talent are interested in joining our industry, and interested in finding out more about it. I’m very happy to say that when we started the company, of course, with a top team, we need a bunch of experienced insurance experts. The average age was 40-something. But right now, the average age of Avo is 20-something. So it shows that we are able to attract a lot of young talent. So that’s all good news. And I think, with more young talent, more young customers joining us and buying at services and solutions for months, I think, I think InsurTech is here to stay.

Theresa: I believe that InsurTech helped the whole industry in their image problem. Because insurance had an image problem, right? And now with these new companies, with Avo, with Singlife, insurance becomes more attractive as an employer. But is also able to attract these new segments of millennials or generation Z. Something I have witnessed in the past two years is that more and more tech companies have actually joined the insurance space. So we have Grab coming out of Singapore. But we also have American tech giants like Amazon and Whatsapp, Facebook tapping into the insurance market. What is what is your view on these new players in the market? Maybe Walter, let’s start with you.

Walter: I think they’re coming at the problem from a distributions perspective. So they obviously have access to reams and reams of customers. And they’re building marketplaces of services. And then when you’re your main core asset is not so much the products that you provide, but the customer base that you serve, which would be the case in you know, Grab Google, all of them, Amazon, the Holy Grail, then is to how do you increase the lifetime value of each of those customers. Insurance is a great way to do that, because of its fee based income. It’s relatively intangible, and financial aspects of that. And it’s an attractive market space from a profitability perspective. So, of course, they would look to improve their customer value by adding new services. The question for me is, you know, do you buy insurance from your taxi driver? I don’t know. I’d buy food from him. Yeah. But yeah, I don’t know. Time will tell.

Theresa: Yeah, it’s just the the the interesting part about this is, you know, people’s perception of the different industries. When it comes to sharing data with an insurance companies, a lot of surveys showed that consumers are very reluctant to share their data, especially when we are talking about, you know, real time health data, telematics data, lifestyle data. But nobody has a problem sharing this information with Google, with Amazon, with Facebook, right? So maybe people are willing to buy insurance from these tech giants, just because they seem to have more trust in them or more trust in their products. Winnie, what is what is your opinion on that one?

Winnie: I think these are examples showing the insurance landscape is definitely changing. And that insurance is now much more integrated into people’s daily lives. And this is exactly what Avo is aiming to achieve. And people want a seamless buying experience similar to the one offered by Amazon or Grab. And people want better buying and after sales claims experience. And that will make traditional insurers look to leverage technology to provide better overall experience to their customers in order for them to stay competitive. So I think with COVID, that’s definitely bringing some impact to our industry, in a positive and a negative way. Of course, in a negative way, some of the business like travel was definitely affected. But on the positive side, it’s definitely accelerated the push towards greater productivity, and in particular shift to digital. And the opportunity to improve productivity and reduce overall operational expenses by up to 40%. And also the same at the same time improving the overall customer experience. And as I mentioned, I think a lot of these customer buying experience and buying behavior has permanently changed. So there is a immediate need for digital transformation across the insurance industry. So it’s definitely an accelerator for incumbent players to change.

Michael: I have my own view on what I call alternative forms of distribution, companies like Grab and Amazon. In a way, I agree with what Walter said. And we can talk about this more if you’d like. I think that it’s unlikely that people are going to buy life, health, general Insurance, from what they still perceive, even though some of these companies are trying to change the perception of themselves, from a taxi company or ride-hailing company into a financial services company. But I believe that buying food and buying rides, sure, over time, people going to default to buy insurance from insurance companies. And I think they’re gonna buy it in a way that’s different than they bought it in the past. And I also believe that like you said, there’s a way to monetize those customers, we have seen Grab has 160 million downloads and Amazon obviously has a ton of people’s credit cards and data. But I do think that in the end people are going to want to buy insurance from insurance companies, gonna want to buy rides from a ride hailing company anyway.

Theresa: Future will tell. I just think, if you’re looking at what Grab and and also GoJek are doing in partnerships with like, Good Doctor, or HaloDoc,  also delivering medicine, I think there is the possibility. But these companies then have to change and we’ll be more than just the ride-hailing company. But I think that is a good start to ask our next question: What do you think is next up in InsurTech? We were talking a little bit about the past two years, how the landscape has changed, how COVID has impacted the industry and certainly has accelerated digital transformation. What is going to be next in 2021 and the coming years? What trends do you think we will see in the space in Asia?

Walter: We’ve taken a view that the opportunity for InsurTech is ready to broaden the boundaries of what insurance has traditionally done, and to wire some of these things together with other parts of the services out there of the sector. So I’ll give you a Aviva Singlife example, we took a view that people want to save money, but one of the biggest barriers to saving money is the traditional insurance approach, which locks you in for million years before you can take it out again with all these heavy penalties. And we found that people are actually still going to save for the long term and are more likely to do so if they know that they have a short term way out if they need their money. So the technology or the InsurTech change was then to create liquidity on the back of longer term savings with the intent of actually driving longer term savings to a new height. And we saw that borne out in our own practice, where we’ve done huge amounts of volumes in expanding our liquidity type of service on the back of a savings plan just by adding the symbol of liquidity, which is you know, a bank card like a Visa card, you put them in the back of an insurance product, and it gives you the long term savings and higher returns than you’d expect from an in savings product. And it’ll give you the short term liquidity and access to your cash that you’d expect from a more traditional cash style of liquidity product from another kind of financial institution. So that blurring of the lines between the various sectors in the financial services industry has been something that we focus on very much as an InsurTech and we’ve seen other stuff happening, the cycles of who has done what, you know, and who’s ahead. Clearly payments has been way ahead. Payments remittance, has been right at the cutting edge of tech, banking has been a step behind that. And insurance has been in the cycle behind that as well. And these things are all going to blur over the next two or three years.

Winnie: So Walter before we get to Winnie to have her answer that question, I want to follow up with you a little bit. Do you see in this blurring of these sort of financial service products, because insurance companies have to match their assets with their liabilities, right? In other words, if you have a life policy, it could be 30 years long. And like you said, you want to give people liquidity. Do you think there’s an opportunity to blur that line even further, and have a company like Singlife or any other new new style insurance company, offer like mutual funds or any kind of investment products that are sort of more sophisticated than just a banking product,  as well?

Walter: Absolutely. Insurance companies have been doing this for years, they are called investment linked plan. It’s just wrap them up in insurance and add a couple of gadgets and wizardry and more protections and complex stuff. Mostly for the betterment of advisors to have something to explain to their customers to sell. But the componentry there is to take the best of protection, the best of long term wealth funds, whatever, stocks, bonds, bank accounts, neobanks, whatever, wallets, and plug it all together to an ecosystem, which is providing a useful set of services to customers, and that’s where it’s all going.  That’s where Singlife is going for sure.

Michael: Winne, do you want to take a stab at that question as well?

Winnie: Yeah, sure, yeah, very much in line with what Walter just mentioned. We would foresee a lot more collaborations and, probably interoperability among a lot of the virtual market players in various financial sectors. For example, we have virtual insurers, we have virtual banks in Hong Kong, we have four virtual insurance, a virtual bank now, and then a lot of virtual retailers. So there will be a lot more collaborations among them. And we’ll make further use of technology to provide insurance coverage for somethings that were not insurable before. More than half of the products offered by Avo were first of its kind when we launched them. So basically, they were first in Hong Kong, first in the world. For example, we have e-wallet protection, which were not available before, because e-wallet is only popular recently. So that’s why we offer e- wallet protection, we offer, issue insurance and all that. So all sorts of different protection that were not available before and now made available with the help of technology, and with the help of more data. And we will see a lot more innovation in, for example, API plus blockchain plus a shared platform, a lot more collaboration from our channels as well, entities like insurers and tech companies to build and expand the entire insurance ecosystem, and a lot more innovation on 5G, IoT, AI as well as data. As developments like 5G and the expansion of IoT devices find more applications in the workplace. Feeding data into a network can redefine the way that insurance, InsurTech gather information. And we can gather a lot more useful data than before. And then the data driven technologies can also enable more personalized products with pay for usage, customer centric product design, etc. Both in terms of depth as well as what is affecting our customers. There will be ultra customized policies, using new streams of data from internet enabled devices to dynamically price our premium according to our observed customer behavior. So a lot more can happen, beyond our imagination. I think this is what I can foresee.

Michael: Theresa, what are you thinking?

Theresa: Well, I couldn’t agree more with Walter and Winnie and what I took out of here is what Walter said, flexibility is important. And that is something that insurance incumbents are often lacking. If you’re only talking about withdrawing money from an account, often the legacy system is the problem that incumbent insurance are not able to offer these flexible products. So flexibility is important. And Winnie mentioned collaboration, and that is also something I see as a topic that will continue in 2021 and beyond. All these platforms, alternative distribution, where you have an ecosystem of a platform provider, I don’t know an Amazon, then you have an insurance incumbent providing the the product, but then you also have a technology provider, who, you know, ensures that there’s the flexibility needed to offer these innovative products at scale to like a digital economy. So yeah, definitely gonna be an interesting months and years to come and insure tech in Asia.

Thank you guys so much. I think we are already at the end of this anniversary episode. Thank you so much for joining us. Thank you, Michael for being such a wonderful host. And we have been doing this together now for almost two years and yeah, I couldn’t have wished for for a better host than you. Thank you so much.

Michael: Thank you also to to Winnie and Walter and Theresa, you’re amazing.

Winnie: Thank you Walter, Michael and Theresa, thank you and great to meet you

Walter: Thanks for having us on the show.

Find our previouse episode with Walter De Oude here:

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