In partnership with TDI Connect and ITC Asia we recorded a live podcast with Cherie Wang, a co-founder and CEO of Planner Bee, Eddy Wong, a co-founder and CEO of VSure and Lapman Lee, a Professor of Practice (ESG and FinTech) at the Hong Kong Polytechnic University and a Board Member of the FinTech Association of Hong Kong. The panel talked about what is next in InsurTech in Asia and some of the trends we are seeing in the region.
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Find the transcript of our conversation below:
Michael Waitze 0:00
Michael, over to you. Thank you very much, Therese. I’m really looking forward to this. I’ve wanted for so long to do a live podcast. Anyway, my name is Michael Waitze and today in conjunction with TDI Connect, so thank you very much for organizing during this and ITC Asia, the Asia InsurTech podcast is going to moderate a panel discussion as Theresa mentioned, and it says up on the screen, What is next in InsurTech in Asia? We’re going to be joined by Cherie Wang, Eddy Wong and Lapman Lee. And before we get started, we’re gonna have each one of them give a little bit of a quick introduction, just for some context. Cherie why don’t we start with you?
Cherie Wang 0:40
Thanks, Michael. Thank you, TDI for the invitation, really happy to be here today. I’m Cherie the founder of Planner Bee. I have been in the industry for over a decade. My experience lies mainly with end consumers as a chartered financial planner and a life underwriter. And that really led me to building Planner Bee, an app that simplifies and automates financial planning specific to insurance, and let people purchase it in just a few minutes. Thank you.
Michael Waitze 1:09
So we were going to go to Eddy next, but we’ll wait for him to come back into the room. Lapman why don’t we start with you? Why don’t we go with you for a little bit of an introduction.
Lapman Lee 1:16
So here live from Hong Kong, Lapman Lee. I’m a professor of practice in ESG and FinTech. And I think one of the things we’re seeing in Hong Kong is actually also the combination of ESG in FinTech is Hong Kong has a ambition to be a risk management center for Asia, and also a green finance center. And we’re seeing more traction in terms of also technology firms, InsurTech firms playing a role working with insurers. I see Eddy got back, Hi, Eddy.
Michael Waitze 1:47
Eddy! Go on Lapman and then we’ll jump out here in a second.
Lapman Lee 1:53
That’s it. And then an additional role that I’m having is on a board member of the Hong Kong FinTech Association and founded the InsurTech committee a couple of years ago. That’s probably one of the reasons I got involved here as well. So back to back to you, Michael and Eddy.
Michael Waitze 2:08
Great, Eddy, why don’t you give us a little bit of your introduction for some context as well. And I love your shirt by the way.
Eddy Wong 2:14
Hi, guys. I’m Eddy Wong, the co-founder CEO of VSure.life, a FinTech / InsurTech company. We sure is a Malaysia first on demand lifestyle digital insure aprroved on the the Central Bank of Malaysia Bank Negara Malaysia FinTech regulatory sandbox on a vision to digitize Malaysia Incorporated. And we want to help to create a better financial safety net for all Malaysians, you know, redefining protections for the masses and laying the digital insurance groundwork for Malaysian future. Same like Lapman, I’m also the board member of FinTech Association of Malaysia just voted in as one of the office bearer. So hopefully, Lapman will be collaborating a bit more in terms of cross country FinTech Association. I also sit in the board of a few consumer tech company in Malaysia, you know, advising and mentoring startups in Malaysia.
Michael Waitze 3:10
Theresa mentioned everybody that’s listening as well. This is a live podcast. And one of the things one of the benefits of having it be live is that you can go to the Q&A bar and ask questions and feel free to just type something in there when you have a question. The way I like to do this is very conversational. I’ll also encourage the guests to talk to each other because I like the way that works. And I think it’s much more interesting, actually. So don’t wait until the end if you have questions. And I’ll see if I can fit them in. I also want to start this conversation with Cherie, which now I know how to properly pronounce your name. So I’ll get that right going forward. Thank you for letting me know, from a consumer perspective, but I really want to talk about how things have changed over the past pick a timeframe, if you want over the last five or so years? How has InsurTech played a role or at least benefited from changes in consumer behavior? And what role has tech played in that? What have you seen, particularly with your financial planning hat on.
Cherie Wang 4:06
Yeah, I think the industry has changed, the demands have changed a lot over the last decade. Let’s say 15 years ago, you’re unlikely to find a lot of information on insurance, let alone the policy wordings and stuff like that on the internet, that makes it very hard for people to know exactly what to look out for until they speak to someone. So it has to be a face to face interaction. But moving forward towards COVID till now I think the the speed of acceleration towards online purchase has increased tremendously. And that’s mainly because first we have more information on the internet. And secondly people are are they don’t like meeting people as much anymore. They like the comfort of the omni channel approach where I want to just be at home and figure out things on my own. I think I know with the help of Google. The information is there for me means they would like to have the first steps into information, the purchasing experience. And only if they really need to, then they speak to someone. And that behavior has changed from 10 years ago to now, the only issue we had pre COVID is, I think we we have very little support for this sort of behavior. There’s virtual banks, you know, checks are phasing out, but insurance is still very much a dinosaur, you know, but I’m glad it’s changed over the last few years.
Michael Waitze 5:34
From your perspective, right? If you’ve been involved in this for a while, is this just a COVID thing? Or do you think it’s some kind of combination between COVID? Obviously, information dissemination is important. But how about a generational thing? Right? So if you look at my generation versus your generation in the way it interacts, even with existing technology, do you see a difference there as well?
Cherie Wang 5:54
A huge difference. I think this question alone will take up 30 minutes. But if I try to concise this really is first generational, but generational is just the uptake. So early adopters tend to be younger when it comes to technology. So they’re because they’re just technology first when they’re looking at things online. But when that get becomes a norm, actually, the older generation will take on that behavior as well. And that we can see from just getting a taxi online versus calling one in the past or flagging one down is impossible these days. So it’s the same for anything including insurance, right. But the online community, because younger people are just communicating more online, you can find more information on people’s experience with insurance or whatever it is on the internet. So people could learn from each other from that sort of literature. And then they feel like they’re more empowered to make decisions on their own with the research that they created. They have made on their own and you’re more likely to trust your own instincts. And you, you are more responsible for your own actions. And we find that that sort of decision making that is more self serving more active versus passive is more prevalent with people younger than 30. And that’s why we started Planner Bee pre COVID. Actually, we only had a huge uptake during the period of the lockdown. But we saw this trend coming in from 2018 onwards and 2019 MAS, they announced the open banking framework. And we know like this is this is moving forward towards the direction of the UK. We’re just glad that you know insurers are being pushed to do a lot more in their virtual insurance as well, moving forward with that sort of behavior.
Michael Waitze 7:40
I want to follow on because I do think this idea of the community helping people buy their insurance, right? In the old days, everything was done kind of in a vacuum. And if I was meeting with my insurance agent face to face, I didn’t have the support. You know, there was this game show in United States that said you could use a lifeline, right? And there were so many times where it would be great if you could use a lifeline, not because you didn’t have an idea what was going on. But because it would just make you feel more comfortable. Eddy, maybe I can come to you and ask you about this idea of in a way, right, this is part of the financial inclusion discussion, right? And also, and I don’t think you can remove inclusion from the literacy part of it too, right? If I don’t understand what’s going on, I can go into my community and ask them. And once I’m literate in this, just like everything else, right, like I wouldn’t drive a car without actually having driving lessons but I’m meant to buy insurance without having insurance lessons. How do these things come together?
Eddy Wong 8:34
I’m so glad that Mike, you ask this question. Because you know, this is exactly the same the big problem that we’re facing in Malaysia in terms of financial literacy, at the same time, you’re seeing that digital literacy is growing leaps and bounds so fast. People are more used to buying things online faster than financial literacy. Right. And that’s a huge gap. And when this kind of huge gaps do continue to exist, you know, it’s making it very difficult for the masses to really buy insurance online. Right. And don’t get me wrong, I think we are seeing the trends are picking up and has what Cherie is just mentioned. But there is a huge play for all, you know, public and the the government sector need to do to to drive financial literacy. Right. I think the key problem is that our financial products are too sophisticated for very intelligent people because it’s created by intelligent people. Right? But the common people they just need some simple language. Don’t tell them about what was premium holiday. But what do they mean by premium holiday it is crazy, like premium does have a holiday? So that kind of thing, right? We need to break the ice in terms of driving financial literacy. And it’s a huge role that InsurTechs like us or digital insurance or financial digital financial planner, like what share is striving to drive financial literacy to bridge the gap. Once the gap is getting smaller and smaller, and then how InsurTech is helping the incumbent players to design products, that is simple and easier for the masses to understand as how we can actually make it take. So that’s a huge play for us to fill the gap.
Michael Waitze 10:17
There’s so many things to unpack there. So one of the things that Cherie mentioned, right, obviously, was omni channel. But if you combine this idea that there’s information and potential sales coming from a bunch of different channels, right offline, but online in places maybe that weren’t expected, and we can talk about embedded to the extent that you want to, right, because if insurance is embedded inside of another product, you still have to be literate enough to understand that it’s there, right? So and you’re right, the adoption of technology is happening so much faster than the understanding of the implications of that technology. But more than that, right? Can you give an example of this product simplification? We can talk about products being simplified and being more relevant, but maybe you can give an example. So people can get a sense for what that really means.
Eddy Wong 11:03
Yeah, I mean, for instance, in the first of all, understanding the financial responsibility of each individual starting at a very young age, we are talking about, you know, targeting the millennials, right, they need to understand the need for them to understood what is their financial responsibility to have the right, you know, savings, protection and stuff like that, that needs to start with, because I don’t think universities or schools actually teach those students at that point in time. So we need to do the right intervention to really educate them at a very young age, so that they know exactly, it’s their responsibility to really make sure they have some basic protections. I’m talking about basic stuff, right? A personal accident, right? Your term life insurance, right? Your medical and health, these are the basic stuff, these are very simple product, you don’t have to go through an insurance agent to sell you some investment laying or live whatever complicated proposition to you, right, you can leave, you know, these are the basic stuff that you need, right, apart from savings, investment, and stuff like that. So that part, you know, we need to do the right intervention at a very early early agent, especially at the UC level, then, you know, we need to work with the right incumbent or InsurTech, need to package it in a very simple language to make it available online so that people can actually empower to drive financial protection themselves instead of having to go through an agent.
Michael Waitze 12:24
And this gets back to the product innovation, actually, that Cherie was mentioning before, and we’ve got a question from somebody in the audience. But I want to ask you, because it’s so relevant to this part of the discussion. And that is what we talked about the generational differences, too, right? And I think it’s pretty obvious to everybody that I’m way older than you are. And that’s why they didn’t want to ask me, they wanted to ask you, and the question was, what sort of insurance products? Do you see the generation who are now like 18 to 25 year olds will buy during the next three to five years? And how do you see this as a challenge for product development and product innovation? It’s a pretty interesting question. Sorry, please go ahead.
Cherie Wang 13:03
Well, again, a lot to say about this. First of all, I think that the younger generation, they’re a little bit more short sighted with regard to their finances. And that’s natural, because of the way parents have taken care of people, they are less worried about money. And that means that they’re less likely to think about anyone else about themselves. So they’re more likely to look at products, that’s going to make sure to ensure that they’re not a liability. So medical insurance, or these are basic stuff, but they’re not going to look at or like legacy. They’re not going to care so much about themselves dying prematurely. First of all, they’re very optimistic, that won’t happen so soon. So the less if they hear the word life insurance, they will be I don’t need that. But if you if you change the word and say, Oh, do you need an income replacement for if you’re sick? You’re like, oh, yeah, I do need that just in case I’m sick. Because they, they need to take care of their parents to some extent in Asia at least. And they’re less likely to have as many kids. So they do understand these life choices mean that they’re going to be responsible for themselves. But they’re not going to think about anything more than that, at least for the next three to five years.
Michael Waitze 14:14
So this is for everybody, because you bring up a really important point, right? For those people that know me well, you know, I’ve been in Asia since 1990. So more than 30 years and this idea of taking care of your parents, it’s a day to day thought that people have and it doesn’t matter if it’s your grandparents, right or so your kids, grandparents or your parents or even those kids when they’re young. The cultural idea of mom and dad are gonna need your help. And 25 years is real people talk about it. But when insurance gets sold, at least in my experience, it’s for you. And I’m curious, and this is for everybody, right so anybody can jump in and answer this including Latin men. Yeah. But what kind of products do we see that are sort of like intergenerational to those products exists where I can buy Insurance, specifically for my mom and dad or from my grandparents or from my auntie or my uncle? Does that make sense? Right so that I can kind of take some of that burden off? Because right now what I see is my friends are saying, sitting down with their parents and having a conversation, Dad, you need to have better medical insurance. We’re dead. Do you have life insurance? And the dad is just like, look, I’m 75. It doesn’t matter kind of thing. But for the kids, it’s a real worry, right? Anybody can answer.
Eddy Wong 15:27
Mike, before we get into that there’s some issues element about insurable interest.
Michael Waitze 15:32
I understand that. That’s why I’m asking the question. Go ahead.
Eddy Wong 15:35
Definitely we can, if you are financially responsible, we should buy life insurance. In case if anything untoward happened to us, you know, at least our loved one get protected with some financial assurance, or worse, the problem with the older generations is that, you know, there will be a lot of exclusion, because they have some sickness and all that stuff. So it may create a problem with affordability with some of the medical insurance for the older folks. So those are the challenges that we see in the current market play becomes unaffordable for them. And the question is that how we, what we can do as InsurTech player, do the right intervention with the right data and analytics to help make those medical insurance for older folks a lot more affordable. That’s how I see it. Right. So what we can do,
Michael Waitze 16:22
But isn’t there a literacy question into an inclusion question? For the younger generation? Right, which was the genesis of this question, which was, if I’m a 25 year old, it’s likely that my parents are 50. Right? It’s not unusual for a 25 year olds to have kids that are now 25. Right? So when can we start teaching this generation today? To encourage their parents not when they’re in their 70s? Right, but when they’re in their 50s and 40s, to start getting better coverage, so that 30 years down the line, a thing that nobody thinks is gonna happen, is definitely going to happen. But is that insured?
Eddy Wong 16:57
The way I see it, this is exactly what all the regulators across the region are trying to do. Right? They’re trying to drive financial inclusivity financial literacy. As part of the law in Malaysia, they just issued a digital insurance, takaful operator, discussion paper, specifically, in that paper, they talk about financial inclusion, and financial inclusion is not just about the 40. This is like all segments, they talk about financial literacy and stuff like that. So for all InsurTech players coming into, you know, that regulatory framework will have to be seen as driving some of this objective. I’m sure that many in Hong Kong, is this the same? Right? Can you know, in Singapore?
Lapman Lee 17:37
Yeah. And I think in Hong Kong directly, it’s also balancing their role in market development versus regulation. And they have also set up their work in groups to promote the image of the insurance industry, but also the part you talked about the financial literacy. So I think every regulator is working on a number of areas.
Michael Waitze 17:57
Cherie, did you want to say something looks like you wanted to jump in before? Go ahead?
Cherie Wang 18:02
I think the one thing that I’ve seen a lot of impact on is the papers. So the general media, which all the people have consumed, and that has had a lot of effect on literacy, because at least for Singapore, there are fewer media outlets. So it’s a lot easier to control that. But that movement to educate people on a national level really shows over the last decade that people are now understanding Oh, insurance is not a taboo. It’s just another financial tool. And I now understand how this tool works. It’s less of a scam. It’s never been a scan. It’s just the way it’s been sold, has been problematic. But now that people understand the product better, they’re like, oh, yeah, it is useful to me. But for some older folks, they’ll be like, I’m a little too late. Because what like what Eddie said insurability. And that’s on the insurance to figure it out with the with the statistics and tutorials, right? But from a literacy standpoint, people are really a lot better, at least 100% From what I see in Singapore and in Malaysia, Hong Kong is more hit than these two countries, in my opinion, from my experience, and simply because aging population is a real thing. And because you are so responsible for your parents being so educated, and with the media, on papers that your parents are reading and telling, telling them that hey, you you need to be protected for medical expenses that could be X amount of dollars, they will think about that topic as a more approachable one. Now, now that it’s spoken out loud in public.
Michael Waitze 19:38
I want to jump to a slightly different topic. And for those of us that have been in the financial world for the last 30 years, I look at investment cycles, and I tried to figure out where we are in particular investment cycles. And for those that have been following insurance and InsurTech for a while you’ve seen in 2021 I think was the most money that’s ever been invested in in InsurTech companies ever and even more than 2018 and 2019 combined We can cite the study that did that later. But Lapman maybe you want to talk about this, frankly, with both hats on, to be fair, and talk about if you think that there’s going to be consolidation in the market, are we at that stage where I think Cherie said this earlier, you insurtechs have picked a place in the value chain where they think they can add value. But now they want to combine or work together with other companies and kind of build that whole value chain together. And maybe you think that there’s going to be some consolidation and some m&a going on in this space.
Lapman Lee 20:35
So you’re right. I think 2021 was definitely a record year in terms of InsurTech funding going into both the companies that improve that look at value chain innovation, but also the newer digital business models. So yeah, I think you’ve seen that drive into those two. The investments year to date is this year has been a bit more subdued for various reasons. I think it’s also interesting to look at some of the IPOs and specs that went on, I think there are I know, at least in 2021, there were four, so the likes of Waterdrop, Oscar, and others and in 2020, and there were more there were like around eight Lemonade. Roots, many of them haven’t fared so well, on the back of that time, there was a low interest rate environment. So that was very helpful. I think what is alls means to me is many investors are looking to consolidate some of these InsurTech and investments. I mean, we’re seeing that for us here in Hong Kong as well with mainland China, different InsurTech firms are working together, for example, where one might be stronger in customer facing front office technology, whereas another one might be stronger in back offices, they work together to go to market quicker instead of developing things on their own. So more of a collaborative cross border play now. And I’m hoping, of course, that that’s not just Greater Bay Area, mainland China, Hong Kong, but also with other places in Asia. And obviously, some of the Chinese players are also heavily investing in Southeast Asia. Definitely, to answer your question, I think there will be more consolidation also as a necessity, because otherwise you won’t survive as your market cap drops as well. And people are looking for an exit.
Michael Waitze 22:22
Do you want to talk at all about how SPACs and why SPACs get used. And you can make it specific to the insurance and InsurTech industry if you’d like but just what the reason is that somebody would use a special purpose acquisition company to list either in Australia or on the New York Stock Exchange or on NASDAQ as opposed to just doing a straight listing themselves.
Lapman Lee 22:44
Right, I think the answer that I would give maybe a year ago, and now will be different, because right now, that regulatory arbitrage, so to say between regulators, has changed. For example, both Hong Kong and Singapore allow companies including InsurTechs to to go to list through SPACs to deSPACs, there have been more of these investor protection measures put in. So I think now, net net, the benefit is not as significant as before. Of course, before you hear people say I go through a SPACs, it’s quicker, etc. But regulators look more at it from a balanced view as in Wait, what about our investors? What are the various risk? I think many of those I don’t want to say loopholes have been closed now. So now, to me, it doesn’t matter that much.
Michael Waitze 23:36
It doesn’t, but I think you’re right and would have been different a year ago, and I just wrote down this note these investor protection measures because one of the things that a SPAC allowed you to do was kind of I will call it a loophole, but to bypass some of the listing requirements that were necessary to make sure that your company could properly list on accepted exchanges. Just as a reminder as Theresa said before, ITC Asia is June seventh through ninth in Singapore. If you’ve not purchased your ticket yet, you can use the Asia InsurTech podcast discount code as well. “AIP” to get 20% off. And I really want to thank Cherie Wang, the co founder of Planner Bee, Eddy Wong, co founder and CEO of Vsure.life and Lapman Le, FinTech association of Hong Kong and professor at Hong Kong Polytechnic University. You were all awesome.