How COVID-19 Has Forced Insurers to Rethink Digital

How COVID-19 Has Forced Insurers to Rethink Digital

by May 21, 2020

We’re living in a once in a generation health crisis. Millions of people worldwide have been affected by the coronavirus pandemic, and many have been left jobless and many more will be feeling the impact for several years to come.

Now is the time for institutions and industries to be our heroes and help the societies that have been supporting them for so long. One of the oldest industries on the planet has one of the most important roles to play: keeping our citizens healthy. With a health crisis such as this one, the role of the insurer has never been so relevant.

In a virtual fireside chat, I spoke to Rohit Nambiar, CEO of AXA AFFIN Life Insurance Malaysia where we deep-dived into the impact of COVID-19 on the insurance sector and what the company is doing in response to it.

AXA AFFIN’s Role in Combatting COVID-19

Rohit explains that they have been on the ground since day one, on a national level, AXA AFFIN has done a wide variety of things to combat the crisis from donating to ICUs to launching crowdfunding campaigns to raising funds to buy PPE equipment for our medical frontline. AXA AFFIN is also part of the consortium between Life Insurance Association of Malaysia (LIAM), Persatuan Insurans Am Malaysia (PIAM) and Malaysian Takaful Association (MTA) to provide RM 8 Million fund to widen access to COVID-19 testing.

On the customer’s front, Rohit said that they have teamed up with Naluri, a healthtech firm started by Azran Osman Rani to help provide their customers free 2 weeks mental health care through the app to help them cope with this uniquely difficult situation. Much like other insurers, AXA AFFIN will be providing coverage for any customers affected by COVID-19 and premium deferrals for those who are eligible

The Virus’ Impact on the Insurance Sector

Rohit mentions that one of the main impacts he is seeing on the insurance industry is a large increase in awareness of the importance of having health insurance. Insurance, he says are unfortunately still a very trigger-based purchase, a pandemic like this wakes people up to how important it is to be protected.

He added that insurance is one of the few sectors where customers are looking to increase the value, where 30% of customers are looking to either purchase new products or add more coverage. Sharing data from AXA AFFIN Life, Rohit said that their digital insurance business tripled compared to last year and this year they are looking at double that amount, he attributed it partially to COVID-19 being a catalyst for digital adoption.

They are also seeing higher engagements on their digital platforms to perform a number of things including updating their details, Rohit sees this trend as positive as it will free up the time of insurance agents and enable them to do what they do best — provide service to their customers.

A Complete Reinvention of the Agent Distribution Model

There was a time where insurance agents view the digital distribution model as an existential threat to them. Rohit is of the view that digital technologies will be complementary to agents rather than a threat.

As an example, he shared about their medical card AXA eMedic which can be purchased online within 5 minutes and without medical checkup (I know, I’ve tried). With the price point being as low as RM 37, Rohit jokingly said that the commission was hardly worth it for insurance agents to sell.

This digital channel, instead of acting as a threat to the agents, instead has been a boon, Rohit said that this has acted as a funnel for customers looking to expand their protection plan. This pool of customers were passed on as leads to the agents where they can provide tailored advice on what plan best meets their financial needs.

With MCO, agents have to move their interactions online, insurance agents are able to serve more customers than they were able to before. Instead of looking for parking and getting stuck in Malaysia’s infamous traffic jams, agents can focus their time on interacting with customers instead.

Rohit is of the view that this trend will continue post-MCO. Similar to more advance insurance markets in the world like UK and China, he predicts that advisory channels will still remain the largest contributors to life insurance and commercial insurance sales. He foresees that transactional products like general insurance, motor and simpler products will go fully digital.

He is actively encouraging agents to have a strong digital presence, something Rohit believes could open the door to many new opportunities.

The full video of our fireside chat can be found below if you are interested in even more nuggets of wisdom.