Insurance industry looks at Bionic Insuring in a ‘new normal’

COVID-19 has disrupted most businesses globally and the insurance industry is no exception. Given the restrictions imposed by the pandemic, insurers have been compelled to accelerate their digital journeys and holistically digitize their operations.

In this regard, the Insurance Association of Sri Lanka (IASL) hosted a webinar on ‘What does it mean to be a truly bionic insurance company?’ with Boston Consulting Group (BCG) as its knowledge partner,on 23rd February.  

Prateek Roongta, MD& Partner, BCG facilitated the event and Pallavi Malani, MD& Partner, BCG delivered the keynote presentation, which was followed by a panel discussion comprising Thushara Ranasinghe, MD / CEO of Ceylinco Life Insurance Limited, Sanjeev Jha, MD and CEO of Fairfirst Insurance,and Pranay Mehrotra, MD & Senior Partner, BCG. The panel discussion was moderated by Chilman Jain, Principal, BCG Colombo.

Pallavi Malani of BCG, whileaddressing 60+ CXOs from Sri Lanka’s insurance industry, explained what being ‘bionic’meansand outlined the imperatives for becoming a bionic insurer in the post-COVID-19 world.In order to achieve bionic outcomes, insurers need to integrate human elements with technology and not replace one with another.

“There is a need to empower talent and enhance efficiencies by leveraging the right tech stack and data. However, businesses will still have to engage with new talent pools and create agile teams to effectively make the shift to bionic ways of working”, she said.

Image 1: Combining technology with human to be bionic

Pallavifurther discussed the five archetypes within which distinguished bionic players fall – i)Sales digitizers, ii) Data players, iii) Operations optimizers, iv) Innovators, andv) Digital natives. The discussion was made real with the example of PingAn, the largest Life Insurance company in China. Despite a salesforce of 1.3 million agents, PingAn has a ‘digital attacker agency distribution’ model and boasts of approximately 40% higher productivity than the second largest player in China. It has progressed from leveraging traditional technologies to mobile internet, to now using artificial intelligence (AI) across agent recruitment, training, agent management, sales model, and services. “PingAn has truly been a pioneer in digitizing its entire sales force, at scale,” shared Pallavi. 

Pranay Mehrotra, Managing Director & Senior Partner, BCG emphasized on the need to use data as a differentiator. Data players are creating value by building digital foundations, developing new technology capabilities, implementing use case driven transformation, and improving overall data governance.

Image 2: Five archetypes of bionic seen within players

In his opening remarks, Thushara Ranasinghe, MD/CEO of Ceylinco Life Insurance Limited said, “In 2019, the Sri Lankan insurance industry grew by 10.5% and in 2020, it grew by an estimated 16%. Despite the lockdown, insurers were able to witness steep growth, proving that adversity reveals genius”. He stated that the pandemic took everyone by surprise and rendered all business continuity manuals irrelevant. Nevertheless, Ceylinco was able to quickly adapt to the changing situation and recover from the initial shock by installing proper infrastructure in place.

Sanjeev Jha of FairFirst Insurance said, “COVID-19 has taken away our choice to invest in digital initiatives or data optimization. Bionic is the need of the hour. Insurance companies typically are data intensive and cognizant of risks. Organizations that don’t become digitally sensitive would miss the race.”

In line with this chain of thought, Pranay from BCG emphasized the importance of transforming the agency channel. “COVID-19 is expected to accelerate digitization of the agency channel. Omni channel is expected to be a norm in the future. While it hasn’t happened in the last 12 months, a war for talent is imminent. Digitally evolved companies will be better positioned to capture, share, and create value as opposed to their traditional counterparts,” he said.

When asked about strategic initiatives being undertaken by their organizations, both CEOs had some valuable insights to share. Ceylinco, a company with a primarily physical model was compelled to make the shift to video doctor appointments, organize trainings for customers to make online payments, enable digital platforms, and facilitate remote ways of working. At FairFirst, the focus was on organizational transformation as well as digitization. To achieve this end, the company has adopted agile ways of working and a people strategy that explicitly factors this evolution towards a digital future. In addition, ‘Click to Claim’- an initiative to assess damages in motor accidents, ‘work from home’, fraud analytics,and customer journeys are the focus areas.

In conclusion, Pranay from BCG shared three key steps for insurers to kick-start their bionic journey:

  • Create digitally enabled core processes like sales
  • Create a fund to invest in future-looking business models
  • Begin the cultural shift now as the migration has a long gestation period

The webinar ended on an action-oriented note, with insurers feeling motivated to kickstart the transition from normal to the ‘new normal’. Boston Consulting Group is a premier global management consulting firm founded in 1963. BCG partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities.

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