By Michael F. Rellosa
THE last trimester of the year is a busy one for those of us who are working to tech up the insurance industry. Unlike the banks and other financial institutions which had a head start, we in the insurance community are playing catch-up.
Come Oct. 17, 2022, the Department of Trade and Industry, in collaboration with the Monetary Authority of Singapore, will be launching the Philippine Fintech Festival back to back with the SME Financial Empowerment Program. The Philippine Fintech Festival kickstarts the Asean-wide Fintech Month, followed by similar activities in Cambodia (October 24) and Thailand (October 27), culminating with the Annual Singapore Fintech Festival in November.
With the moves to put Asean economic integration front and center after being placed in the back burner due to the pandemic and other geopolitical events, there is a renewed impetus to bring it to the desired conclusion (i.e., a free flow of people, goods and services across the Asean). With technology as an identified enabler, this dream is closer to reality. One of the main proponents of this integration is the Asean Insurance Council, which will be meeting in December where technology as an enabler and a driver for the sector will be discussed. The AIC recognizes that the region has a combined population of 600 million, and an economy worth at least $3 trillion making it the fourth largest economy in the world.
The Philippine Insurers and Reinsurers Association (PIRA), a member of the AIC and an active participant in the insuretech scene in the Philippines, shares the vision of teching up the industry at the soonest possible time. As innovative technologies make themselves available, PIRA is at the forefront of introducing them to its members and through its IT committee familiarizes itself and vets these recent technologies for adoption of its members.
PIRA has identified major areas of operations which have been positively impacted by new technology.
Communications and data storage. Instant messaging apps, as well as the ability to access voluminous files and data in a safe environment, allowed our members to operate efficiently throughout the pandemic and its attendant lockdowns. Services to the insuring public continued with minimal disruptions.
Electronic money transfer. Another area that developed at warp speed in part because of the pandemic. It gave both insurers and the public multiple ways of paying and remitting sums electronically with convenience.
Underwriting and claims. New ways of risk assessment are fast developing again due to technology. Motor vehicles can now be rated not only based on use, age and where they are parked. Now they can be rated as to how they are operated and the area in which they operate. The same technology akin to an aircraft black box records important data such as velocity, time of impact, GPS- assisted location identification, just to name a few. This aids the claims process tremendously and shortens the period in which claims may be settled. This also makes pay-as-you-use insurance available, a welcome development for car users who are not on the road 24/7. For other classes of business, drone or even satellite technology helps with the determination of the cause, extent and quantum of the claim, a boon for both indemnity and parametric-based types of coverage.
Training, meetings, conventions and forums. Living in an archipelagic country, one is hard pressed to visit and be in contact with the various stakeholders across the country. In a business where intermediaries are necessary, provincial intermediaries must be visited and consulted as well as kept abreast of new products, new methodologies, industry and corporate developments. Technology now allows us to communicate real-time, albeit virtually.
Distribution channels. The pandemic has hastened the use of and acceptance of purchasing goods and services online. The proliferation of comparative sites helps the insuring public in picking out the insurance company with the best fit in terms of coverage and price. It likewise proved itself to be a great platform for educating the public on the finer attributes of a certain product. Chatbots can answer the most basic and frequent questions, thereby reducing, if not eliminating, the need for a human to be at the other end.
There are yet numerous other applications that one can find to help simplify and increase the efficiencies of the insurance cycle, which we are just starting to realize and discover. What we do know for certain is that technology if harnessed correctly will revolutionize how we serve the insuring public.