Tharman Shanmugaratnam: The evolving role of insurance in
Singapore
Speech by Mr Tharman Shanmugaratnam, Chairman of the Monetary Authority of Singapore, at
the Launch of Prudential's New Office, Singapore, 7 November 2017.
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Mr Mike Wells, Group CEO, Prudential PLC
Mr Kai Nargolwala, Chairman, Prudential Corporation Asia
Mr Nic Nicandrou, CEO, Prudential Corporation Asia
Mr Wilf Blackburn, CEO, Prudential Assurance Company Singapore
Ladies and Gentlemen
1. Thank you for inviting me to join you. Let me begin by congratulating Prudential on the
opening of its new office at Marina One.
2. It is another milestone in Prudential's long journey with Singapore, having started out as an
agent for fire insurance in Singapore in 1924, and opening its first full branch in 1931. Its first life
policy, issued to a Percy Robert Campbell, was a 15-year policy which would mature for the sum
of $6190. Today, Prudential serves over 900,000 customers here, and the average maturity value
of a Prudential life insurance policy in Singapore is just over S$50,000.
3. Prudential has indeed grown with Singapore. Its total sum assured in Singapore has grown
to S$147 billion in 2016, and it currently employs over a thousand staff and works with more than
4500 financial consultants.
Opportunity in Asia's Demographic and Digital Transitions
4. Prudential, as with its counterparts in the life insurance industry, is increasingly focused on
deepening its footprint in Asia. The opportunities are immense, and the basic reasons for this are
well recognised.
5. Asia is experiencing momentous demographic change. It will be home to 60% of those aged
over 65 worldwide by 2030, with countries in East Asia leading the way. This will place great
demands on healthcare and retirement solutions, beyond the universal or mandatory schemes
that governments put in place in many countries.
6. In the other parts of Asia where populations are still youthful - such as India and parts of
ASEAN - insurance penetration remains low and has huge potential to grow.
7. Equally important, Asia is rapidly digitising. 330 million people bought insurance products
online in China in 2016. In Singapore, a few of the bigger life insurers have offered online life
insurance purchase for some products and two fully online life insurers have emerged over the
past two years.
Enabling Customers through Digital Solutions
8. Insurers can and must take advantage of the digital wave. In particular,
there is significant
scope for health insurance to venture beyond paying for medical claims post-affliction, to
preventive care and to encourage a healthy lifestyle and habits.
Health insurers are already beginning to track users' health and habits through fitness
devices and apps, and are pricing in premium discounts for healthier habits. The top five life
insurers in Singapore, including Prudential, have unveiled programmes to support healthier
living and habits by their clients.
Healthcare itself can be delivered and administered more effectively, and insurers should
encourage this.
Tele-health is increasingly being used, saving patients time and convenience. The
telehealth market in Asia Pacific is expected to grow by 12 per cent annually to reach
US$1.8 billion in 2020.
In Singapore, we have been rolling out TeleRehab services for stroke patients. It delivers
better health outcomes because doctors can monitor patients and make sure they
follow-through on rehabilitation without the inconvenience of regular physical travel to the
clinic.
In the US, Kaiser - a major healthcare provider in California - already has more than
half of its consultations through tele-health, and insurers have begun to accept
telehealth claims.
iv. In Singapore, the first tele-health trial by an insurer was launched last year, enabling
policy-holders at risk of heart problems to be monitored remotely so that abnormalities
can be picked up in time, and issues detected before they become critical. I encourage
insurers to partner with healthcare providers and research centres to test such
applications and support the implementation of Smart Health platforms. It supports an
important paradigm shift towards preventive and sustainable healthcare management
for policy-holders.
9. There is opportunity for insurers to go digital in other ways too.
At the front end: It is frequently remarked within the insurance industry that an insurer
interacts with its clients just once or twice a year- for signing, renewals and claims. Apps
and social media present insurers with more touchpoints to understand and engage their
clients. Telematics and IOT (internet of things) devices enable data analytics, allowing the
insurer to deliver more customised and innovative products and services.
At the backend, the life insurance industry is beginning to pilot smart claims - the use of
artificial intelligence and blockchain enables them to automatically trigger and settle claims. It
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will mean vastly faster settlement of claims, and the better service that customers in Asia
will come to expect.
10. Life insurers in the region are also teaming up with fintechs, or establishing dedicated
innovation labs of their own. We have five such innovation labs helmed by life insurers in
Singapore. Other insurers collaborate with fintechs to co-develop solutions - as Prudential has
done with its Pru-Fintegrate Programme. These are often focused on digital distribution,
achieving customer centricity, as well as testing IOT devices and solutions.
From Insurance Agents to Trusted Advisors
11. At the end of the day, the digital transformation will also transform the jobs of insurance
agents or financial consultants. As technology is applied to more tasks within the insurance value
chain, some adjustment, re-skilling, and re-scoping of roles will be necessary. Agents, freed from
repetitive processing and queries, will be able to focus on a deeper understanding of the financial
needs of the customer.
12. Prudential Singapore has begun this transformation, equipping their financial consultants
with its cognitive chatbot askPru since August 2017. (askPRU instantly retrieves information
about a customer's policy and status of submitted claims, amongst other details, enabling
financial consultants to respond to their customers faster.) askPRU is also expected to reduce
call volumes at its contact centre by 30 per cent, freeing up call centre staff to assist customers
and consultants with more complex queries. Financial consultants are also equipped with
PRUONE Express, a digital point-of-sale portal which uses fingerprint authentication by agents,
and SmartData Capture and is able to generate a detailed quotation within three seconds,
enabling agents to discuss and assess possible protection plans with their clients on the spot.
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Ultimately, the role of the insurance agent will continue to evolve: from selling
standalone life or health insurance products, to more holistic wealth and risk
Given the growing
management advice, and in essence to being a truly trusted advisor.
demand for risk management and compliance related roles in the industry, I also encourage
insurers to consider reskilling some of their agents to take on such roles.
14. Prudential's new office, which is designed to promote maximum mobility, productivity,
innovation and healthy living amongst its employees, echoes the aspirations of Asia's insurance
consumers. It will continue to play an important role in meeting the protection needs of the next
generation of Asia's consumers. Once again, my warmest congratulations to Prudential on the
opening of its new office.
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The global record for a fastest insurance claim was set in December last year by renter's insurance start-up
Lemonade's artificial intelligence Jim in the US, which settled a claim for the theft of a US$979 parka within 3
seconds. Within that time, Jim reviewed the claim, cross-referenced it with the policy, ran 18 fraud-detection
algorithms, approved it, sent wiring instructions to the bank and notified the policyholder of the claim payment.
The average claim payout in the US is about 30-45 days.