MoneySmart's Insurance White Paper 2021

SINGAPORE,Sept. 16,2021 -- Leading personal finance comparison site,MoneySmart,has consumer insights that indicate the potential for insurance companies in Singapore to better customer experiences through a balanced approach towards digital innovation and human interaction. Its recently completed survey research,which culminated in a white paper made available for download,points towards customers embracing the ease and convenience of digital self-serve channels whilst still desiring the trust and assurance that comes via a financial advisor. MoneySmart believes these insights will help inform how the insurance sector can navigate its digitisation strategies,and tailor personalised experiences that achieve the "Bots vs Bodies" equilibrium customers desire.

The insurance industry at large is in the midst of a digital evolution of its own,as it pivots away from legacy business practices that have long been rooted in the personal relationship between customers and advisors. This was made more urgent due to COVID-19 restrictions that started in 2020,which forced many insurers towards digital transformation out of sheer necessity. Restrictions that limited face-to-face interaction,coupled with the proliferation of digital services like chat bots,message services,self-serve portals and video conferencing,introduced new experiences that customers have become accustomed to.

Yet amidst this evolution,which hinted at the decreasing need for human interactions with advisors,were customers that still desired the nuances of a trusted advisor servicing their insurance needs at different points on their journey. Policy holders across various insurance products spoke of the efficiency and convenience that digital self-serve options provided,but always referenced human interactions with advisors that gave them higher levels of trust and satisfaction. Where then does the balance lie,and what would result in the best customer experience insurers can provide? MoneySmart's Insurance White paper2021 takes a closer look,and deep dives into 4 insurance products that represent varying levels of perceived complexity:

Car insurance

Critical illness insurance

Home content insurance

Hospitalization insurance

Key Takeaways from MoneySmart's Insurance White Paper 2021

Shopping for an insurance policy:Customers use a combination of digital and human resources to educate themselves on what to buy. Educational insurance content on how to choose the best policy for themselves is key. People first do their initial "shopping" on insurers' web pages or financial aggregators,then validate that information through friends/family or advisors they trust.

Buying an insurance policy:The convenience of online applications and purchase appeals to customers,yet these channels currently do not entirely address informational needs or gaps in trust especially when purchasing more complex products. A cross-check with a trusted advisor or friends/family is almost always necessary in getting customers across the line.

Claiming against an insurance policy:More customers go through their advisors to make claims compared to self-serve options that enable them to submit claims themselves at present. This points towards the need for reassurance that their claims were being processed correctly and prioritised with the help of an advisor facilitating the process like a "friend on the inside".

Bots are getting "hired",but are the bodies getting fired?

The future of many industries including insurance,as touted by some,suggests that digital innovation and it's increasing accessibility will negate most of the need for actual human services eventually. However,research has revealed that as the levels of perceived complexity increased,so did the perceived need for an advisor to assist and guide the process.

Customers of insurance policies typically displayed higher levels of satisfaction and reliance on advisor assistance when they perceived the stakes / risks to be higher. Of those surveyed,91% cited overall satisfaction when using advisor assisted insurance purchases.

The people have spoken,but how should the industry respond?

As the age of digitisation forges ahead with new innovations within the insurance and digital financial services sectors,research also points to the need to pause and take stock of where the intersections lie.

The nuances of human interaction in the insurance purchase journey are still of tremendous value in the eyes of the customer,and need to be integrated into the digitisation efforts of the industry. The ease and convenience of digital self-serve channels do not outweigh the customer's desire for trust,assurance and accountability through an advisor,at least not yet.

As a personal finance aggregator,MoneySmart stands at the cusp of this transformation remembering that a personalised "phygital" journey (physical and digital) is what we must strive towards. And in doing so,our customers are given what they really want - a digital insurance experience where "bots" get the job done,while "bodies" help them get through it.

Download the full white paper here.

Footnotes:

Insights cited in this document are taken from the MoneySmart Insurance White Paper 2021,unless otherwise stated:

91% - Overall satisfaction with advisor assisted insurance purchases.

86% - Overall satisfaction with online self-serve insurance purchases.

When gathering information initially,and educating themselves on the basics,customers turned to financial aggregators (77%) / insurer websites (56%) / social media (27%) to fill their knowledge gaps,but still turned to human interactions to fully validate their assumptions (50%).

Purchases of insurance products via digital options which as self serve offer perks of convenience,speed and overall ease of use. However it does also generate uncertainty amongst customers of whom 24% found it too confusing to choose insurance products by themselves.

The subtle human nuances of an advisor assisted purchase experience attracts customers towards these interactions with 40% of respondents expressing a "greater feeling of assurance" and 36% saying they "get more personalised experiences".

The current state of self-serve options when submitting a claim are perceived to be too complex and lengthy,with the risk of customer error that may jeopardize a successful outcome. 65% of respondents choose to submit claims via an advisor. Even when the level of claims submission was believed to be simple,customers didn't overwhelmingly prefer it to advisor assistance due to the accountability they can expect from advisors with 45% of them attributing claims success to their involvement.