The digital revolution is taking the world’s industries and economies by storm. What are its effects on Myanmar and the local insurance industry? How will the industry value chain as we know it be transformed – from product development and distribution to customer experience?
‘Digital disruption’ is an oft-used term that has popped up in the last decade, as a result of emerging digital technologies and business models that have disrupted existing processes in economies and industries all over the world.
ဒစ်ဂျစ်တယ်နည်းပညာများ တိုးတက်လာမှု နှင့် စီးပွားရေးပုံစံအသစ်များသည် ကမ္ဘာအနှံ့ရှိ စီးပွားရေးလုပ်ငန်းများနှင့် စက်မှုလုပ်ငန်းများ၏ ရှိရင်းစွဲ လုပ်ငန်းဆောင်ရွက်ပုံများ နှင့် ပုံမှန် လုပ်ငန်းဖြစ်စဉ်များအပေါ်တွင် သက်ရောက်မှုရှိခဲ့ခြင်းကြောင့် လွန်ခဲ့သည့် ဆယ်စုနှစ်အတွင်း “ဒစ်ဂျစ်တယ် နည်းပညာ အတားအဆီး (Digital Disruption)” ဟူသော ဝေါဟာရကို မကြာခဏ အသုံးပြုလာကြပါသည်။
With the power to displace jobs and livelihoods, digital disruption is a double-edged sword. A McKinsey report  predicts that up to 800 million workers could be replaced in 42 countries due to disruptive technologies. But on the flip side, it also holds tremendous potential to transform industries, products, and services to become more effective, efficient, and engaging. In the wake of the COVID-19 pandemic, it has accelerated the move to digital technologies at an even more urgent rate.
In Myanmar, the effects of digital technologies transforming businesses and lives take on a slightly different angle. Considering the maturity of Myanmar’s economy, mobile-related indicators are on-par with or leading the APAC region with smartphone penetration at 90%  and mobile broadband penetration at 105%. This has led experts to term Myanmar as a country of “digital natives”–a term used to describe a group of people who have grown up in a digital culture .
What does this mean for the insurance industry in Myanmar?
Around the world, it has been largely acknowledged that the insurance industry has been relatively slower than other industries to feel the full force of digital transformation. A McKinsey report  attributes this to regulation, large in-force books and the fact that newcomers seldom have the capital needed to take insurance risk on to their balance sheets.
Being relatively new, Myanmar’s fledgling insurance industry does not inherit the problems of other global industry heavyweights such as having to deal with legacy systems or changing long-entrenched cultures. The backdrop of digital transformation and its arsenal of new technologies gives rise to many opportunities that local insurance players can take advantage of. On the flip side, it challenges Myanmar’s insurance players to be innovative, bold, and to invent new digitally-lead strategies to meet expectations of a new generation of customer who are more digitally-savvy, technologically advanced and educated than before.
#1 Using Digital Tools to Understand Your Customer and Develop Products For Them
At the beginning of the value chain is product development. Currently, the insurance market in Myanmar is still experiencing low insurance penetration and awareness. Therefore, products should be designed and deployed in a way that is simple, useful, and easy to understand.
To do this, we need to know our customers well. Local insurance players are tapping on data analytics tools to get deeper insights on key market segments, customer behaviour and creating customised products for various customer segments. This data can reveal behaviour patterns, common demographics and characteristics, so insurers know who their customers are, what products would best suit them, and how to target marketing efforts.
Already, industry players worldwide are looking at using new data sources and advanced analytics to identify the next-best product for each customer. For instance, smart wearable devices such as fitness and health trackers track physical activity and vital signs which allows insurers to incorporate this data into pricing life insurance policies based on the lifestyle of the applicant.
The idea is to tap on devices with high usage frequency to obtain insights about your customer. For Myanmar, high smartphone penetration coupled with rising social media use have the potential to be a valuable data source, as digital identities are now a norm. Insurers could use this data to prepopulate information about prospective clients, making the application and onboarding processes quicker and easier, hence appealing to a growing segment of consumers who demand seamless digital experiences.
#2 More Ways To Connect And Engage With Your Customer
With high mobile penetration in Myanmar, digital and mobile-based platforms will have significant growth potential in capturing and enhancing customer relationships.
Insurance organisations can use digital platforms and tools to create and distribute simplified, digital-native products, and raise consumer awareness and knowledge. This is done by combining insurance products with broader advice on financial wellness and protection. Digital connectivity can therefore be a gateway to becoming more relevant in the everyday lives of our key customer segments.
On the distribution front, building out digital distribution capabilities would meet the growing demand for digital purchasing options–a need that has been accelerated by the COVID-19 pandemic.
Most consumers are familiar with digital distribution in other sectors, like retail, and increasingly expect the same flexibility, performance, and personalisation. The shift in online consumer behaviour in Myanmar was also spurred by the worldwide pandemic, with online shopping retailers reporting a 50% increase in shopping orders .
For the insurance industry, it is no different. Putting the user at the heart of the customer experience will be vital to shaping distribution models. Being a “People First” organisation, we always prioritise the needs and safety of our customers, especially in a vulnerable time like the COVID-19 pandemic. Hence, we are accelerating the digitalisation of the customer journey to respond better to our customer’s needs. Digitalisation of processes end-to-end without disengaging the “human touch” in the advisory role of life insurance purchase is very crucial. In nascent markets like Myanmar, the human touch is even more relevant as customers need the education before purchase and “total automation” is not the solution.
At Dai-ichi Life Insurance Myanmar, the end-to-end process from sales to policy issuance is built to enable our advisors to serve customers with ease and convenience for both parties. Customers experience a seamless hassle-free sales process while the advisor enjoys greater effectiveness and higher productivity with the digital enablement. The use of mobile devices during advisory interactions makes it fast and secure with the seamless process built in.
Before the pandemic, the Dai-ichi Life Insurance Myanmar team was already well-equipped with digital tools and skills, but COVID-19 accelerated the frequency and intensity of its use. Video conference calls are a regular occurrence in place of face-to-face meetings and we were also able to recently launch a successful recruitment webinar, Powerful Possibilities with Dai-ichi Life over Facebook Live which replaces traditional face-to-face events to engage potential sales advisors.
#3 Simplifying And Automating Processes
The insurance underwriting process is usually complex and can be a tedious process for the consumer. Potential to improve this comes in the form of machine learning and A.I., and it can kickstart with simple tools like chatbots and virtual digital assistants.
By tapping on alternative data sources, insurers can prefill, validate or gather customer information in an automated fashion. This drastically simplifies the underwriting process and could improve the customer’s buying experience, as well as add further precision to underwriting.
Additionally, the claims process is also an integral part of the overall insurance experience and automating that process will lead to higher customer satisfaction. Data-driven claims management can improve payout accuracy, overall efficiency and customer experience.
For Dai-ichi Life Insurance Myanmar, we are seeing a younger customer base around the median age of 28.5. We recognise the importance of technology as a key enabler in servicing our customers. To that end, we are exploring the integration and use of social media platforms to carry out policy-related transactions. Younger, tech-savvy customers would be more receptive to this approach, and it would also come in handy during the pandemic where face-to-face interactions are discouraged.
Investment in technology is critical, alongside building a framework for digital channels that can enable effective distribution of our products, to provide our customers with quality service.
Nothing to fear, much to gain
As change accelerates in Myanmar and worldwide, organisations with an agile culture and operating model need to keep up with innovation and shifting consumer demands. We see instances of innovation in new models where policy terms are linked with data from emerging technologies. One example is telematics, where cars equipped with monitoring devices measure various indicators such as data on speed, location, accidents, and more, which is all monitored and processed with analytics software to determine your policy premium .
With that being said, there are also challenges and uncertainty that come with the trend of digital transformation, especially in the context of data collection and usage. The level of innovation carries a greater risk of sensitive data being lost, misused or stolen. Insurers must be careful not to infringe on customer data privacy or violate rules around compliance. However, the benefits of digital transformation far outweigh the risks—risks which can and should be responsibly managed.
If companies and industries want to harness the power of digital transformation, an agile and collaborative mindset should also be inculcated together with the adoption of new technologies. To model the change they wish to see, leaders in the insurance industry must demonstrate a commitment to innovation, creativity and digitally-inclined proficiencies. Programmes to upskill and reskill employees to empower them to acquire innovative skill sets should also be in place. As the bar rises across industries to create a user-focused and customer-centric experience, insurance leaders should not be playing catch-up but instead, transforming in line with a constantly evolving and digitally-savvy marketplace.
Daw Zarchi Tin
Chief Executive Officer