October 21, 2021

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

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By Chilman Jain, Principal, BCG – Prateek Roongta, Managing Director and Partner, BCG – Pranay Mehrotra, Managing Director and Senior Partner, BCG

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, while addressing 60+
CXOs from Sri Lanka’s insurance industry, explained what being ‘bionic’ means and
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.

Pallavi further discussed the five archetypes
within which distinguished bionic players fall – i) Sales digitizers, ii) Data
players, iii) Operations optimizers, iv) Innovators, and v) 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. 

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.

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

  • 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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