Reimagining Insurance Services Through Digital Transformation
We live in a world that’s growing more digital by the day thanks to a phenomenon known as digital transformation.
Digital transformation is so much more than a buzzword; it’s a key part of finding success in today’s ultra-competitive business world. Typically defined as a radical rethinking of how a company or organization uses technology, people and processes to fundamentally change business performance, digital transformation is revolutionizing countless industries by helping businesses streamline operations and create more seamless user experiences.
The insurance industry, especially, has become a hotbed for digital innovation. That, however, wasn’t always the case. As noted by Accenture, insurance companies, which have long believed in maintaining a personal touch when it comes to their services, were initially slow to embrace full-scale digital transformation. That changed with the arrival of disruptors like insurtech startups, and with advancements in technologies that made delivering services both faster and cheaper.
Just how much of an impact has digital transformation had on insurance? According to McKinsey, in recent years, the insurance industry’s digital maturity – a measurement of the ability to create value through digital – has outpaced several other key sectors, including the banking and auto industries.
Source: McKinsey&Company (2018), Digital Insurance Forum 2018:Making digital and analytics a reality in insurance . https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/digital-blog/digital-insurance-forum-2018 All rights reserved; as modified by Hanwha.
A Commitment to Innovation
Against this rapidly changing backdrop, Hanwha’s life insurance business, Hanwha Life, has made streamlining its own digital transformation a top priority. The goal is to offer customers a truly seamless experience by digitizing each and every aspect of insurance sales – from browsing and signing up for products online, to purchasing insurance through financial planners.
In addition, over the last few years, the company has been innovating with cutting-edge technologies like blockchain and Big Data to unlock new ways to satisfy customers’ diverse needs. Efforts like these have the power to revolutionize insurance as we know it by paving the way for much more personalized and convenient user experiences.
The company’s embrace of digital transformation has been all-encompassing, and is reflected in the partnerships and innovations listed below.
AI Assessment System
Launched an AI-driven assessment system that streamlines insurance processing by analyzing customers’ claims and instantly approving or denying payouts.
Introduced the industry’s first digital sales channel, which allows individuals to take courses to become licensed financial planners, opening the door for anyone to take part in insurance sales.
Partnered with Seoul National University on blockchain research as part of an effort to develop more advanced digital finance platforms.
Introduced a simple and convenient mobile care service that presents users with a wide variety of information related to their insurance and offers content to help them live healthier lifestyles.
Became the first large Korean insurer to launch a dedicated ‘onsure’ (online + insurance) channel that simplified purchases and offered consumers services that were tailored to their lifestyles.
Now entering its 75th year, Korea’s first life insurer has positioned itself to become a leading provider of digital financial services in major hubs across Asia. Not only have Hanwha Life’s subsidiaries in markets like Vietnam and Indonesia strengthened its foothold overseas, but they’ve also taken bold steps to strengthen the company’s offerings through digital transformation.
In addition to becoming the first Korean insurer to launch operations in Vietnam, Hanwha Life was the first in the market to establish a department dedicated to Big Data analysis. Now, the company is focusing its efforts on developing an online platform that will help expand the availability of its digital financial services.
In Indonesia, Hanwha Life has forged strategic partnerships with the goal of strengthening its online services. The company is also working with the online learning network Docquity to promote its insurance products among local doctors.
Taking the Next Step
Never content to rest on its laurels, Hanwha Life recently announced its intention to pursue digital innovation company-wide, and revamped its organizational structure last June to help accelerate this transition.
Notable adjustments included the decisions to establish offices dedicated to tech strategy and Big Data (among other digitalization-related divisions), and hire talent from tech giants to lead projects related to AI and online-to-offline services.
To learn more about the importance of advancing digital transformation in insurance, Hanwha Newsroom sat down with Hanwha Life’s Managing Director, ChangHee Lee.
What motivated Hanwha Life to accelerate its digital transformation?
When you look back at the last 20 years, every great technological development – from the invention of the internet to the smartphone – has brought dramatic changes in terms of sales methods. Companies that accept and leverage these changes tend to win out.
Time and again, we’ve seen online companies acquire and exceed offline companies. Amazon’s acquisition of the supermarket chain Whole Foods is a good example. I believe changes like these become possible when companies embrace the change that comes with innovation.
So many industries are shifting toward the internet and mobile technologies. Because insurance in general is a long-term product, there seem to be two schools of thought: that the industry won't change, and that because other sectors have changed, it will, too. Life insurance has not yet changed dramatically, but it will soon, and fortune favors the prepared. And that’s why we are advancing our digital transformation.
How has Big Tech’s shift into insurance changed the landscape of this competitive industry?
I think the increased competition will ultimately be helpful. Whereas before we were competing solely with insurance companies, now we’re competing with completely different entities.
In order to succeed in this tightly regulated industry, we need to be capable of adapting quickly. Rather than assuming that change will be difficult, we should truly believe that the industry will change and actively embrace digitalization.
How does Hanwha Life plan to harness digitalization to streamline insurance sales?
While no one in the industry seems to have succeeded in transitioning sales entirely to digital channels, we’ve increased our efficiency in this area by using Big Data to automate processes like evaluations, examinations and payments.
These days, many people are purchasing general insurance, like car insurance, online. They’re recognizing that car insurance is a must-have product, and that they can purchase it affordably online.
Life insurance, on the other hand, is not yet viewed as a must-have product. That will change eventually. As it stands, I don't think that information about life insurance can effectively be explained via digital channels. Taking full advantage of these channels will require us to prepare many things, including content that clearly communicates the benefits of life insurance.
What are some ways that Hanwha Life is reimagining how consumers view life insurance?
Right now, we are working on a project called LIFE Solution, and we’ve also adopted a ‘Holistic Wellness’ philosophy through our LIFEPLUS brand.
Whereas previously, insurance was viewed with a focus on preparing for risks like death or cancer, recently, the industry has pivoted to focusing on insurance from a wellness perspective. Through LIFE Solution, we’re developing products that encourage people to consider what they need to do to live more enriching lives, and offer benefits for investing in your wellness.
Could you provide an example of this type of technology?
Sure: the point-based payment service we developed, which was recently named an innovative financial service by Korea’s Financial Services Commission. Previous savings-type insurance products were relatively simple, and would offer savings in the form of compensation upon expiry.
Using our new point-based process and partnering with a company like E-Mart, Korea’s largest discount retail chain, will allow us to offer customers savings now as opposed to later. We developed this service with a focus on providing benefits – such as discounts in-store and on grocery deliveries – that can enrich the lives of customers with savings-type insurance. We applied to take part in a financial regulatory sandbox program, and we were selected last year.
When it comes to promoting wellness through innovation, the possibilities are endless. For example, we can use Big Data to figure out what consumers want regarding wellness, and we can analyze what they should do to help reduce their risk of developing illnesses like cancer or dementia. We can also make it easier for them to sign up for related products and services.
What do insurers need to do next to help customers reap the full benefits of digital transformation?
We need to continue developing products that help customers in their daily lives – not just products that are helpful once they’ve saved for a long time or when they’ve passed on. We also need to continue developing digital insurance products because selling insurance digitally is more cost-effective than doing so in-person, and the resulting savings can help us offer our customers better service.
Embracing the Power of Change
Like all change, digital transformation is an ongoing process that requires a great deal of effort and commitment.
Over the years, Hanwha Life has made a habit of embracing changes like these and the challenges they present, and has evolved into a stronger, more dynamic company because of it. Digital transformation represents the next step in that evolution – one that will revolutionize how customers manage their insurance, and position Hanwha Life to become a leader in this competitive industry.