The effect of Covid-19 on the economy has been nothing short of devastating and the road to recovery will be difficult. Yet, the private business sector has recognized the need to innovate and evolve in order to adapt to the “new normal”.
One of the industries that have geared up to be able to respond to the pandemic effectively is insurance.
Though demand for some life insurance riders like travel insurance is on the decline because of the pandemic’s effects on the tourism industry, the threat of Covid-19 to the lives of working Filipinos more than underlines the importance of life insurance and other non-life insurance products.
Deputy Insurance Commissioner Ferdinand George A. Florendo of the Insurance Commission (IC) shared that the life insurance industry is ready to absorb potential claims brought forth by Covid-19 – particularly now that the testing capacity of our healthcare network has expanded with the greater availability of testing. He states that, to date, life insurance companies authorized to do business in the Philippines are adequately capitalized considering all have complied with the P900M (USD 18 Million) net worth requirement set forth by the IC.
Embracing digital technology
Commissioner Florendo adds that insurance companies have also begun to evolve with the times by upgrading to e-commerce or enhancing their existing e-commerce policies and procedures, given the impediments brought forth by face-to-face selling. He explains: “Embracing digital technology is inevitable as we are now living in the Age of Data and Information. While this may require a huge amount of capital investment, it will be more economical in the long run when compared to maintaining traditional business methods. This will be a game-changer as it will affect in a good way the insurance value chain. It will affect, among others, the selling of insurance products, issuance of a policy, and payment of premium down to the claims settlement.”
In addition, he says embracing digital technology will help companies broaden their market share as they reach more customers using digital platforms such as Facebook, Instagram, LinkedIn, and other social media applications.
Like other industries, insurance companies could offer new products that were not previously possible in traditional operations through dynamic pricing of products and integrating insurance with products offered online.
Florendo states that since technology is a game-changer for data-dependent industries such as insurance, companies like Singlife Philippines will enjoy an advantage in both cost and market reach. The Commissioner says that as a prime mover in the full use of insurance, many people – including those who have opened up to digital channels since the start of the pandemic – will respond positively to Singlife Philippines. Apart from the ease in transaction, its data analytics allows for faster decision-making, dynamic insurance pricing, and suitability of products.
Singlife Philippines is backed by Singapore Life Private Ltd., a company with strong digital capabilities. Singlife Philippines is a majority-owned subsidiary of Singlife (65%) with partners Di-Firm (20%) and Aboitiz Equity Ventures (15%). The company’s purpose is to unlock the potential of money for everyone by offering innovative tools and solutions that help people become confident and in control of their finances.
Florendo assures that with the digitization of the insurance industry, IC is not only expanding its human resource but is also shifting its supervision to ensure that the welfare and experience of both customers and clients of digital insurance are seamless.
Shifting to digital
Even prior to the ECQ, the IC has been working with the University of the Philippines to develop a database system that aims to convert the submission process of the IC-regulated entities from a paper-based submission into a digital online submission. This will be put into a singular IT system capable of analysis and reports generation.
Since two years ago, the IC likewise has started issuing Circulars in relation to online selling and the use of digital platforms. Florendo also assures buyers of insurance via the digital platform that mechanisms are in place to ensure transparency; fair and sound market conduct; and, data privacy and security.
The Covid-19 pandemic has exposed the life insurance industry to certain obstacles as it primarily employs traditional face to face methods as a business model. But in the era of the “new normal” where modern digital technological innovation has become a necessity for industries like life insurance, no one does it better than Singlife Philippines.