Insurers are competing more on execution than strategy amid AI’s rise, which has made strategic ideas cheap to devise and hard to differentiate, insurance chiefs said at ITC Asia in Singapore.
As AI lowers the costs of building new products, distribution channels, claims processes and revolutionises customer experience, what separates winners will now be execution and whether an insurer can operationalise strategies at scale, and fast.
“What’s moved the needle is not really (that) we launched a new product, but (because) we use execution intelligence,” said Randy Lianggara, President of Emerging Markets in Asia at Sun Life.
Integrating AI into bancassurance and embedded insurance ecosystems has helped Sun Life Malaysia grow more than 50% this year, Lianggara added. The insurer is focused on further building its “execution infrastructure”, investing in its operational backbone that it can build and scale, its “middle layer” between Sun Life and distribution partners, and frontline distribution, where AI is integrated in product sales.
“Strategy, we can replicate, technology, we can buy, and the product, we can copy,” Lianggara said during a Wednesday (July 1) plenary session on strategic growth and market expansion. “But the execution engine, capability, delivered consistently — (that) cannot be replicated.”
Execution has become equally critical in embedded insurance partnerships, said Vinay Surana, Regional Managing Director Asia Pacific for Middle East and Africa at Allianz Partners during the Wednesday plenary.
“Partnerships are as good as the execution that we can deliver on the back of that partnership,” Surana said. “It’s great to have a great strategy on a PowerPoint slide, lovely launching programs and events to launch a partnership, but if you can’t execute, it will go nowhere.”
He added that carriers will need to create mutual value to participants in the ecosystem — the customer, embedded insurance partners, and the insurer.
“Partnerships cannot just stay stagnant and rigid; they need to evolve,” Surana added. “They need to evolve and respond to the ever-changing needs of the customer, of the regulatory environment, and the framework we work in.”
“Complete disruption”
The growing importance of execution reflects how quickly AI is allowing challengers to close capability gaps with established insurers.
Arshdeep Kaumi, Country Manager and CEO at Generali Thailand, described the pace of change as a “complete disruption”, warning that competitors can now replicate market-leading service standards in a matter of months rather than years.
“A challenger can properly come up with service standards beating the leader of the market, and they don’t have to wait for a few years to build those models or those services; they can do it within three months or six months,” Kaumi said during a separate plenary session on Thursday (July 2).
As customers gain access to the same AI tools, insurers will also need to equip advisers with comparable technology to answer increasingly sophisticated questions, he added.
Generali, which manages more than one million death claims annually, is prioritising AI investments in life claims management after finding that even a small proportion of problematic claims generated significant customer complaints.
“We realised that most of the inquiries, complaints, confusion issues that we were facing, though it’s just one or 2% of our overall claims, but even that is a lot,” Kaumi added. “So we’re trying to see how we can completely change the experience for the customer, and thanks to AI, we can invest into a change which is completely different from what it used to be, without being worried about how to integrate into legacy systems.”
Speed becomes the constraint
Executives said the pace at which insurers execute has itself become a competitive constraint as risk conditions evolve more quickly than traditional product development cycles.
“We need to be more efficient in the way that we go to the customer,” said Hicham Raissi, CEO at Allianz Insurance Singapore during the Thursday plenary. “You cannot wait six months, 12 months, 18 months to launch a product.”
Raissi argued that incumbents’ scale, governance and distribution capabilities remain valuable, but only when combined with the agility of technology innovators.
“One of the successful approach we can see is partnering between innovators and incumbent in order to develop the right solution, bring the right solution to the market at the right speed,” he said.
Despite incumbents’ advantages in capital, scale and governance, AI-native challengers may still move faster because they operate with fewer technology constraints.
Challengers often rely on another company’s balance sheet rather than carrying underwriting capital themselves, allowing them to focus resources on improving visibility, data and growth quality “It feels very obvious that the incumbents would get the advantage,” said Will Ross, CEO and co-founder of Federato.“Yet (challengers’) ability to provide visibility, to provide data, to provide clarity on what is the quality of the growth that they’re seeing — you’ll be surprised at the speed that ultimately enables.”
Incumbents will also have to overcome the inertia of their entire software ecosystem, Ross said.
“Insurance executives are somewhat underestimating the amount of cutting, they will have to do to their existing systems to continue to (be in an advantage),” he added. “Pretty quickly we’re going to see people really having to embark on newer, bigger projects again in order to seize that opportunity, because there’s no doubt senior executives… see that opportunity.”
