Digital technology is unlikely to replace the human touch at insurers, especially in Asia, says a top insurance executive. That is why human capital remains one of its largest investments, said AIA Group chief executive Mark Tucker.
"There are elements where digital technology will definitely ease and reduce costs but, a lot of times still in Asia, technology will not substitute somebody talking to you," he said. "Every person's individual needs on the insurance side are different in every country."
Mr Tucker told The Straits Times: "We ask what you need in Singapore - where there are different tax, accounting, legal systems - to what you may need in Malaysia. It's different."
Insurers stay ahead by customising the experience and advice they offer people, and "doing that one-to-one, through an agent, is still a very powerful way of assuring you get the best possible advice".
He acknowledged some emerging trends, such as people choosing not to get advice. This would be true in the case of Singapore's direct-purchase insurance, which are simple life insurance products sold without commissions and financial advice, so the premiums are lower than those for comparable life insurance products.
BEST PEOPLE AND EXECUTION
Our strategy comes down to people and execution, and we've got to have the best people and the strongest execution.
MR MARK TUCKER, AIA Group's chief executive, on getting its people to be the best that they can be every day
Or take a growing popularity of insurance portals where consumers can pull data and compare products. These are established in regions such as Britain and are just starting to gain traction in Singapore.
However, Mr Tucker is confident that consumers still need the human touch, adding: "At the moment, the majority choose to get advice and we think that trend will continue for the time being."
Other signs that will boost the insurance business include a mortality protection gap of US$51 trillion (S$71.7 trillion) in Asia last year. This gap occurs when the proportion of protection needed is not yet covered by insurance or savings.
Mr Tucker said: "The US$51 trillion protection gap is basically for death cover... You're probably talking about a US$100 trillion gap (including health), and the savings gap - these are numbers that are vast."
The majority of AIA's products are protection products, and it will continue to work to meet those demands, he added.
With such staggering growth in the region, it comes as no surprise that AIA is pouring a "significant" amount of investment into areas like technology and its employees.
Although technology is not the solution to everything, it raises productivity and the customer experience, so that agents are free to focus on their clients.
AIA is already using an interactive point-of-sale system, which is its primary sales tool in the region.
It is also expanding its interactive mobile office platform's functions to improve how agents manage their daily sales activities and how they are trained and recruited.
AIA has also created an online customer community across the region, which will gather customer insights, to help shape future product and service development.
"There's always more you can do. As the environment changes, there are other ways of doing it and technology is certainly one of them. We've done a lot on that and we'll continue to do more."
On the size of AIA's investment in technology, Mr Tucker said: "Our investment... is very significant. Other than investing in capital for the business, technology is probably our biggest investment, and investing in people."
AIA has not released specific figures, but the chief executive noted that such investments have increased every year. "Because of the scale of our business, we can manage that within cost ratios as the business continues to grow."
Investing in its people has also reaped rewards for AIA.
The value of new business in its agency channel grew 21 per cent to US$756 million in the six months to May 31, or 24 per cent on constant exchange rates.
AIA noted that the agency force contributed 72 per cent of the group's overall value of new business in the same period, deeming it "excellent performance".
In fact, the insurer is building what Mr Tucker calls a world-class training centre - targeted at training its leaders - in South-east Asia, slated to be ready later this year.
He said that it is a leadership centre for three elements of AIA's business - leaders of executive teams, the senior leaders of distribution, and senior technical leadership.
"We're investing significantly in training, support, development and each team has a development plan about growth and we aim to get people to be the best that they can be every day.
"Our strategy comes down to people and execution, and we've got to have the best people and the strongest execution," he added.
Turbulent markets may be a formidable challenge but AIA is well equipped to weather the storms.
"We've been around for 100 years and through every cycle, boom and bust that you can imagine. We've continued to grow through all of that. You can look at equity, currency, interest rate markets as a challenge. They are both a challenge and an opportunity," said Mr Tucker.
He also said that the important thing is for AIA to match assets and liabilities locally.
"For example, in Thailand, when we write a policy, we write it in the Thai baht currency. We match that against Thai baht assets... As long as the duration is long, and we have long-duration bonds, short-term fluctuations aren't significant."
The fundamentals of its business in Asia are in place, he added, and the economic and policy management of the firm has been good despite the slowdown.
He expects the economy to move during the next 18 months.
Global trends in financial, solvency and capital regulation and issues involving consumers continue to keep insurers on their toes, added Mr Tucker, and they are "increasing in intensity and focus".
"Many trends are converging into global standards but we manage and run ourselves to global standards. We look at each of our countries (that we're in) and we say that we want to be the best in those but if those standards are not at levels we think are acceptable, our people must manage them to the best international standards."