SINGAPORE - Customers of streaming service Netflix are familiar with the concept of paying around $10 a month for a subscription plan that can be changed at any time.
This model has now been adopted by insurer NTUC Income.
Tribe, as the product is called, was launched on Wednesday (July 28) and is Singapore's first subscription-based and customisable insurance offering.
Customers can subscribe to any of its three modular insurance packs for as little as $5 a month and obtain coverage that includes critical illness.
They can mix and match the packs and choose to vary the premiums according to their changing financial demands.
The three packs comprise an essential one that includes term life and critical illness plans, a recovery package with hospitalisation cash plans, and a child pack with illness and injury coverage for children up to 16 years old.
Each pack has three "sizes", which depend on the amount of monthly premiums. These sizes can be upgraded or downgraded at anytime, according to a customer's needs.
NTUC Income chief digital officer Peter Tay said Tribe is targeted at those who need to have more control over their cash flow and may not be able to pay for long-term, fixed conventional plans. This includes gig workers, new parents and those starting their first jobs.
"In recent years, Income has been... rolling out new insurance business models to address unmet needs," he added.
"Cash flow constraints against the backdrop of a volatile economy are also heightening customers' desire for greater control over what, when and how they purchase insurance, as well as the ability to customise and consolidate their purchases at a desired price point."
Customer feedback has shown that conventional insurance can come with high barriers to entry, such as the cash outlay required. Insurance plans may also have components that the customer does not need, Mr Tay said.
"So Tribe was set up to help consumers to build more relevant portfolios, and with on-demand adaptability at a price that they are comfortable with."
For example, a 34-year-old food delivery rider can buy the "medium-sized" recovery pack at a premium of $20 a month. Under the illness recovery component, he can get daily hospital cash of $75 and daily cash benefit of $75 as well for prolonged medical leave due to illness or infectious disease.
The injury recovery plan can provide $125 of daily hospital cash and the same amount in daily cash benefit for prolonged medical leave due to injury.
He can choose to upgrade just the illness recovery portion when his income stabilises, for instance.
If he has a child, he can also downgrade this recovery plan so he can buy a child pack on the same budget.
Mr Tay said: "We are bullish about the subscription model for insurance simply because it speaks to a customer as an individual and plays to his or her unique circumstance."
He noted that globally, subscription businesses have grown five to eight times faster than traditional businesses, with services like Netflix and Spotify booming in popularity.
"Technology has enabled customers to get access to what they want immediately and with greater personalisation," he said.
This provides new market opportunities for insurers. "Access to insurance and its affordability must be made available so that people can stay protected."