Insurer is exploring how best to use tech and respond to changing work and population patterns
Mr Ken Ng's entry into Singapore's insurance scene a decade ago would prove to be nothing less than a baptism of fire.
Lured over from AXA China by NTUC Income's then CEO Tan Suee Chieh, who dangled the carrot of a key role in Income's transformation, one of the first actions he initiated as chief actuary and chief risk officer of the national insurer was to cut the bonus payout of life policies, or, in his words, "restructure it".
This drew trenchant criticism from Income's legendary former CEO Tan Kin Lian, who went public with his dismay at the actions of the enterprise he had built up over three decades. There was talk that Income, a cooperative built as a social enterprise, was losing its way.
"I don't claim foresight," Mr Ng told me recently, chuckling at the memory of that controversy. "Looking back, the move gave Income more resilience, especially going into the global financial crisis. Since then, we have maintained payouts at what we'd have paid if we had not reshaped."
Four years ago, Mr Tan Suee Chieh left for a bigger role in the NTUC group and Mr Ng moved up and into his place. Since then, a good part of the effort has been, as a recent award-winning commercial for the firm puts it, to act upon the wisdom that "times have changed; insurance should too". Mr Ng sees it as bringing the "conversation" up to date.
Thanks to its links to parent NTUC, Income is a trusted brand even if that comes with a bit of its own baggage. If Income could re-establish that trust in a contemporary context, its dominance could be assured. Hence, the times have changed promotional. While it is difficult to directly attribute fresh insurance sales to the campaign theme, the advertisement has been a success, he believes.
Like every other field, albeit less slowly when compared with banking for instance, the insurance game is changing. Artificial intelligence, the gig economy, digitalisation, the Internet of Things, the rapid spread of sensors in consumer products and a variety of other things are affecting the way we live, work, play - and provide for our safety, security and investment planning.
A team from Income led by Mr Ng recently went on a trip to China and was amazed at the experience. A restaurant they dined in was built entirely around the WeChat portal, from ordering food to paying for it on mobile phones. On the way back to the hotel, the payment for the taxi ride was again made through WeChat, with not a single yuan exchanged in physical cash.
And for weeks after they returned, the restaurant continued to update its guests of its activities, including new offerings.
The Income team mused that aside from the actual eating, they seemed to have done almost all else over WeChat. The times certainly were a-changing.
"We want to be in the place of preparing for that possibility and being ahead of it when it comes," says the 48-year-old Mr Ng. "Hence, we have embarked on our digital journey to redefine insurance."
In the anything-but-flashy headquarters of Income in Bras Basah Road, Mr Ng and his team are figuring out how to meet the emerging challenges. A chatbot, Jiffy Jane, which uses IBM's Watson technology, is trying to learn how artificial intelligence can be possibly used to produce an interactive bot that can address most ordinary requirements of customers.
Others are examining an even more promising area: how to use rapid advances in telematics and the Internet of Things to see if car drivers, for instance, can be monitored for driving patterns and habits so the safer ones on the road can be handed a cheaper insurance bill than others.
How does that work?
Insurance starts on the basis that the insurer does not know enough of certain types of people, say a group of drivers. Next, you exclude the less competent or riskier drivers, generally those that have had an accident or are very young. The rest is the so-called prime group, generally regarded as safe.
"If a guy is 50, drives a Corolla, has had no accidents for five years, there is a good chance he is an 'Uncle' driver and safe," says Mr Ng, chuckling. "Of course, there's always the chance that he is a Wild Uncle."
But with technology, consumers - drivers in this case - can be monitored in real time. The young, particularly those who live on social media platforms like Instagram, have a different sense of privacy and do not see this as an intrusion.
And so, technology converges with human psychology and a new product comes to life.
Income has launched a product tailored to this segment and a "reasonable" number have signed up, says Mr Ng, who sees this possibly changing the face of motor insurance, especially for providing short-duration cover. Think of it, he says, as a sort of Electronic Road Pricing version of insurance.
Mr Ken Ng has been chief executive officer of NTUC Income since October 2013. He is 48 years old.
Born in Malaysia, now a naturalised Singaporean, he has an MBA from Imperial College, London, and a BSc in actuarial science from the London School of Economics.
Between July 2005 and June 2007, he was chief financial officer and chief marketing officer at AXA China. Prior to that, he worked for two years as the marketing director of Prudential Assurance in Hong Kong.
Married to a Vietnamese, he has twin sons aged four.
NTUC Income was the first social enterprise established by the labour movement in 1970 to provide affordable insurance for Singapore workers.
With more than two million customers, it is Singapore's largest composite insurer. Last year, it reported achieving a gross premium of $3.4 billion, 17 per cent higher than in 2015. It had $33 billion in assets under management at the end of last year.
The experiments with IBM's Watson are providing more of a challenge though, for Income. The Jiffy Jane chatbot is a work in progress, like a baby learning to emulate human elements and to speak. Handling complexity has not proved to be easy for Jiffy Jane as the technology is still maturing, and any deviation from the norm is too vexing for the machine's intelligence.
"The IBM team tells us that Watson is like an intern you hire from university," says Mr Ng. "He knows nothing but gets better as you train it. It's a useful enough analogy. What we want to know is exactly how fast he can learn and how clever he is. Watson claims natural language ability. We want him to be able to form an opinion."
Income is discovering that while a lot of people like to chat up Jiffy Jane, not enough want to do a transaction over the platform. That reluctance says something about consumer instincts and behaviour. Still, changes are rapid in the digital world and the company senses an inflexion point may be looming. So, Mr Ng wants to be ready for the day when the machine is ready and the consumer is ready for the machine.
"Some things have to be experienced and you have to delve into it. We are at that stage," he explains. "If you stay conceptual you will never understand it. Yet, we are not always able to calibrate it because this is a bit different from something more measurable."
The insurance game is set to change in various other ways as well. At the moment, several products are predicated on the calculation that 90 per cent of the customers have a stable income but, as the gig economy takes root, and people flit from task to task, or employment becomes seasonal, Income too will need to take stock of the environment.
On another scale, people are living longer lives and society is ageing, one reason Income has SilverCare Insurance, a product that drew on lessons from Japan and South Korea, both with ageing societies.
"We need to rethink too because what we consider elderly today will be considered normal population tomorrow," he says. "As the mainstream gets older, insurance must be able to provide some sort of cover. If you look at Singapore's statistics you see the (silver hair) tsunami coming, although it is not upon us yet."
The Malaysia-born, naturalised Singaporean who learnt his actuarial science in the UK, sees himself as not a disruptor as much as a "continuer" in the company built up by the two Tans over nearly five decades.
He acknowledges some tension between his twin goals of "professionalising" Income and continuing to define what it means to be a social enterprise or, as he puts it, "doing well, and doing good". In his previous avatars at other firms, the first goal tended to outweigh things. At Income, he says, products like insurance for children with autism fall more into the second realm. The trick is to maximise the confluence between the two.
With about $30 billion under management, Income is a significant investor in financial markets. Quite a chunk of the money is invested in Singapore property, such as offices and retail malls. Despite all the talk of disruption there will always be demand for property, he feels. While its investment strategy is always long term, recent years have been challenging in the markets.
From an insurer's point of view, he is comfortable with the implications of a rollback in quantitative easing by major central banks - "if interest rates normalise at a higher level it will be better for everybody, including policy holders".
The father of twin boys aged four, Mr Ng was stricken in his late 20s by a form of arthritis for which there seems to be no cure yet. With that in mind I queried him on how much insurance he carried.
"A couple of policies," he told me. "I just buy enough and I buy from Income. Interestingly, I didn't have an insurance policy until I came here. I know many actuaries who do not have insurance. It is like people who don't like to eat their cooking, I suppose."
A version of this article appeared in the print edition of The Sunday Times on October 22, 2017, with the headline 'NTUC Income's chief looks to change with the times'. Print Edition | Subscribe
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