Innovation to beef up insurance sector
We hear a lot about innovation these days, be that in the private sector or in the development milieu. But what does it mean?
We define innovation as 'doing something different that has an impact'. The definition uses the word 'doing' instead of 'thinking' because the essence of innovation is execution. The words 'something different' refer to the simple fact that it must be new “nova”.
Lastly, the thing that distinguishes an innovation from an invention is that for it to be an innovation someone must be willing to pay for it; it has to add value, it needs to have an impact.
We are seeing new technology enablers accelerate the pace of innovation, making things that used to be difficult, simpler, easier, more convenient or more accessible.
We also benefit from lower entry costs due to simpler coding, cloud services and a worldwide ecosystem centred on the cult of the entrepreneur.
Young people today, if they listen carefully to customer insights all around them, can build new innovations. And this is really the heart of the reinvention of industries.
When you take a customer-led approach, employing deep customer empathy and design thinking, you can build from the ground up new experiences that truly add value to everyone's lives.
Innovation is about the customer, not technology or new products.
Competition in every sector is more intense than ever before, and businesses, no matter how big, need to keep reinventing themselves to keep up with the ever-changing ways of the world.
The life insurance industry is a sector that has huge potential in Bangladesh, mostly because of the rise in the number of middle-income families.
Boston Consulting Group projected in a 2015 report that each year up until 2025, the annual income of 2 million additional Bangladeshis will surpass the threshold of $5,000.
Although the number of people eligible for life insurance is increasing rapidly, the insurance penetration in Bangladesh remains poor.
In 2016, the industry recorded a meagre 3.77 percent growth and nearly half of the insurance companies saw their incomes decline.
Life insurance plays a critical role in the Bangladeshis' lives, and yet we are not seeing the growth that is commensurate with the rise of economic conditions, mobile phones, or internet services. Why?
Only by reassessing the job-to-be-done of life insurance from the perspective of the Bangladeshis we can unlock the ways in which the industry can move from being a low-intimacy obligation purchase to a pull-product that enhances people's lives.
Simply, we need to add new, often health-related value-added services through partnerships and deliver value sooner by increasing the frequency with which we interact with our customers and prospects.
Customer expectations of the Bangladeshis are ever-increasing. We are getting used to frictionless experiences with our favourite digital brands and now expect our financial services brands to know us, interact with us on our own terms, and make things easier.
This industry in Bangladesh, therefore, requires going beyond its traditional practices and shifts its mindset to think of itself as more than just a financial service.
We need to build inimitable experiences that do not just help the industry in Bangladesh but whose purpose is to help Bangladeshis.
In summary, I believe the time is ripe for innovation in the life insurance industry in Bangladesh for two main reasons.
The first is that the large number of young and highly mobile, tech-savvy customers want to interact with brands more frequently.
They want brands to add value to their lifestyle without the concern of product or service it is offering. We are essentially living in an experience economy.
Secondly, the Asian economy including Bangladesh is growing in importance worldwide. Asia is expected to account for approximately half of the insurance industry's growth in the next decade.
The “Asiafication”' of demand means that we need to innovate in Asia, for Asia.
So what should the industry do about this shift? I suggest a three-part recipe.
Firstly, in Bangladesh, the insurance service providers must become customer-led. Only then will we start designing products, creating experiences, and adding services that can address our target customers' evolving needs.
Secondly, we need more transparency. We must strictly ensure that every promise made to current customers is kept.
Digital platforms that keep our customers informed on the status of their insurance purchase, give them timely information about their claims, allow users to benefit from each others' experiences are necessary.
Transparency has come to every industry. For instance, would you consider taking an overseas trip and booking a hotel without checking a user review?
Thirdly, we need to become a magnet for talent. The industry should appeal to more innovative and forward-thinking people, to attract them to the industry either as associates or as partners.
On the talent front, we believe that espousing values like curiosity, experimentality, expansivity, velocity, and bravery are key.
We can shift the mindset of our existing employees and hire new talent to keep the industry on the cutting edge.
If the insurance service providers and the authorities work in collaboration, a step change in the value our industry delivers to the Bangladeshis will be felt.
Insurance is not about providing for a person's family in their absence; it is beyond that now.
It is about peace of mind and how to live a longer, happier and fuller life.
MetLife in Bangladesh has recently opened an innovation centre in Motijheel which is open for all to share their ideas in an open environment.
Further plans to broaden our digital outreach will help even further. We are excited to get started on this innovation journey.
The writer is the chief innovation officer at MetLife Asia and chief executive officer of LumenLab.
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