Ben Telfer: 

Hello everyone, and welcome to today’s webinar which is episode 8 in our Digital Mutual webinar series. Today’s webinar, “Digital Income: Customer-centric Innovations with Digital Ecosystems” will feature the case study of NTUC Income in Singapore. I’m very pleased to be joined by two representatives from Income in Singapore: Peter Tay, Peter is Chief Digital Officer, and also Max Tiong, who is Head of Transformation. Peter, Max welcome, thank you for joining us today. And Peter, I think I’m handing over to you first. 

Peter Tay: 

Thanks Ben. So, hi everyone. I’m Peter and I hope you are all safe and well, and thank you for having me. So, today I would like to share our view on digitization as well as Income journey so far in our partnership with the digital ecosystems. I would start by doing a quick intro of NTUC Income for those who are not familiar with us, and we’ll dive in very quickly on our views on the digital ecosystem landscape, and Max, my head of transformation will be sharing a couple of case studies of the ecosystem partnership that we have gone through over the last couple of years. 

Income is the only cooperative insurer in Singapore founded in 1970. In fact, we are celebrating our 50th year anniversary this year. We have about S$37 billion in assets and a gross premium of around S$4 billion. We are rated AA- by S&P. We are the top composite insurance in Singapore, largest in motor insurance, second in health and probably fourth to fifth position in life insurance.  

We are a multi-channel distribution insurer, and we have in fact the most varied channels ranging from agencies to independent FAs, in-house salary sales force, brokers, telesales, and of course, recent days direct to consumer e-commerce. The main context I would like to set before I dive into the digital insurance work that we have done really is about. Every channels we are in fact they’re continuing to grow as we speak, but today focus really is to talk about the future of insurance and over the last couple of years, how do we set income up so that we are ready for the future.  

So, three years ago we took on this journey of digitization transformation and we set up an independent unit within NTUC Income which we call Digital Income, and the idea really was to set up a group of diverse individuals from very different backgrounds from young entrepreneurs to bankers, to innovative individuals, basically to collectively trying to address the problem statement of how do we design the future of insurance. And interestingly, we did deliberately brought in a team with zero insurance experience, and so far I must say that it has worked out quite well for us. 

So, what do the team actually do? They’re just two main focus, really. First, we basically try to look at the industries today, especially those that have been disrupted by technology or by changing consumer behaviours, because we believe that for every disruptive industry a new set of consumer behaviours begin to emerge and with the new behaviours, it come new risks. So, as an insurer, we are basically in the business of risk with the ability to identify new risks in these areas, give us new ideas to work. The second most important part of the work to come by the team really is how do we… we use the term reimagining insurance, but really what we’re trying to address is really how can insurance that has been traditionally consumed in a way via intermediaries and you pay a yearly premium, or you pay a single premium, how do we change the way this is constructed and this is being consumed so that we are able to take part in the growth of the digital ecosystem which I’ll explain in my subsequent slides. 

One of the fundamental belief that we have when we set this team up, really is that we think if you look across the world today and look ahead further, we think people will increasingly leave their life in just a few big digital ecosystem. Obviously I’ll be more familiar with those ecosystem that’s on the right side, which is closer to Singapore, but even if you look at the US, you’ll see big names like Amazon, Facebook, Apple, and many more. And of course, closer to Singapore, especially China, if you think about the likes of Alibaba, Tencents and Baidu, even individually as a company, they touch more than 50% of the Chinese population. And if you look at places like Indonesia, the likes of Gojek and Ovo, and in South Korea like Kakao, these are all big ecosystem that begin to emerge. And you look at the percentage of the population that they are catching, it by far is probably featured in the everyday lives of the consumer.  

What is ecosystem really? A digital system really we think is basically someone who is able to begin to pull in all the services together, and begin to become a one-stop shop for a customer, and typically a company like that serve the everyday needs of a consumer. And typically the goods and services they produce is also of high frequency, provide a lot of convenience, highly dependable, and most importantly they are also able to pull together other services that they are not producing or providing together to partnership, and they are also able to pull together the expenses or the spends of the customer. And they even roll it into one mega loyalty program, and this by itself creates stickiness, and of course begins to build the brand loyalty of the consumer to this specific ecosystem.  

As we begin to see a trend like that, and it’s our belief that this will be the future on how consumer will deal with the ecosystem because of the high engagement, because of course the massive data advantage that you will see as these services begin to be featured in the everyday lives of the consumer and they begin to build very strong loyalty, we begin to think that there is a real risk that this intermediate, the traditional insurers because the ownership of this customers become fully owned by these big digital ecosystems. So, the key question then is how do we look at this as an opportunity, and how do we position ourselves to begin to take advantage to sell to these millions of customers that is engaging directly with these ecosystems? 

There are really three ways for us to think about it or at least this is Income’s view on how we can engage with these ecosystems. Of course we can attempt we call an orchestrator, right? Meaning we also can become one of these ecosystems, or we can also become an integrated partner with an ecosystem, and last but not least, we can also just be a so-called a product developer, and then we call it a plug-and-play solution provider. And I want to stress that in this life itself, there’s really no right or wrong in any of these ways of working with an ecosystem. It is also highly possible for an organization to think that no, the ecosystem is not the current insurance intermediaries. It is entirely possible. So this is highly dependent on your view of the future, as well as the organization strategy. So, just to share for Income, we think that this is the future. However, we do not think that we, as an insurer is able to orchestrate an ecosystem, at least not for now. So, our strategy over the last two to three years really, is how can we be an integrated partner of an ecosystem as well as the most agile and innovative product developer in the market such that we are able to plug-and-play with any ecosystem partner out there. So this has been the work over the last three years.  

Basically, we begin to develop products and customer experiences around the ecosystem that we work with. Not so much ourself as an insurer, we begin to develop a cue rate, we call it the cue rate, of unique experience for the customers of that specific ecosystem that we work with. So, just to illustrate a point, so Snack was our latest and newest lifestyle triggered micro-insurance we launched about four months ago. We worked with many partners and we began to feature the partners’ ability to win the customers of their ecosystem over. The second product trial is a product that has not been launched, we intend to launch this by next month, this is really our Netflix of insurance where we make insurance become a subscription based, which we intend to then work with very specific ecosystem, and we embed a subscription based insurance with their customers. So, the last area of work really is as I mentioned right from the start of this presentation, we continue to work on new ideas from emerging ecosystem, from disruptor industries, et cetera, to see what kind of products will work well with the ecosystem customers.  

While we think as an insurer, Income will not be able to orchestrate and run like a digital ecosystem at the moment. Our intention, really, is to begin to embed all this carefully and uniquely developed digital insurance product with all the partners. And over time you realize that there is also a cross where partners also participate in other ecosystems. And this is how we begin to spread the wings of our products across the many multi partners, and over time we term a layer we call income re-ecosystem layer is basically overtime how a provider over time become embedded in the various big ecosystem and they begin to overlap. And we think there will be a time where we may be able to orchestrate to a certain degree, and this is also especially powerful when you think of all the enrich customer data that we will begin to get from the ecosystem partners like e-commerce, transportation, their shopping pattern, et cetera. So, I think this is a very powerful point to make, is that we may not become an ecosystem orchestrator right from the start, but over the last two to three years, our work is ready to get also embedded and hopefully we are able to re-orchestrate this into an income ecosystem eventually.  

Of course, technology plays a very important part in this journey for us. And we are lucky to get into a very strategic partnership with China largest and first digital insurer Zhong An in early 2019. And of course is probably one of the largest, if not the largest digital insurer in the world today. And maybe just to give a sense of their technology capability and size, last year during their Singles Day which the Chinese celebrate, which is the 11th of November, just that day alone, they issued one billion microinsurance policy just in one day. So, this is the technology capability they have in the backend. So basically income strategic tie out with them, we learn a lot from the Chinese player, and at the same time we are heavily supported by their technology capabilities at the backend. These empower our entire development of all the micro insurances and the digital product that I’ll be sharing with you today.  

This is a summary of all the new, we think, more innovative unique digital product that we created for ecosystem platforms. We call DTO 1.0, 2.0, 3.0… basically it’s our year one year, two year three, in case you’re wondering, what does that mean. So, I think in the recent days we begin to develop not just product specific, we begin to develop more like a business model where it has the ability to work with multi partners and multi ecosystems which I think Max will be able to share a couple of case studies with you. Thank you. I’ll hand over to Max now.

Max Tiong: 

Thanks a lot. So, I think you guys choose some of the products that we launched, but mainly those in the detailed to those in the DTO 2.0 area, and also a quick summary of Snack itself. So, this screen here, you can see that it’s actually a screenshot from a video we did together with Grab. So, Grab it’s a Southeast Asia’s one of the largest ride-hailing platforms and the likes of Uber and Lyft and they similarly as a platform play, as Peter mentioned that all these platforms are going into providing other products to their driver partners and insurance and finance obviously became a very natural path for them. For the insurance element, what we created the here was a pay per trip model that that Grab provides to their drivers such that whenever the driver were to pick up a customer and drop them off, they will be able to opt into a program to deduct 10 cents, 30 cents, or 50 cents from that ship’s earnings to then issue a micro-policy for themselves. And that micro policy lasts for a year. 

This kind of method allows us to rethink what makes sense for a new economy and highly aware these individuals do not make salary the way you and I may do, so that’s why we needed to change the way they are also being charged. So, how does it work? So, before I go to that, there’s like 4 million Grab riders, so basically they’re one of the leading platforms in this region. You can see that the way we size an opportunity here is based on the number of Grab rides within a year. So, the number of Grab rides within the year will then tell us the opportunity and the size of that market, because every ride could equivalently create a policy. 

How does it work is whenever a Grab driver were to pick us up, or in this case a ride-hailing driver picks us up, and they drop us off at our destination, they complete X amount of trips, in this case let’s say they complete 10 trips a day, on the same day will issue 10 policies, and each of them will last for a fixed amount of coverage. Every day they were to drive let’s say the same amount and over a period of time all these policies will stack up and give them a very good cumulative coverage at the end of let’s say, a year or end of six months. This allows coverage to be built up at a very comfortable pace and in the unfortunate event where something needs to be cleaned, they can at least have some coverage there. They do not have to worry about cashflow to start with because they don’t have to tie into a 10 year plan or five-year plan. We have a fixed premium, when they themselves, I’m not sure if they would make any money driving being a ride-hailing driver. So, this really got us quite good initial success, I think. We have out of our customers today about 25% of them have reached the maximum sum assured of 200,000 just through micro policies issued on a day to day basis. 

The next one we did here was a re-imagination of a motto insurance with again Southeast Asia’s leading motoring platform called CARRO. So, the way that we re-imagine it with them was to push definition of a usage based insurance model where we all look at usage space from the bottom up, instead of seeing what we have today and try to make a usage base. When I say from the bottom up, the way that it works is that customers can go to CARRO’s website where they sell cars, but they also allow people to rent cars from them through a subscription model, almost like a Netflix for cars. When customers rent a call from them and select this monthly subscription from them, they provide their driver details, and with the driver details we’re able to provide a per kilometer pricing based on the car and driver profile. The pricing is unique to the driver. It is real-time, and is unique based on the driver’s claim history, age, gender, etc.

We’re looking to use even more data to augment this unique pricing, such as timing and location. So, at the end of driving for the month for example, we will then tabulate all the kilometers relevant and then bill CARRO in this case because they are the fleet owner, we bill them a pricing for it. So, the reason why we’re from the bottom up is that the pricing starts from the very first kilometer, is that if the guy really only drove five kilometers for that month, they would only pay for five kilometers. A lot of the existing products take a different approach where you require the customer to pay for the full year, and hopefully they do not drive too much. Some rebates and discounts will kick in to give them back a fair pricing. We believe from bottom up, the industry opens up entirely new opportunities out there. 

As mentioned, this is how it goes. Every car and every driver has his own kilometer rate and depending on the usage, we will then determine how much the fleet owner has to pay at the end of the month. This entire model described in front of you is for a fleet, however we are looking to move these to a retail model where just typical drivers like you and I will be able to pay starting from the very first kilometer. 

The next product we have that we launched is with FastJobs which is basically a leading jobs portal in Singapore, and similarly they also looking to reimagine their business model and if you could look at it, the two companies before: Grab and CARRO, both leading in Singapore and Southeast Asia in their respective areas, but they are responsible for creating a brand new business model and looking for opportunities to work with insurers like us that enable their business model. So there’s no different for FastJobs platform, they want to go into a new area, gig economy. How can we enable their business model? When it comes to gig economy, we all know that they don’t work typical working hours, so when they think about group coverage for these platforms, it’s very difficult to calculate something that might be fair in terms of coverage because the same gig worker may only work for a day and never come back again. 

We wanted to create something entirely usage based, and starting from the bottom up, again it’s going to be micro-premiums, reusing the technology and reusing the micro policy system that Peter mentioned earlier provided by Zhong An insurance and technology and the same system that we created for Grab and CARRO but bundling them all together, we were able to create a real-time micro-insurance platform that integrates together with this gig economy platform. So when workers come to this platform to book for their jobs, all they got to do is just say when they want to start the work and then turn up to the… in this case in the supermarket to do a part-time job, is scan a QR code to clock in. Upon doing so, at that very point in time, we will then issue a micro policy. The ability to issue high transaction per second micro policies is critical in order for all these platforms to work, because remember the same platform that is firing all these policies is also firing policies when Grab drivers are dropping off their customers and when cars are being rented by the second. 

All these come together as a very high transaction per second platform, and a good technology provider is necessarily to make that happen. The last and I guess the most recent success that we do have here and very proud of is Snack by Income. When we first started this whole journey, I think Peter actually had this vision about it, was that would it be so great if whenever we take the train right, a policy is issued. I think partially sparked up by what we learned with Grab. So, we have all that coming altogether. We decided to say, “Hey, maybe we could do something that ties into every time we do something, every time we do X, you can get Y.” Similar to the if-this-then-that logic that is out there, again there’s a lot of apps that do this these days. So Snack views on that very simple concept and since then, the potential has been quite tremendous. By focusing on the lifestyle of the consumer, we are able to tie into where they spend, where they go, what they do, to then issue policies to cover that same individual. 

The theory behind it is similar to the Grab concept that every policy is a micro policy and they stack on one another, and they allow accumulating over a period of time. The coverage that we provide includes timeline coverage, personal accident coverage, and critical illness coverage. We’re looking to increase other products in the future. So if you look at this journey, this lifestyle journey, if I were to wake up this astronaut person is called Astro, the mascot of Snack. I will show you even though he is this size, he’s actually pretty healthy. So if you were to see the journey along this way, he takes a train to where… EZ-Link is the national platform when it comes to taking public transportation. So, if we were to take the train to work, go to a cafe and have coffee there, have lunch with your colleagues, go online and buy something from Amazon and FairPrice is also a leading grocery platform in Singapore. So, if all this stuff at the end of the day you’ve done a lot of actions, a lot of it tied to visa transactions, a lot of it tied to public transport transactions. What if I can say that all the transactions snack has the ability to get data from them in real time, and with each transaction we’re issuing real-time policies. 

And the way that we’ve structured it from a value proposition level is that it’s designed to be bite size. It has to be small, it has to be affordable. We don’t wanna use the word cheap, because obviously insurance is something that should not be seen to be cheap or not cheap. It should be whether you can afford it, and whether it’s tied to your financial ability to pay. We believe that being bite-sized allows anyone to have access to insurance and accessibility is something that we stand for. 

The second one is that all of us, you and I will do very different things from the time we wake up. Maybe that example where I had earlier is closer to mine when somebody else would go to the movies. With each unique lifestyle, they are able to decide how that unique lifestyle, how those actions trigger policies to keep them insured, but it doesn’t matter how they trigger, all the policies at a functional level last for 360 days, and they stack on one another. So it’s a very simple concept, but it allows any individual to feel like they have full control to stop and adjust the premiums anytime they want. The more important point is that to join the platform, the customer doesn’t need to make a decision yet, like “I need a 10 year plan…” or “… a 15 year plan.” This is a lot of these customers, they do not know what they truly want yet. And we believe true customer experience getting them covered, getting them to understand the concept of insurance, we’re able to then educate the customer on the benefits of getting a longer term insurance plan down in the future. 

This also serves as a very powerful lead too, for our agency business. When some of these customers were to reach maximum sum assured let’s say $200,000 worth of term life cover. Inside Snack, we have to control it, but also to set us a triggering point so that our other channels know that this customer indeed has built up good enough coverage and is interested to get more so we can then cross-sell them other products that are actually better suited to their lifestyle. 

As mentioned, the products that we have across term-life coverage as a personal accident, you can see from this visuals that they are designed to be obviously clear as a insurance product, but also not look like an insurance app. The reason for that is because we believe that the target audience that we’re going after really resonates with control, resonates with “don’t nag me about protection”, “don’t nag me about financial coverage.” They fall within probably the younger segment, and this segment really wants to be in full control of their life. By giving them both elements, the ability to be well educated, but still feel like this app is not a nagging, and it’s not a totally financial app, they feel like it’s a very lifestyle-ish app. We’re able to keep the customer with us in the longer term. We hope to get investments included by Q1 next year. When I say investments, you’ll be an investment link product, and true investment link product we believe we can even capture a larger subset of customers that today may not want to have insurance product with us, but may be open to getting an investment link product. So with that, I believe the market will really open up next year. 

How have we been performing? Snack, I think as of September, we’ve got about $20,000 on the App Store, and the sign-ups has been pretty positive, it’s like 12,000 positive sign-ups on Snack, and if you were to look on the App Store, back then we were actually the top of the charts in Singapore across the finance category. When it comes to trending, when it comes to iOS and Android the… If you notice on the right hand side, there’s only three apps in front of us, that’s on top of snack just to put it out there because I think my boss is listening so that the number one to three actually, they all belong to the same bank, the National Bank of Singapore. They all belong to the same bank, and they’re the biggest bank in Singapore, so we actually got right up there chasing on their heels. I believe that the customer themselves actually really, really do like the Snack concept. 

One thing that we really, really like is this value here, which is 0.9 activities per day. If you were to think about the Snack concept, the idea behind it is it’s micro. So the success of it has to be tied to how many policies can it issue on a day-to-day basis to make the business model make sense, and to also allow customers to view the meaningful and sizeable coverage. So, having 0.9 activities per day, it means that it’s almost every activated customer is issuing one policy a day. And that means that every day I know something that the customer is doing. If I were to increase this to two or three, the business would just grow in really, really high scale. So I think that this is something we’ve been watching, and this is a very different perspective when we think about a success of insurance product. In the past it would be in terms of the premiums, in terms of the number of customers, but to us, we believe that activity and engagement is a very new way of thinking about insurance. It’s a very new way because it’s closer tied to a technology company, how Facebook, how Twitter and the rest would think about their own success, which is engagement. And we have managed to find that cross junction where insurance and technology has the metrics that make sense inside Snack. 

We also have continued to partner with brands with Snack+ and SnackUp. They’re both different segments within the Snack app, but in short all these different brands partnerships allow us to target their customers in order for us to provide value to them. An example I like to put out there would be, SnackUp is something we’re launching early November, so you’re hearing this firsthand. Basically, we have partnered with FoodPanda in this case where FoodPanda will be working with us to say that whenever a customer will just spend using a visa card on FoodPanda, and that same customer is on Snack, FoodPanda will provide X amount of sum assured to that customer via snack for the customer entirely for free. This means that we enable brands like FoodPanda, Revolut, Thomson Medical… to have a different positioning. To position themselves as a brand that cares for their customer, and I believe that that’s what Snack can evolve into, and that’s what Snack is about. Customers get to pay coverage whenever they were to do a FoodPanda transaction for themselves, 30 cents for example, then on top of that FoodPanda gets to give even more coverage on whatever the customer has paid for themselves. And that way coverage boosts up more meaningfully over a period of time. 

This business model is like almost like a business model within a business model, and we’re very excited that there’s this trend that opened up, and I believe that transformation and innovation should start off with a more exploratory and iterative mindset. And it’s hard for us to land on these concepts when we first created Snacks, and we were very excited that true to creating of products, the constant creation of products, we didn’t that we can find ideas. We didn’t that we can find even more new business models. So it’s really about trying and trying and trying. So, that pretty much sums up those concepts that we have to share. All back to you, Ben.

Ben Telfer: 

Thank you very much Max and Peter for a great overview of some of the propositions and basically the digital strategy behind, in terms of engaging with various digital ecosystems. We do have a number of questions in, I remind everyone in the audience please do send your questions in because we do have a bit of time to pose these to Max and Peter. Before we get to the audience questions, I do have one questions personally that I hope Max or Peter will be able to answer for me. I’ll just share with the audience. You mentioned about the 1.0 around Droplet and Pinfare. I’m just wondering if you could just share a bit more about the products that Droplet and Pinfare offer. 

Max Tiong: 

Yeah, I’ll take this. So Droplet and Pinfare it’s in the earliest stages. Droplet is pretty much… it’s insurance against the rain. Whenever it rains, if the customer were to take a Grab or basically a ride-hailing ride on one of the leading platforms in Singapore. And if you’ll take a ride, whenever it rains, we will cover 60% of the ride fare. So I guess most of us would know that whenever it rains prices of ride-hailing platform tend to go up because there’s more demand for it and less of supply. And that’s how such pricing comes into play. So, we wanted to find opportunities of businesses that were disrupted in this case, taxis were disrupted by ride-hailing platforms and the concept of that disruption led to an opportunity of such pricing. And such pricing is something customers have to actually eventually pay for. So, Droplet then comes in to say, we have a solution to solve that newly created problem that did not use to exist in the past. 

And we had a lot of learnings from there, the pricing for every… I’ll say Droplet purchase, because you have to buy at least a day in advance. Right now it is rainy you can buy it. So, if you can buy a day in advance, that pricing is actually dynamic. So, every day if you were to look at a pricing every hour, the pricing for tomorrow, or the pricing for the day after, we have a dynamic AI model that actually predicts the chances of rain and price it accordingly. That same pricing and prediction model we then doubled down on it to create Pinfare which is basically a price fluctuation insurance for flat pricing. So, we work with Skyscanner as a partner. So, through the partnership with Skyscanner, we’re able to get all the real-time prices of flight tickets to different countries and through that data analysis, we’re able to detect the fluctuations and what causes those fluctuations, and when airlines decide to change the pricing. 

You and I can decide to pin that fare on a particular day. If you and I were to see that pricing and say like, “Okay, I probably want to fly to Bangkok from Saturday onwards, but then I’m not sure about it yet, because I haven’t asked my wife whether we should be going, but the pricing is pretty good. I can pin it for a very, very nominal fee.” So, what happens is that you have seven days to then decide from the time you pin, whether or not you want to buy the ticket. If the price of the ticket goes up Pinfare will come in to bear the entire difference in between. If the price goes down, it’s great for everyone. So, I think that kind of AI modeling that we started from Droplet as the very first product eventually gave way to a deeper AI model that we have the Pinfare. Those AI capabilities now we use them in different formats, for example, using them for doing some of the RPA solutioning when it comes to Snack and the other products that we have in the market today. 

Ben Telfer: 

Thank you, Max, and it’s great to see that learning from those initial products in 1.0 have been taken into what you’re doing in 3.0 and going forward. Another question, well, the first question that’s come in, it basically commends Digital Income of having staff with no insurance background. The questioner actually can’t believe that that’s possible and it’s asking “How many staff do you have in Digital Income?” and also “How did you attract this talent to come and work in insurance in the first place?” 

Peter Tay: 

Okay, thanks for the question. Maybe I’ll take that question and Max can just chime in. So, I think broadly speaking, obviously we’re talking about people who think of new ideas from ideation all the way to product launching. So we think of Digital Income as a team that really doing this zero to one, right? But of course, insurance being a very technical product where pricing is needed from the actuary functions, we do have to actuaries that works directly with Digital Income, while they adopted so-called reporting to the chief actuary of the company. These two actuaries basically work with my team together to think of pricing for the product. So, of course you caught the lie there, right? So obviously in my team, I still have these 2 persons who obviously needs to have some insurance background to do pricing. But basically when I share that it’s more from the point that when we put up this team entirely, as of today I have about 30 people in the team, and then I have about two to three actuaries depending on the current product we’re working on, they will actually full-time get embedded into the project team. 

And for the technical people, meeting the IT as shared earlier, we have a very strategic tied up with the Chinese insurer Zhong An. So basically, this combination of people enabled us to think of new product and launch that. So, attraction of these people I must say hasn’t been easy, and along the way we do lose people as well. And this is almost really unfortunate. For example when I launch a good product, I begin to lose one or two of those people in the project because as some of this product begin to get traction and make some headlines, we do lose these people. So I think that the challenge for the team really is how do we also hold a team together on this journey, and we also begin to learn that this newer generation of people they came here with a certain view in mind. They want to try a product idea and within the 12 to 18 months, because today we typically launch a product in say within four months from ideation to launch. And some of these people after gaining the experience, they actually would like to jump onto another company or another industry to try things out. 

So we also begin to learn about the dynamics of these team players also is evolving and changing. And this group of people that we attract also do not tend to stay within a specific job for too long. And we think this is just the way it will be as we move forward. So, this remains a challenge for us too. How do we continue to attract, and how do we continue to get this very diverse team of people to join the team? Max, I don’t know if you have anything to add? 

Max Tiong: 

I think Peter’s summary of that one is great, and I think the reason why we made the statement that we hire people that don’t have that background and is working for us, I wouldn’t think that’s a necessary path that people have to do, actually. I think it just allows somebody without that background to challenge the assumptions. And I mentioned to the team that sometimes we just need to where a first principle approach is sometimes some of these assumptions that we have about why our business is a certain way, does it really come from our own bias because we are used to it, or is there something they can really change? So I think having people without that background allows us to get into first principles conversation easily, but I think anyone can actually get that kind of conversations if they have that mindset. 

Ben Telfer

Thank you, Max. Peter, you mentioned that you work with a couple of actuaries coming up with the pricing. Do any of your tech innovators work with others in Income to share some of these new learnings, innovative processes, agile methodology? 

Peter Tay: 

Yes, certainly Ben. So, the way we think about this is of course I know that there’s a time limitation today, so what we didn’t share obviously is for Digital Income, we primarily look at two things, right? This presentation is really to think of the future of insurance. We are trying to develop a product which we could engage with the customers of tomorrow, right? But one part of the work that we didn’t share obviously is we call a present forward, basically it’s based on today, based on Income’s product suite today, based on our processes, our channels today, what can be digitized, for example? So, this is also a piece of work that’s undertaken by the team where we begin to see, for example, some of our core products like our health insurance today. We are probably the only insurance in Singapore that has already enabled end-to-end digital fulfillment, meaning right from the start they go in they are guided, the entire consumer journey has been digitized and they could actually get the health policy in 10 minutes if they’re in a clean bill of health. 

So, this is some of the work that we have done, but for work like that, basically it focuses more on digitizing the journey, not so much about trying to break the consumption or to think of a new innovative product that’s not seen in the market. So it’s two very different type of work, but the answer is really, yes, this is why we try to bring the entire organization along. But having said that, we also recognize that this digital insurance is not going to become the best selling product just tomorrow like that, right? It’s going to take some time and it could be faster than we think, or it could be longer than we thought, but most importantly is are be ready when the time comes for it? 

I think this is the primary focus for this thing really is to continue to push the boundary on one hand, and on the other hand continue to upgrade and continue to digitize the existing processes as well as product suite to enable them to become digital

Ben Telfer: 

Thank you Peter. Question come in. It’s relating to your UBI product or partnership. Can you just explain a little bit more about the technology behind this to calculate mileage? Is it from smartphone telematics? Max, perhaps I’ll come to you for that one. 

Max Tiong: 

Yeah, sure. Okay, thanks for that. This partnership that we have, basically there is a telematics device in the car, there is also a 3G chip in the car. Now with 5G getting popular, hopefully there’ll be more data and more constant data coming through that method. But basically a 3G chip in a telematic device pluck within the car, they’ll be able to get the location, the speed, whether the engine is on and a lot of other information all in real time. So, we actually know where the car is at any point in time within the Singapore Island. Good thing is Singapore is still an island, right? So it’s not that big. So, for us connectivity is not an issue. So yeah, it comes directly by the telematics chip in the car. 

Ben Telfer:

Thank you, Max. And I’ve got another question relating to your UBI proposition. We’ve seen many lockdowns due to the pandemic and that’s impacted driving behavior, and a lot has been talked about that difference between traditional insurance and UBI. Have you seen a growth in interest or demand from your customers for these UBI policies in recent months, I guess since February, March, once the pandemic hit? 

Max Tiong: 

Yeah. So, definitely there’s a increasing demand both from the corporate fleet side and also the retail side. So from the retail side, we haven’t really launched it yet, we’ve gotten everything ready mainly because of this shift of the customer’s mindset. But there’s one thing that we realized from consumers is consumers through this whole pandemic, they aren’t really saying that “I just want something cheap.” I guess pre-COVID, basically everyone when it comes to selecting a product versus another product is really about pricing, is about which one provides us the cheaper one for insurance. We realized in the last couple of months, the conversations we’re having with fleet owners and also with retail drivers, when they tell us that, “Oh, do you have such a product?” is not really about pricing, but they realize it’s about flexibility, and it’s about fairness in their eyes about usage, because the whole period, the last couple of months have changed people’s perspective of ownership, people’s perspective of owning something and using something, so they also brought up the fact that maybe if am only charged whenever I’m using the car, that seems fair. 

I think that kind of conversation is necessary because you’re moving away from a price war conversation to a different level of conversation of our consumption, about usage. Although once the whole industry has moved to a certain point where every other company does have a usage based product, a price will inevitably happen. And then I think that’s the reason why on our side we are pushing very hard to use different data points to augment pricing, and the next challenge of UBI I don’t think is getting people to be agreeable to it, I think that demand is there, the next challenge of UBI will be getting people to be agreeable to getting secondary data from them. 

From an insurance perspective, we would like to use it for pricing, but from the customer’s perspective, they will think that that’s not necessarily for pricing. For example, where are you on the Island, if I’m charging you more certain parts where you’re driving, and certain time when you’re driving, would that make sense? And once customers realize I’m collecting all these other data, they might not feel too comfortable about it. But I think it’s an evolutionary story. So demand is increasing, but I think customers are also getting a bit more savvy about what data they’re sharing with people. So, the challenge would be a new one in the future, yeah. 

Ben Telfer:

Thank you, Max. Just going into a slightly different topic, this question asks about open banking. Have you seen any changes as a result of open banking initiatives in Asia, and if so, what changes have you seen, and how has that impacted income and your quest for new propositions? Peter perhaps you can make a comment or Max about open banking in Singapore. 

Peter Tay: 

Maybe I’ll just attempt to share a bit of that, and then Max could you please chime in. I think in Singapore over the last six months or so, in fact, the last one year before COVID hit, I think what came out more was really where the regulator announced that they will be issuing five license for a pure digital bank, and that is the main thing that has been really turning on the heat for many, many ecosystem partners because this digital banking license actually allow a nonfinancial institution to apply, for the first time in Singapore at least, to apply for this banking license. So then, obviously COVID hits and then the license got delayed to end of this year. So, as you know income only operates in Singapore and for us, we are keeping a very close watch on this is because this is where the power of the digital ecosystem that I have tried to explain earlier in the opening, where they will begin to monetize the very strong customer base that they have because this ecosystem knows exactly how their customers spend their day, their time, their money. 

So, this become a very, very big challenge, I think, for any of the insurers who has not so-called partake in some of this ecosystem partnership work, because this will really change the way insurance is being sold as well. For example, you think about a very traditional bank assurance, this is going to be very, very different, and the digital bank so far we have seen most of the proposition really will target the young segment, right? These are the people who are probably in their early twenties to early thirties. This will be the segment of people they are really targeting. And if you reflect this on insurer segment of customers, this must be the segment of people that is extremely attractive to have, right? So this become the key problem. As we await how this play out in Singapore, I think this would really change the way we also deal with banks. Yeah. Max you have anything to add on this…

Max Tiong: 

I think I totally agree. I think the redefinition of how the ecosystems is applicable to how insurance can partner out with is actually opened up by giving ecosystems that are non-financial the ability to enter this space. You also start to think actually, even for ecosystems that did not get this digital banking license, there are opportunities for us to work with so many of them. I think it just reframes the minds of many people that really, do you really need all these facilities for you to actually create interesting propositions for your ecosystem customers? You do not need insurance license to actually provide insurance offerings. You just need to partner with one because you already have everything ready there. So, I think it just reframes the mind of people like myself. Now we could actually partner with anyone. 

Although I do recommend that the journey for a digital banking license and the digital challenger banks would still be… and I’ll feel better because at the end of the day if the only facility they are going to be fighting for is the same insurance products, the same banking products and the same credit card products. In our case, the same insurance product is where we should bring our value to partners to say we could create something that’s not the same. So I think there’s a lot that we can do, yeah. 

Ben Telfer:

Thank you, Max, thank you Peter, and thank you for an excellent question as well. I think we’ve got time for just a couple more questions that I’d love to get to because some of these questions are really, really excellent. A question here talks about some of these new propositions really helped to address the protection gap, and Income as a social enterprise really focuses on offering affordable insurance. How have the values and principles of being a cooperative and being a social enterprise guided Digital Income’s journey? 

Peter Tay: 

I think maybe I’ll use one of the products that Max has shared to illustrate this point. Obviously as the only social enterprise insurer in Singapore, I think that to provide accessible and affordable insurance is a very important mandate for us. Now, if you think about the critical illness product that we have designed for the Grab ecosystem, if you think about it, the drivers basically are a segment of people who typically will not spend hundreds of dollars to purchase a critical illness policy just like that. And I say that based on a joint basic research together with the Grab ecosystem partners to talk to a lot of these drivers and to find out what bothers them and what is important to them. So, the focus on the end customer of this ecosystem is extremely important. And with that in mind, how we decided to then design this product is then based on this principle about accessibility and affordability. 

Now, if you think about insurance like that today, it really changes the world you see, because when you start to buy, your protection needs are actually not fulfilled yet, but it allows you to accumulate slowly over time, right? Then the distractors obviously will put up a question and say, “Look, if something happened to the drivers tomorrow, then your insurance have not served its purpose.” But the team think very hard about this, and then we also based on today’s adoption that we see that is very strong, we actually believe that if you don’t have a product today, these are actually people who will not even buy. So then we changed the whole philosophy of our micro-insurance product is that we designed so that people begin their journey of getting themselves protected. And this is a very important philosophy of NTUC Income released to make insurance accessible and affordable to all walks of life. And as we begin this journey, or micro-insurance I think this is a very important point. 

The second point is obviously in a small country like Singapore, 5 million population plus, you realize that microinsurance is probably a very, very difficult business proposition to make money, right? So, it’s very hard for a commercial insurer to want to invest in technology like that to run micro-insurance. So, I think this again, as a social enterprise, we think this is important because we begin to see traction how certain segment of people who does not buy, are not able to purchase traditional insurance begin to build up their portfolio through micro-insurance. 

Ben Telfer:

Excellent, Peter. It’s really great to see an example of microinsurance and inclusive insurance in a more developed market. Obviously we have lots of examples of microinsurance initiatives helping in emerging markets, but it’s great that it can also be seen in more advanced markets. Just finally, one more question I’d love to ask you both. It’s almost two questions in one, but the first part says it’s more of a statement, but it’s saying that, “Do you see insurance will become a visible and embedded in daily life through these ecosystems?” And then the second part of the question is “What’s in store for Digital Income 4.0 and beyond.” Perhaps you could answer both of those in one. Max, perhaps you’ve got some comments on that first. 

Max Tiong: 

I’ll comment first, and then I’ll leave Peter on the DTO 4.0 and I think that’s the direction it was going to happen to. But basically I think that becoming invisible is a good way of looking at it, but I do not think that because insurance is still something that requires understanding, it requires customers to know what they got. And particularly, you don’t want to get the customers to the point of it’s like free travel insurance with your credit card, and they never know how to use a claim yet. So, you never want to get the products that you’re creating to that point. But I do think that being embedded, being seamless is definitely that nice intersection that we need to learn that. The tricky part would then be, how can we still educate customers to let them know what they have, but they don’t need them to worry too much about what it is, worry too much about am I overpaying? Am I over-insured or am I under-insured. I think removing all those worries through embedding in ecosystems and lifestyle actions that actually that will become the future one way or another.

Peter Tay: 

Yeah, so maybe for the last second part of the question, I think for us we’ll continue to focus on what we think a digital ecosystem is going to be a very important part for the customers’ lives. And we will continue to focus to get our product partnership with the digital ecosystems, and embedding it between their customer journey is a very important focus for us because we believe micro-insurances must be embedded invisibly into their everyday lives. And they cannot be made to make a decision every time the lifestyle happens, right? It must be auto-triggered. And we have already set this up in terms of both technology, as well as some of the product that’s already in the market. And obviously then the main focus for us in 4.0, really moving to 2021 is really, we are going to double down on scaling Snack which is going to launch next month. Hopefully we will get there. 

Ben Telfer: 

Thank you very much Peter. I’m afraid I’m going to have to end the webinar there. Thank you both so much for sharing some amazing examples of what Income’s doing, and we really look forward to hearing more about what’s coming on with 4.0 and beyond. Thank you everybody for joining today. As I mentioned before, this is episode eight in our Digital Mutual webinars series. Episode nine is in a couple of weeks, and it features our member from the Netherlands, Achmea on “Becoming a data driven digital insurer to enhance value for customers”. If you’d like to register for that webinar, you can get the link viewer on screen, and if you’d like to watch any of the previous webinars, recordings and presentations are available on our member-only web page for the Digital Mutual. 

So, just a final thanks to Peter and Max for joining us today. Goodbye. 

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