# Infosys POV
Title: Thriving in the Post-Covid Insurance Growth
Author: Infosys Consulting
Format: PDF 1.7

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 An Infosys Consulting Perspective By Aaro Kauppinen, Sagar Roongta, and Jitin Sharma Consulting@Infosys.com | InfosysConsultingInsights.com THRIVING IN THE  POST-COVID  INSURANCE  GROWTH Insurance in Emerging South-East Asia

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 CONTENTS 2 1.<|endoftext|>Introduction 2.<|endoftext|>Operating Environment Changes 3.<|endoftext|>Changed Consumer Preferences 4.<|endoftext|>Succeeding in the Next Normal 5.<|endoftext|>Recommendations for Insurers Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting

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 Successful insurers gain market share through CX  and personalization Emerging South-East Asian markets are seeing  tremendous growth in insurance. We expect  +9-11% Gross Written Premiums (GWP) growth  year-on-year until 2025 across the region,  contributing to incremental 34-40 billion USD  in GWP. This is much welcomed after the  COVID induced setback. Despite COVID and  other regionally impacting headwinds like  China’s extended economic slowdown or war in  Ukraine, several insurers have been able to  grow their premium income through this  tumultuous period.<|endoftext|>Our analysis of the success stories in the region  highlights three high-impact opportunities for  insurers to grow at a market-beating rate:  personalized customer experience, distribution,  and the ecosystem, and lastly, product  innovation. In addition to the three high-impact  opportunities, we identified several other  opportunities to improve their market position.<|endoftext|>INTRODUCTION 1 2 3 Personalized Customer  Experience Distribution and Ecosystem Product Innovation Other Opportunities ✓ Scenario-based Business Planning ✓ Growth Market Investments ✓ Tailored Pricing and Commercial Excellence ✓ Product Portfolio Rationalization ✓ Operational Efficiency ✓ AI and Analytical Customer Models ✓ Wearables and the Internet of Things Thriving in the Post-Covid  Insurance Growth © 2023 Infosys Consulting 3 What should insurers in South-East Asia do  to reap benefits from the  post-COVID growth momentum?

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 INTRODUCTION This point of view is structured into 4 chapters. First, we explore the macro-level operating  environment impacts of COVID to insurance and apply a driver-based model to forecast insurance  growth in the region. Second, we summarize the changed consumer preferences towards  insurance. Third, we highlight key success stories of insurers that were able to beat the market  throughout this tumultuous period. And in our Fourth chapter, we summarize all the key learnings  how insurers could accelerate their growth in the post-COVID economy.<|endoftext|>Product innovation provided two growth opportunities for insurers:  response to market changes and increase in relevancy. The most agile  insurers were able to release new products covering COVID-related risks.  Financial and insurance literacy has not developed at the rate of digital  technology adoption; targeted, customer-friendly products have been a  success driver for insurers to penetrate the previously uninsured  segments.<|endoftext|>Distribution and sales are still largely driven using agency and broker   channels in the region. The individuals still want the personal contact to  understand the relatively complex insurance products. Supporting  agents and brokers with digital tools and training, and therefore enabling  the digital customer experience through an intermediary is a major  growth driver.  Ecosystem participation, including bancassurance, is prevalent through  the region. Providing the right offers and tools for the right partners and  through the right ecosystems is the key for growth.<|endoftext|>Personalized customer experience is a digital and analytics- driven approach to increase the insurance income, GWP, customer  satisfaction, and cost-to-income ratio. Targeted and tailored messaging  from marketing, through sales, underwriting, claims and the rest of the  customer journey has proven its value in the region. Emerging South- East Asia is generally favorable in sharing their data for personalized  experiences and they have adopted mobile and digital technologies to  match or even beat the developed APAC.<|endoftext|>Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 4

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 COVID-induced drop in economy was succeeded  with accelerated growth The immediate impact of COVID was the  restrictive government policies and reduction  of economic activity. The GDP for the emerging  South-East Asia dropped by 4.3% in 2020 from  2019 levels and recovered only the next year  2021. Despite the recovery with accelerated  GDP growth at 8.0%, the GDP will not reach  the pre-COVID growth trajectory before 2025.1 China has been the principal driver for  economic growth in Asia and its restrictive  COVID policies extended the depressed  economic growth. The sudden loosening of  China’s restrictions has resulted in a mixed  immediate response. We expect that eventually  the loosened policies will re-accelerate its  economic engine bringing growth for the entire  region. Furthermore, the war in Ukraine and  resulting sanctions has led to further reduction  of growth prospects; South-East Asia is  geographically relatively far away from the war,  but the impacts to trade, food and energy have  extended to the region.2 OPERATING ENVIRONMENT CHANGES 1,289 535 402 434 414 2,497 2,668 2,849 2,727 2,942 3,178 3,441 3,698 3,995 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 2017 2018 2019 2020 2021 2022 2023 2024 2025 Emerging South-East Asia GDP by country  Vietnam Malaysia Philippines Thailand Indonesia B USD +6.8% +8.0% +7.9% -4.3% The others include Myanmar, Cambodia and Laos.<|endoftext|>KEY ACTIONS FOR INSURERS ✓ Prepare for growth: SEA economies will  exceed pre-pandemic growth rates.<|endoftext|>✓ Use scenario-based business planning:  Discrete world events dramatically impact  the macro-economic environment.<|endoftext|>Thriving in the Post-Covid  Insurance Growth © 2023 Infosys Consulting 5

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 Out of the South-East Asian markets, we  analyzed Indonesia, Thailand, Malaysia,  Vietnam, and the Philippines which constitute  97% of the region’s GDP. The COVID-induced  financial hardship led to an overall reduced  spending on insurance. Pre-COVID, from 2016  to 2019, the total GWP had grown 7.1%  annually (in USD). From 2019 to 2020 it shrank  by 1.1%. Post-COVID, in 2021, the insurance  spending increased by 6.8%.3, 4, 5, 6, 7 We are forecasting the GWP to grow 9-11%  year-over-year until 2025 aligned with the  elevated GDP growth. Especially Vietnam and  Indonesia are expected to be the growth  drivers contributing ~50% of the total growth  of the 5 countries.  OPERATING ENVIRONMENT CHANGES KEY ACTIONS FOR INSURERS ✓ Focus on growth markets: Especially  Vietnam and Indonesia.<|endoftext|>✓ Proactive pricing: Inflation-driven growth  needs active management of policy prices;  adjust policy price review cadence to  match the increased claim costs and  market requirements.<|endoftext|>✓ Differentiated product adjustments:  Increase prices for premium products  which are less price-sensitive; reduce the  coverage and therefore the exposure of  basic products to alleviate price increase  pressure of highly price-sensitive customer  groups.<|endoftext|>16.9 19.1 18.6 19.4 17.5 17.3 14.0 14.1 15.6 16.6 16.8 17.9 5.1 5.2 5.6 5.8 6.0 8.3 22.1 24.4 26.7 27.7 27.1 27.7 3.9 4.7 5.8 6.9 8.1 9.5 27.6 25.1 10.2 34.9 18.7 0 5 10 15 20 25 30 35 40 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 GWP in SEA emerging markets Vietnam Malaysia Philippines Thailand Indonesia B USD Thriving in the Post-Covid  Insurance Growth © 2023 Infosys Consulting 6

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 OPERATING ENVIRONMENT CHANGES The 2020 dip in GWP resulted in higher  insurance penetration as the GDP declined  faster than the GWP. We forecast mild  insurance penetration development in all  countries except for Vietnam. Vietnam’s  insurance penetration is expected to grow by  30% by 2025 driven by current low baseline,  strong economic recovery, legalization of  online insurance, urbanization, growing middle  class population, and easier access to insurance  especially through the bancassurance channel.8 GWP growth trend and forecast Annual GWP Growth Value-add B USD  (22-25) Country 2016-2019 2019-2020 2020-2021 Forecast 22-25 Indonesia 4.5% -9.7% -1.1% 9% – 12% 8.7 – 10.4 Malaysia 5.8% 1.2% 6.6% 8% – 9% 7.2 – 8.0 Philippines 4.2% 4.0% 36.7% 6% – 10% 1.9 – 3.4 Thailand 7.8% -1.9% 2.1% ~6% 7.2 – 8.0 Vietnam 20.9% 17.0% 18.0% 18% – 20% 9.1 – 10.1 Total 7.1% -1.1% 6.8% 9% – 11% 34 – 40 Insurance penetration  (GWP / GDP) Country 2019 2021 2025 FC Thailand 5.08% 5.39% 5.4% Malaysia 4.53% 4.52% 4.6% Vietnam 2.10% 2.60% 3.3% Philippines 1.54% 2.10% 2.1% Indonesia 1.73% 1.46% 1.7% Insurance penetration forecast Thriving in the Post-Covid  Insurance Growth © 2023 Infosys Consulting 7 GWP forecast model Macroeconomic drivers • GDP (USD) • Population • GDP / capita (USD) • Inflation • Unemployment Insurance market • Gross Written  Premium • Insurance  Penetration Driver-Based Model Forecast • 2 macro-economic  driver models:  insurance penetration  and insurance density • Models based on  2015-2021, excluding  2020 (COVID year) • P-value for both  models <0.005 • GWP model is a  weighted average of  both models for best  fit against actuals • GWP forecast based  on the driver-based  model applied on  IMF’s macro- economic forecast  (October 2022) • Insurance penetration  and density  calculated based on  forecast GWP against  IMF’s relevant macro  drivers, GDP and  population

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 OPERATING ENVIRONMENT CHANGES Our model suggests that the insurance density  continues to develop largely at pre-COVID  rates. Vietnam is the only country in our model  that is expected to see significant take-off from  its peers, Indonesia, and the Philippines.  The population who are insured will depend on  insurance types and countries. For example, in  Thailand, 75% of the population are covered by  health insurance and the rest are covered by  national healthcare systems. In the Philippines  and Vietnam, circa 90% of the population are  covered by national health insurance. In  Malaysia and Indonesia on the other hand, over  50% and 35% of the population do not have  health coverage, respectively.9, 10, 11, 12, 13 In summary, while COVID induced a bump in  the road, we forecast that the future growth is  40% faster compared to pre-COVID. The  growth is driven by increased digital adoption  promoting easier access, urbanization and the  growth of middle class generating more  demand, increased interest towards health and  life insurance due to the pandemic.<|endoftext|>66 73 71 442 440 482 509 514 546 53 54 56 320 352 384 397 389 396 42 51 71 83 64 98 732 88 496 97 184 0 100 200 300 400 500 600 700 800 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Insurance density in SEA emerging markets (GWP / person) USD Vietnam Malaysia Philippines Thailand Indonesia KEY ACTIONS FOR INSURERS ✓ Reap the growth now, as the pandemic is  still fresh in memory.<|endoftext|>✓ Seize the opportunity in growth markets  especially in growing urban middle class.<|endoftext|>✓ Focus on reach and easy-to-understand  offerings in underinsured markets.<|endoftext|>Thriving in the Post-Covid  Insurance Growth © 2023 Infosys Consulting 8

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 Three years of digitalization in three months CHANGED CONSUMER PREFERENCES Overall, COVID increased the attention to  insurance, especially health and life products.  The persistence of COVID, with its several  waves and increasing number of variants, has  kept health topics, including insurance, in the  public discourse. Not all news has been positive  though, e.g., regarding the insurers’ inability to  pay the claims, or rehabilitation of insurers  facing bankruptcy. Despite the controversies,  we see that the demand for insurance has  grown in the region.<|endoftext|>Firstly, COVID deeply changed the way how  people behave and what they expect. In  general, it forced everyone to adopt digital  channels one way or another. Secondly, the  impacts of COVID were very personal in nature;  we see different response between user groups  depending on how they were impacted by  COVID. In the next sub-chapters, we address  both effects and then summarize the best  practices for insurers.<|endoftext|>Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 9

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 COVID doubled digital channel adoption in a  single year CHANGED CONSUMER PREFERENCES Working from home and social distancing  measures led consumers to adopt digital  technologies much faster than anticipated pre- COVID. In many aspects, the emerging APAC  markets have surpassed the developed APAC  markets in digital adoption. For example, in  2022, 43% of people in the emerging markets  managed their policies digitally, when only 23%  in the developed markets do so.  In financial  services in the emerging Asia-Pacific, digital  banking usage nearly doubled from 55% to  88% of the population from 2017 to 2021. While  many respondents to surveys say that they are  interested in buying insurance through an  online channel, only 25% of those willing to buy  the insurance online actually do so. The  blockers include limited online channel, and  difficulties to use the channel.14, 15, 16 Digital insurance adoption may have been  inhibited by the regulatory restrictions, e.g., in  Thailand and Vietnam online insurance sales  has been limited by the regulator. Philippines  on the other hand has seen doubling of the  online channel preference as the principal  interaction channel from under 30% to more  than 60% from pre- to post-COVID.17 In emerging South-East Asia, the digital  channel effectively means the mobile channel.  Due to limitations of public infrastructure, the  smartphone is the principal tool to access the  Internet and online services in both urban and  rural areas. The digital channel is not limited to  direct channel; consumers are expecting digital  interactions embedded with the human  interaction with an agent or a broker. Nearly  half of the people in the region say that they  would want at least some human interaction  when they are purchasing new policies.   Omnichannel interactions where one part of  the customer’s journey is digital, and another  part is handled through traditional channels are  even more important during the transitioning  and resetting into the post-COVID World.18 55% 20% 16% 18% 28% 60% 1% 2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Pre-covid Post-covid Philippines insurance customers'  channel preference In person By phone Digitally Other KEY ACTIONS FOR INSURERS ✓ Double down efforts on digital channels,  especially mobile.<|endoftext|>✓ Extend digitalization through the agent and  broker channels.<|endoftext|>✓ Build omnichannel capabilities for seamless  customer journeys across the digital


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 and  non-digital touchpoints.<|endoftext|>Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 10

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 COVID is a strong use case of benefits of  behavioral segmentation CHANGED CONSUMER PREFERENCES Some people were financially relatively  unimpacted by COVID, while others might have  needed to tap into their savings, lose a job, or  make other adjustments in their life. E.g., in the  Philippines, unemployment doubled from 5.1%  to 10.4% from 2019 to 2020. The ones whom  COVID most impacted were 5-10% more  interested to acquire insurance than their less  impacted peers. Very importantly, only 50% of  people who were negatively impacted by  COVID were interested in sharing their  personal data for personalized pricing, while  80% of those who were less impacted were  willing to share that detail. Depending on the  country, 66-82% of the respondents in  Emerging South-East Asia were willing to share  personal data to get a customized insurance  plan.9, 19 80% 50% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Less impacted by COVID More impacted by COVID Philippines insurance customers’  willingness to share personal data  for personalized price Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 11

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 CHANGED CONSUMER PREFERENCES COVID induced a wave of insurance  terminations, but also new policies. For  example, in Philippines Life Insurance, the  switching increased by 35% from pre-COVID  levels. Study in USA examined similar switching  behavior and identified that price, experience,  and product to be the most significant reasons  for switching the insurance. The same was  applicable for both Life and Non-Life.  This  switching behavior can be forecasted and  prevented using advanced behavioral  models.20 0 200 400 600 800 1,000 1,200 1,400 1,600 0% 5% 10% 15% 20% 25% 2017 2018 2019 2020 2021 Philippines Life Insurance Policies Policies in effect (end of year) New policies Terminated policies Switches (est) +35% Count of policies,  x1,000 New & terminated policies,  % of total KEY ACTIONS FOR INSURERS ✓ Apply dynamic pricing and contextual offers to  increase conversion and average policy value ✓ Use AI and customer behavioral models to  predict and prevent customer churn Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 12

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 Customer experience drivers that make an impact CHANGED CONSUMER PREFERENCES Advances in digitalization enable 5 key  customer experience trends: personalization,  Internet of Things, immediate response,  ecosystem offering, and product innovation. All  the trends have been further accelerated due  to the digital adoption by both customers and  insurers. Insurers who succeed in customer  experience can expect up to 15% increased  premium income and 10-40% reduction of  operating expenses compared to their less  successful peers.21 Personalization covers topics such as  targeted marketing, product tailoring /  bundling, dynamic pricing and policy  administration. Data-driven approaches allow  individual customer-specific tailoring as long as  the marketing materials, products, prices,  customer journeys, and other content or  processes are parametrized in such way that an  algorithm can define the appropriate approach  based on targeted customer’s information.  Personalization improves reach, increases click- through rates and conversion, number of  policies per customer, and the average value of  the policies.  Internet of Things is typically used to  gather health and usage related information  e.g., from smartwatch, smartphone or car’s  systems. This influx of data will enable  improved targeting and customer risk  assessments. With customer’s consent and  suitable apps, the same data can be used e.g.,  to alert when accidents occur, identify fraud,  collect details for claim application, and  recommend medical visits for preventive  health. IOT is currently a nice-to-have value- add, but it will be more pervasive across the  insurance value chain as the IOT devices will  become more prevalent. The pioneering  customers are already asking and expecting  insurance products to collect their data for  tailored pricing.  Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 13

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 CHANGED CONSUMER PREFERENCES Immediate response is the customer’s  experience of straight-through processing.  Whether the process in underwriting or claim  handling, customers are increasingly expecting  immediate responses. The customer  expectations of the digital world arise from  leading non-insurance digital services, e.g.,  Netflix provisions all the content immediately  after subscription; Grab will immediately tell  the car and driver’s details including estimated  time of arrival once the ride is ordered. These  expectations are liquid: customers expect them  from all digital services, and increasingly also  from the B2B interactions they have. Process  mining, automation, digital applications, e- KYC, e-Signatures, intelligent assessment of  customers claims, and automated fraud checks  are a few opportunities insurers are pursuing to  improve their response times. Operational  uplifts focus on turn-around time, but they also  reduce manual effort, operational cost, and  improve the customer experience of each  transaction.  Ecosystem enables insurers to serve their  customers as a part of a larger ecosystem.  Insurers’ typical partners include banks as a  distribution channel for bancassurance.  Insurance ecosystem may extend to Insurtech,  3rd party data exchanges / provision, customer  risk analyses, white labeled underwriting, retail  and business collaboration for distributing  bundled insurance products, alliances between  healthcare and insurance, financial  consolidation / asset management. The  ecosystem will need a robust technology  platform to facilitate the layered exchanges  through APIs; it might be that the platform  provider is yet another 3rd party in the  ecosystem. Ecosystem and platform offerings  will require careful disaggregation of the  business model; targeted white-label products  and services focusing on volume and efficiency,  whereas holistic service provision requires  market leading customer experience layer and  plethora of enticing offers from the ecosystem.  Ecosystems enable growth and efficiency  based on where the insurer wants to focus.  Product innovation is supercharged by  digital capabilities. New digital technologies  enable e.g., usage-based pricing, modular  offerings, parametrized products,  disaggregated insurance policies, and low- value micro insurances. Further, digitalization  enables supercharging the product innovation  and market testing processes e.g., through  simulation and automated A/B testing. We  have witnessed that a range of specific,  customer-friendly insurance policies have  enabled faster growth compared to policies  with extensive and difficult-to-understand  coverage. In the emerging markets with limited  insurance literacy, simplification and  concreteness have been successful. Most  market-responsive insurers were able to  provide targeted health insurance products for  COVID and for the potential side effects of  COVID vaccinations.<|endoftext|>KEY ACTIONS FOR INSURERS ✓ Focus on customer experience with a  dedicated team owning the Customer  Experience end-to-end ✓ Innovate and launch new products to  market alone or as a part of an ecosystem ✓ Operational excellence is a driver for  customer experience  Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 14

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 Selected high-performing insurers and their growth relative to market True stories of driving insurance growth from the  market SUCCEEDING IN THE NEXT NORMAL In 2020, businesses needed to quickly respond  to the abruptly changed business environment.  Financially, the insurers saw increased claims  and general downturn in sales. At operational  level, working from home policies mandated a  massive shift in remote working forcing the  insurers to open the company’s private on- premises network to be accessible remotely.  That shift in connectivity digitalized parts of  many customer-facing and back-end processes  resulting in hybrid workflows. Essentially,  COVID accelerated insurers’ digital  transformation plans from 3 years to 3 months.  The most successful insurers were able to  capitalize on digital, mobile-first channels  when interacting with their customers. They  were able to retrain their workforce to use the  new digital technologies and utilize agile ways  of working to seize the opportunities as they  arose. Furthermore, leveraging partnerships  helped the customers to gain access to services  bringing value for the entire ecosystem.<|endoftext|>We analyzed Philippines, Malaysia and Thailand  markets to identify the leaders through COVID.  We highlight 3 success stories showcasing  growth through the pandemic and gain of  market share in their respective


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 markets.  Insurer Country Segment CAGR (2017-2021) Company  growth  relative to  segment Growth Drivers Company Segment Personalized  CX New Product  Innovation Distribution &  Ecosystem Prudential Thailand Life 7.5% 0.2% 47x ✓ ✓ AIA Thailand Life 4.4% 0.2% 28x ✓ ✓ ✓ Etiqa Malaysia Non-Life 7.3% 0.5% 13x ✓ ✓ ✓ Allianz Malaysia Non-Life 3.1% 0.5% 5.8x ✓ ✓ ✓ Malayan Philippines Non-Life 12.7% 2.7% 4.8x ✓ ✓ Allianz Philippines Life 54.9% 11.8% 4.7x ✓ ✓ ✓ FWD Philippines Life 43.4% 11.8% 3.7x ✓ ✓ ✓ Pioneer Philippines Non-Life 9.5% 2.7% 3.6x ✓ ✓ Bangkok Thailand Non-Life 10.5% 4.7% 2.2x ✓ ✓ Dhipaya Thailand Non-Life 10.0% 4.7% 2.1x ✓ ✓ Etiqa Malaysia Life 13.9% 7.0% 2.0x ✓ ✓ Allianz Malaysia Life 11.7% 7.0% 1.7x ✓ ✓ ✓ Prudential Malaysia Life 8.7% 7.0% 1.3x ✓ ✓ Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 15 The insurers presented in the table have significant size in their market and market-beating growth rate. It will  therefore leave fast-growing companies out that are comparatively small in the market. Information is collated from  each country’s official insurance statistics and may differ from companies’ own annual reports.<|endoftext|>

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 3.8  4.0  4.1  4.2  4.5  17.9  18.7  18.1  17.7  18.0  0 2 4 6 8 10 12 14 16 18 20 2017 2018 2019 2020 2021 Thailand Life Insurers GWP Success Story – AIA, Thailand SUCCEEDING IN THE NEXT NORMAL Thailand is the largest insurance market in  ASEAN. Its insurance penetration reached  5.4% in 2021, highest among its peer countries.  Its GWP has grown at a CAGR of 2.9% from  2017 to 2021.  The life insurance segment in Thailand  contributes close to 75% of the overall GWP in  Thailand.  However, the progress of the life  segment has been tumultuous with 0.1%  CAGR. 2021 showed 2.0% GWP growth after  two consecutive years of decline.<|endoftext|>The largest insurer in the industry, AIA  Thailand, was also the fastest growing during  the period. Its GWP grew at 3.5% CAGR,  increasing its market share from 21% to 25%.<|endoftext|>AIA Thailand’s success can be attributed to  three key strategic initiatives: shift towards  higher margin products, tech-driven agency  development programs and digitalized  customer experience.  AIA made a strategic shift towards selling higher margin products such as unit-linked  and long-term protection products which  became more popular due to pandemic. As a  result, in 2021, AIA Thailand’s profitability from  the life segment improved by 19 percentage  points compared to the previous year, from  71% to 90%. AIA also shrewdly used bundling  strategies to gain additional revenue. It  generated 20 M USD additional revenue by  cross-selling its protection products to the  17,000+ customers looking for COVID vaccine  side-effect protection.22 Others B USD 4.4% -0.1% 2.6%* -8.5% 0.1% CAGR Thailand 2.4% 4.4% * - FWD Thailand acquired Siam City Insurance in 2019.  -5.9% -5.6% 7.5% Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 16

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 SUCCEEDING IN THE NEXT NORMAL AIA deployed digital solutions for agency  productivity and quality improvements. Its  agency talent development program embeds  analytics throughout the agency's  development lifecycle. Its award-winning talent  development program, provides a one-stop  solution with a digitalized and seamless  experience from prospecting, candidate  assessment and selection, to personalized  coaching and developmental programs.  Through this, they can identify high-potential  agents early and create customized support for  their retention and continuous development.23 AIA strives to become Thailand’s first digital  insurer with an omnichannel digital customer  experiences to serve new and existing  customers. Besides telehealth and  telemedicine program, it launched ALive, a  personal assistant app for underserved young  families (18-34 years old) segment. Also  available for non-AIA customers, its users have  access to a wide range of services and  community for parenting. The app had over a  million downloads with a rating of 4.5/5.0 on  Play Store. The app generated 20% online to  offline leads and reactivated dormant  customers to drive sales.24 AIA iService App has also brought substantial  operational efficiencies. Through the iService  app, customers can manage their own policies  and make claims. AIA was able to resolve 76%  of the minor health claims within the same day  as of 2021.25, 22 KEY ACTIONS FOR INSURERS ✓ Identify underserved customer segments to  create outcome-based offerings with a pull- based sales model ✓ Employ HR analytics to identify high- potential talent and handhold them with AI- powered learning paths for sustained agent  productivity ✓ Use agency management platforms for  agency differentiation, to drive higher  productivity and improved agent retention Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 17

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 SUCCESS STORY – FWD, Philippines SUCCEEDING IN THE NEXT NORMAL The Philippines’ insurance penetration has  hovered around the 1.6%. However, the  pandemic caused a step-change in insurance  purchases leading to insurance penetration  increasing to 2.1% in 2021. The step-change  included; life insurance growth averaged 11.8%  CAGR.   FWD life insurance’s GWP has grown close to  four times faster than the market, at 43.4%  CAGR, increasing its market share from 2% in  2016 to 6% in 2021. It has become the 6th  largest life insurer in the Philippines. This  remarkable, continuous growth was built on  three key pillars: creating innovative holistic  product solutions, increasing accessibility  through ecosystems and partnerships, and  utilizing digital technologies for superior  customer experience.  Thriving in the Post-Covid  Insurance Growth © 2023 Infosys Consulting 18 0.09 0.15 0.18 0.28 0.38 4.0 4.4 4.5 5.0 6.3 0 1 2 3 4 5 6 7 2017 2018 2019 2020 2021 Philippines Life Insurance GWP B USD 43.4% 17.3% CAGR 54.9% -3.7% 19.2% 11.0% 9.9% 7.5% 11.8% Others Philippines Success Story – FWD, Philippines

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 SUCCEEDING IN THE NEXT NORMAL Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 19 In 2021, FWD introduced new holistic product  solutions like ‘Babyproof’, ‘Family Hero’,  ‘Manifest’, and ‘Health and Wellbeing’ that  catered to end-to-end consumer needs. These  products targeted the young adults and  families and were promoted extensively on  digital channels to increase their accessibility  during the pandemic. These tailored products  targeted consumers who were relatively new in  their insurance journey and provided guidance  on how to build and secure long term wealth.26 FWD built multiple partnerships to increase  product distribution. For example, the  partnered with a pawnshop chain to make  affordable insurance plans and digital solutions  available to the pawnshop’s 30 million  customers across its 2,500 branches  nationwide. In another partnership with  insurance aggregator Kwik


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.Insure, FWD  introduced a chatbot, “Fi”, in its customer  servicing processes. The chatbot can handle  customer product enquiries, product  recommendation, agent appointments, and  claims activities. The chatbot received a  customer rating of 4.9/5 and increased  operational efficiency by freeing agents to  focus on more complex tasks.26 KEY ACTIONS FOR INSURERS ✓ Take advantage of bundling and unbundling  products to create targeted and tailored  offerings ✓ Forge partnerships to increase sales beyond  traditional channels ✓ Use self-help tools, like chatbots and AI, to  improve customer experiences while also  realizing operational efficiencies

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 0.51  0.57  0.64  0.70  0.80  7.1 7.5 8.1 8.6 9.3 0 1 2 3 4 5 6 7 8 9 10 2017 2018 2019 2020 2021 Malaysia Life Insurers GWP Success Story – Allianz Life, Malaysia SUCCEEDING IN THE NEXT NORMAL Malaysia Malaysia is the second largest insurance  market in the ASEAN region after Thailand.  Close to 70%  of the total 18.3 B USD GWP in  2021 is Life insurance with CAGR of 5.5%.  Malaysian life insurance growth was driven by  increased demand during COVID and ability of  insurers to sell and provide services digitally.  Among the biggest 5 life insurers, Allianz was  the fastest growing insurer with a CAGR of  9.2% from 2017 to 2021, roughly twice faster  than the market. Its market share improved  from 7% to 9% in the same period.27 There were three major drivers contributing to  its outperformance: launch of new innovative  offerings, digitalization of processes, and a  variety of agency development programs.<|endoftext|>Innovative new offerings were launched by  Allianz that targeted the evolving customer  needs and contained minimal negative  surprises. In 2021, they launched the  ‘PreciousCover’ and ‘BabyCover’ that provided  coverage for mother and child through pre- and post-natal period with added benefits such  as mental health coverage, hospitalization  benefits and juvenile critical illness. It also  launched endowment products that had  simplified underwriting and guaranteed  acceptance rules to address customer  hesitance during the pandemic. Allianz also  participated in a government-endorsed micro- insurance program, Perlindungan Tenang,  which increased penetration in the bottom  40% households primarily via digital channels.27 Others B USD 4.8% 13.9% 1.4% 11.6% 5.7% 8.7% 6.9% 7.0% CAGR Thriving in the Post-Covid  Insurance Growth © 2023 Infosys Consulting 20

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 SUCCEEDING IN THE NEXT NORMAL Digitalization of processes was also critical,  especially during the COVID, where Allianz  could quickly pivot to digital distribution and  policy admin. It enabled end-to-end digital  claims experience from submission to  reimbursement through its MyAllianz customer  portal and mobile app. Customers could also  access their medical cards and guarantee  letters at any time via the mobile app. It  incorporated OCR, facial recognition and video  call option in its KYC processes which allowed  their agents to remotely perform an end-to- end customer onboarding in just five minutes  for non-complex cases.27 This digitalization initiative was extended to its  agency development programs. Agency  partners contributed 70+% of the written  premiums for Allianz. The insurer launched a  series of online training sessions on remote  sales, product training, digital marketing, use of  digital tools, and soft skills to uplift agent  productivity. Their agency partners valued the  trainings with average attendance of 800  agents per session. To make the agency partner  growth more sustainable, Allianz Life also  launched a 24-month “C.E.O Program” in 2019  for its agency partners to build a quality talent  pipeline and enhance their capabilities.28 KEY ACTIONS FOR INSURERS ✓ Use needs-based analysis to design new  product offerings ✓ Address customer hesitance for online  purchases by simplifying product offerings  and removing negative surprises ✓ Use automation & AI-based tools for routine  tasks to reduce turnaround times  ✓ Actively engage agency partners and new  partnership models to enhance productivity  and product accessibility Thriving in the Post-Covid  Insurance Growth © 2023 Infosys Consulting 21

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 We recommend a customer-experience driven  strategy The best way for insurers to achieve market- beating growth in emerging South-East Asian  markets is to double down on personalized  customer experience, digital omnichannel  across the E2E customer journey and  customer-friendly product innovation. The  success stories highlighted further concretize  the recommendation justified by the global  and regional trends. There are 6 key areas for  insurers to embark on this journey.  We have witnessed massive growth for insurers  who have implemented all or parts of the  above actions. The requirements and  prioritization depend on the insurer, market,  and most importantly, leadership ambition.  Infosys Consulting is the partner of choice for  insurers seeking transformations, whether  laser-focused interventions or enterprise-wide  step-changes.<|endoftext|>1 2 3 Define a customer-experience- led growth strategy Design the to-be customer  experience Lead ecosystems for growth 4 5 6 Implement product innovation  at scale Define the to-be technologies  needed Design the to-be processes and  operating model RECOMMENDATIONS FOR INSURERS Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 22

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 Infosys Consulting approach to customer-experience driven strategy Strategy Customer experience Target customer segments… Persona modelling (who) Goals Needs Expectations Preferences Operating model Culture Technology & Data Organization & Roles Talent Ways of Working Processes Governance KPIs & Control Engaging with the insurer along their journey… Omnichannel journey design …at touchpoints, across channels Not exhaustive Direct Agent Broker Portal 3rd pty I discover I compare & decide I onboard I claim I manage I pay I sign up for more I advocate I stop Web Wearables App Phone call Video call Mail API In person Social 1 Define a customer-experience-led  growth strategy Articulate the leadership ambition for  customer experience vision relative to your  market competition for each customer  segment. Set concrete goals for growth,  market share, NPS, customers’ brand  perception and ecosystem participation.  Prepare the growth-focused business case to  justify investments needed for the customer  experience uplift. Define a concrete roadmap  ahead.<|endoftext|>2 Design the to-be customer  experience Define the to-be end-to-end customer journeys  across the touchpoints that would realize the  customer experience vision. Define levels of  personalization and contextualization expected  for every interaction from marketing to  processes, products, and pricing. Do not  overlook the enterprise and SME customer  journeys. Prioritize growth-driving customer  experience of marketing, sales, and  distribution. To-be customer experience sets  requirements for the insurers’ operations  especially around technology, data, processes,  and people. Prioritize the requirements based  on the overall customer experience uplift  potential against the strategic growth goals.<|endoftext|>RECOMMENDATIONS FOR INSURERS Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 23

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 RECOMMENDATIONS FOR INSURERS 3 Lead ecosystems for growth Identify the ecosystem vision articulating the  two sided of ecosystem strategy: what is the  insurance company centric ecosystem, and, on  the other hand, what roles the insurer takes in  ecosystems of others. Define the experience  for agents, brokers, banks, healthcare, repair  shops, and any other relevant partners in the  ecosystem. Focus the strategy on growth  drivers, especially around marketing presence,  distribution channels, customer experience,  and product mix. When creating an insurance- centric ecosystem, define the business model  for partnering. Define the technology platform  required to realize the ecosystem ambition.<|endoftext|>5 Define the to-be technologies  needed Technology and data changes are the concrete  steps in the customer-experience driven  transformation. The technology and data  architecture need to be designed to fulfil the  customer experience requirements. Especially  the personalization, product innovation, and  omnichannel requirements will likely require  legacy technology uplifts. Data will be the key  enabler for the personalized experiences; data  supply chains from sources to databases to  analysis and usage will be crucial for realizing  the growth. Define the data requirements;  design the data engineering and data science  practices and systems required.<|endoftext|>4 Implement product


Continue # Infosys POV
 innovation at  scale New, customer-friendly insurance products are  easy to design on paper, but legacy systems  and processes might hinder their realization.  Set up an innovation pipeline with  industrialized approach for each of the stages  from idea incubation to prototyping, market  testing, market launch and scaling. Product  portfolio requirements will increase  substantially from modularization,  disaggregation, parametrization, and  personalization. Define requirements for  technology and data to realize the new  products.<|endoftext|>6 Design the to-be processes and  operating model Powered with the new technology, design the  to-be processes to realize the target customer  experience. Focus providing near-immediate  turn-around time for all customer-facing  activities through process elimination,  simplification, automation, and parallelization.  Support the own and 3rd party manual  processes, e.g., with AI image analysis, next- best action, recommendation engines, and  price calculators. Define the new capabilities  and roles needed, set training paths, and  recalibrate staffing needed to operate the new  processes.<|endoftext|>Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 24

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 1.<|endoftext|>https://www.imf.org/en/Publications/WEO/weo-database/2022/October 2. https://www.imf.org/en/Blogs/Articles/2022/10/13/asia-sails-into-headwinds-from-rate-hikes- war-and-china-slowdown 3.<|endoftext|>https://stats.oecd.org/Index.aspx?QueryId=25444 4. https://www.insurance.gov.ph/ 5. https://www.bakermckenzie.com/-/media/files/locations/thailand/insurance-outlook-14th- edition.pdf 6. https://www.lexology.com/library/detail.aspx?g=7ce23ebe-600e-482d-aeb8-fe8e386c498c 7.<|endoftext|>https://mof.gov.vn/webcenter/portal/btcvn 8. https://www.febis.org/2022/04/01/vietnam-s-insurance-market-to-see-double-digit-growth-in- 2022/  9. https://equityhealthj.biomedcentral.com/articles/10.1186/s12939-021-01578-0  10. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6008596/ 11. https://www.globaldata.com/media/insurance/general-insurance-industry-vietnam-reach-3- 5bn-2026-forecasts-globaldata/  12. https://pubmed.ncbi.nlm.nih.gov/33853361/  13. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9532955/#:~:text=Results%3A%20The%20pre valence%20of%20health,the%20Indonesian%20population%20is%2062.3%25.  14. https://services.google.com/fh/files/misc/e_conomy_sea_2022_report.pdf 15. https://www.swissre.com/reinsurance/life-and-health/l-h-risk-trends/consumers-embrace- digitalisation-points-better-protected-future.html  16. https://www.mckinsey.com/industries/financial-services/our-insights/emerging-markets-leap- forward-in-digital-banking-innovation-and-adoption  17. https://www.ey.com/en_ph/insurance/why-insurers-must-adapt-to-meet-the-changing- philippine-landscap 18. https://www.swissre.com/dam/jcr:f5cfd028-b7c9-4958-a5c3-06f7d2e720fc/ep_en_digital- adoption-in-personal-pc-insurance-in-southern-asia-webb.pdf 19. https://www2.deloitte.com/content/dam/Deloitte/sg/Documents/consumer-business/sea-cb- gacs-study-perspective.pdf 20. https://www.bain.com/insights/how-insurance-customers-are-responding-to-COVID/  21. https://insuranceblog.accenture.com/reimagining-end-to-end-customer-experience-drive- growth  REFERENCES Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 25

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 REFERENCES 22. https://www.aia.com/content/dam/group/en/docs/annual-report/Annual Report  2021_E.pdf.coredownload.inline.pdf 23. https://www.aia.com.hk/en/about-aia/about-us/media-centre/press-releases/2022/aia-press- release-20221014 24. https://www.the-digital-insurer.com/award-application/aia-thailand-alive-powered-by-aia/ 25. https://www.bangkokpost.com/business/2286146/aia-aiming-to-help-1bn-people-across-asia- to-live-healthier-longer-better-lives-by-2030 26. https://www.fwd.com.ph/-/media/pdf/documents/fwd-ph-annual-report-2021- 2.pdf?rev=20b476bd356540fe93fb6a0b02ccb947 27. https://www.allianz.com.my/content/dam/onemarketing/azmb/wwwallianzcommy/pdf/financia l-reports/annual-reports/AllianzAnnualReport2021.pdffwd-ph-annual-report-2021-2.pdf 28. https://www.allianz.com.my/content/dam/onemarketing/azmb/wwwallianzcommy/personal/ca mpaigns/allianz-ceo-programme/AllianzCEOProgrammeBrochure_EN.pdf Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 26

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 JITIN SHARMA Associate Partner Singapore +65 8849 7197 Jitin.Sharma@infosysconsulting.com SAGAR ROONGTA Consultant Singapore +65 8264 6036 Sagar.Roongta@infosysconsulting.com MEET THE EXPERTS AARO KAUPPINEN Principal Singapore +65 8870 2590 Aaro.Kauppinen@infosysconsulting.com Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 27

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 consulting@Infosys.com InfosysConsultingInsights.com LinkedIn: /company/infosysconsulting Twitter: @infosysconsltng About Infosys Consulting  Infosys Consulting is a global management consulting firm helping some of the world’s most recognizable  brands transform and innovate. Our consultants are industry experts that lead complex change agendas  driven by disruptive technology. With offices in 20 countries and backed by the power of the global Infosys  brand, our teams help the C-suite navigate today’s digital landscape to win market share and create  shareholder value for lasting competitive advantage. To see our ideas in action, or to join a new type of  consulting firm, visit us at www.InfosysConsultingInsights.com.  For more information, contact consulting@infosys.com  © 2023 Infosys Limited, Bengaluru, India. All Rights Reserved. Infosys believes the information in this  document is accurate as of its publication date; such information is subject to change without notice. Infosys  acknowledges the proprietary rights of other companies to the trademarks, product names, and other such  intellectual property rights mentioned in this document. Except as expressly permitted, neither this document  nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or


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 by any means,  electronic, mechanical, printed, photocopied, recorded or otherwise, without the prior permission of Infosys  Limited and/or any named intellectual property rights holders under this document.

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