Bots vs Our bodies: Are Singaporeans Able to Go All-Digital for Insurance?
Compared to banking, retail and even F&B, the insurance industry has been hesitant to embrace digitization.
That said COVID-19 was probably the kick the butt insurers needed to get on the cutting edge. Nowadays, Buying insurance online is commonplace – especially when it comes to simple things like travel and auto insurance.
But is it possible that the more complicated types of insurance such as serious illness and health insurance could take the e-commerce route?
MoneySmart asked 562 Singapore respondents how far they are willing to go digital when it comes to insurance. Below is a brief summary of our findings.
Download Bots vs Bodies, MoneySmart's insurance whitepaper, for deep insights.
How do Singaporeans get information about insurance?
Gone are the days when your main source of information on all insurance matters was your friend's financial advisor.
The internet has democratized information, and survey results show: 73% of respondents get their insurance information from financial aggregators like MoneySmart.
In contrast, only 56% of them get their information from the insurer's website, 50% from their advisors, and 27% get their information from social media.
The findings from the respondents' comments provide information about the behavior of digitally savvy customers. Knowing that the internet is both fact and fiction, they rely on trusted sources of information like MoneySmart instead of the less reliable content on social media.
Additionally, clients are likely to check their research online on financial aggregators and insurance websites by validating it with their personal advisors.
Buying insurance online or offline: which do we prefer?
Customers today expect everything to be done online, and insurance is no different. 86% of respondents said they were satisfied with online self-service purchases for insurance products.
But does that give a complete picture? Not necessarily. 91% of respondents say they are satisfied with buying insurance with human advice, the traditional way of buying insurance.
Before you pull out your calculator and tell me it doesn't add up to 100%, yes, you can be part of both camps. If anything, this is a very strong indication that insurance customers prefer a "phygital" experience – a hybrid digital and physical experience.
The reason for this is simple – differences in product complexity. With simple products like auto insurance, we found that customers were more than willing to buy their protection online.
But the more complex insurance products become, the higher the stakes are perceived. In these cases, the advisory support helps insurance customers feel comfortable and ensure a higher success rate in the event of a claim.
What about insurance claims?
Buying insurance is one thing, but getting it is a whole different story. This is the area where many of the customer's problems lie and the results speak in favor of consultant assistance as the nature of their claims becomes more complex.
Respondents found that the current Online self-service channels are not enough to answer customer doubts or questions. "One piece of incorrectly submitted information can cost a lot, so I would rather speak to their people than submit the form myself," noted one respondent.
This has to do with the point that self-service claims do not have a 100% success rate and prefers that their personal advisor review claims filing to fill in any loopholes.
A personal contact person is also very helpful after the claim has been reported. “You can track the agent for anything. With online platforms, I don't know who to track when the claims are made, ”said another respondent.
Customers are usually very satisfied and confident when advisors help with document compilation, claims processing and filing. That feeling that someone "inside" is working hard in your best interests nNowhere to be found in digital insurance experiences.
How do Singaporeans treat insurance products differently?
Anyone can tell you that not all insurance products are created equal – as is their complexity. For this study, we surveyed customers in 4 different insurance product categories.
In order from least complex to most complex, with 1 being the least and 4 being the most:
|Degree of complexity||Insurance category|
1. Car insurance (least complex)
When buying car insurance, 73% of customers pay attention to which is the best car insurer. This is compounded by the fact that car insurance is mandatory in Singapore.
It also doesn't require a lot of human interaction, so customers often buy auto insurance digitally. They are similarly satisfied with the digital submission of vehicle insurance claims.
2. Serious illness insurance (less complex)
Customers don't mind window shopping online for serious illness insurance: 63% of them say they are satisfied with online self-service purchases for this type of insurance.
When submitting and processing insurance applications for serious illnesses, however, the results predominantly speak in favor of advice from an advisor, which is preferred by 71% of those surveyed.
Through their consultants, they see more value in checking their submissions for maximum success rates and also their involvement in enforcing their claims for a favorable payout.
3. Household contents insurance (more complex)
Customers felt Home insurance is one of the more complex types of insurance, perhaps because everyone attaches a different value to their home and belongings. Customers who are willing to buy are more likely to turn to their advisor.
The same is true for home contents insurance – 68% of respondents say they make their claims through their advisor, even when digital self-service options are available.
This is due to the complexity of reporting damage to household insurance with many obligations to provide evidence that are easily overlooked when trying to do it yourself.
4. Hospital insurance (most complex)
Due to the complexity of the Singapore health and health insurance system Customers do not want to take out health insurance online, but rather through their advisor and apply for it.
Unless you have personally experienced damage, it is difficult to understand your coverage needs. Risks, amount of premiums and how the reimbursement works. As such, clients are likely to welcome advice from human advisors who have handled actual cases.
Not surprisingly, 74% of respondents prefer to get their hospital insurance through their advisor. Consultants play a valuable role in gathering and compiling the necessary documentation to submit a successful application.
Next: What should insurers do to meet customer needs?
People have overwhelmingly advocated researching and relying on information online before buying Financial aggregators like MoneySmart to meet your information needs. It is noticeable, however, that only half of the respondents use the insurers' own websites to find out about products.
To improve this metric, insurers need to do more transparent and objective, Highlighting exclusions and other relevant information instead of hiding them in the policy documents.
Customers appreciate the convenience of digital services, However, there is a significant need for answering customer doubts and questions online. Insurers should consider bridging this gap through 24/7 support from chatbots and / or human advisors.
Insurers can assume Personalization and consolidation of insurance packages for individuals or familiesso that customers can avoid the headache of keeping track of many moving parts – be it the terms of their plans, the many rewards they need to keep track of, and the separate filing of their claims.
So … bots or bodies? The answer is both. While "bots" do basic tasks such as shopping and simple damage reports, it is human "bodies" that accelerate or increase the success rate of the insurance buying and claiming process.
Compare and buy from MoneySmart for your insurance needs
As we work towards the "phygital" future, MoneySmart can handle your insurance needs above ours Comparison tool, and our Insurance Guide 101. These tools can help you make an informed decision about your insurance needs and ensure that you are getting the best price for your premiums.
Do you have any doubts or questions? There are MoneySmart insurance specialists ready to appease them. To achieve them, you just need to answer 3 questions based on your request and the type of insurance you want to buy. There's also no pressure to commit to a purchase, they're just there to answer your questions.
Download Bots vs Bodies, MoneySmart's insurance whitepaper, for more information and survey results.