What’s Next 2017: Adapt now or die

  • Take advantage of the ecosystem’s simultaneous digitisation for growth
  • Leaders must be given a free hand, boards must have the same transformative vision

 

What’s Next 2017: Adapt now or die

 

“GOING digital is unavoidable. I’m glad to say Takaful Malaysia is the first company to aggressively embark on selling insurance online in Malaysia. Hopefully, in three or four years, we will see returns on our platform,” said Takaful Malaysia Bhd group chief executive officer Mohamed Hassan Kamil.

Hassan was speaking at the What’s Next 2017 Conference on Nov 9 at a session titled Adapt to Disruption Now or Suffer a Slow Death, where he shared Takaful’s digital transformation journey and what it took to get there.

Hassan said that insurers are slow to move online because they are afraid of taking from the rice bowl of their agents. Takaful was forced to sell off its agency workforce about a year ago because of rising costs. According to Hassan, this was a blessing in disguise because it also forced a rethink of the company’s business model.

“I already knew that the only way to have a continued presence in the industry was to go digital,” he said.

The first step in the digital journey was realising that the company did not have the knowledge or skill to transform itself: “Going digital is not just posting what used to be hardcopies of forms online,” he said.

Takaful partnered with software company Fusionex to transform its core software and help with social media marketing. It was able to launch its first product online within six months and within three months of launching sold about 40 million policies on its digital platform.

Hassan pointed out that this was helped by the fact that motor insurance in Malaysia is compulsory and the company did not have to spend a lot of money driving traffic to the platform. Takaful does have to spend more when it comes to non-compulsory insurance plans such as personal accident cover.

This illustrated his point about it taking three parties working in partnership to ensure digital migration is successful – the software company, the social media marketing company, and Takaful itself.

The regulatory environment in Malaysia does still inhibit digital transformation in the financial industry to a certain degree. Roadblocks may take the form of such small things as the requirement for a physical signature on certain types of forms.

Despite this, Hassan said that moving with the times into the digital arena will enable companies to take advantage of the surrounding ecosystem’s digital growth. For example, soon after launching its first digital motor insurance product, Takaful was able to leverage on the massive national motor vehicle information database created by ISM Insurance Services Malaysia Bhd to auto-populate insurance forms with information, cutting down the time and effort potential customers spent filling in forms.

Another factor to take advantage of in Malaysia is that Malaysians are generally underinsured, especially those in rural areas, meaning there is a huge potential customer pool.

“Accessibility is an issue when you have agents because they cannot be everywhere. But even in the villages, people have a smartphone and are connected,” he said.

One major challenge of being fully digital Hassan revealed, is that the older demographic of customers and potential customers have a problem embracing digital. “Some of them don’t even have email addresses and want us to snail mail them a physical copy of their insurance policy,” he quipped.

“We hope they will transform eventually. They cannot continue to resist,” he continued, adding that a total mindset shift is required not only from the company, but also its staff and its customers, for complete digital transformation to be truly successful.

Finally, the only way for digital transformation to take place in a large company, especially a government-linked one, is for the leaders to be given a free hand to direct change. “GLCs get tied down with bureaucracy. You need a supportive board of directors who have the same vision of moving the company forward at a faster pace,” he said.

“Your potential success should be your motivator.”

What’s Next was sponsored by big data and analytics specialist, Fusionex International, Malaysia Digital Economy Corporation (MDEC), Maxis Bhd and Anaplan. Accenture Malaysia was Knowledge Partner, iTrain as Training Partner, Leaderonomics as Leadership Partner and Ansible Malaysia as Digital Partner. BFM was the Media Partner.

 

Related stories:

What’s Next 2017: Malaysia Reimagined

What's Next 2017: Banks waking up to disruptive nightmare from outside the industry

Prudential teams up with SFA to offer fintech startups free coverage for a year

 

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