Adding Value to Insurance and Takaful Policies

There has been an exponential increase in innovation in the insurance industry over the last several years. This innovation is only expected to increase and leads us to the question of how we, as actuaries, can use our creativity and understanding of insurance to add value to the insurance and takaful industries.

AIA was one of the first to be in the news for their popular AIA Vitality programme. With this programme a participant pays RM10 per month membership fee and then earns points to be used for discounts on insurance/takaful policies. There is an economic aspect of this, such as the cost of membership versus the savings in premiums and other benefits (such as the purchase of healthy foods and gym membership). From an innovation point of view though the interesting aspect is how this convinces policyholders to lead a healthy lifestyle to create a win-win situation for the insurer and the insured.

Takaful Malaysia has also been in the news for its innovation with respect to its employee benefits customers, who can now order their medicines online with free delivery via the doctor2U application. This application provides a service to chat live with a doctor online, doctor home visits (for a fee), ambulance service (Uber/Grab style where you know the cost upfront and can track where your ambulance is) as well as other services such as your medical records online and instantly accessible to the customer. This again provides a win-win situation as it provides valuable services to the participant along with greatly simplified claims processes whereas for the operator it is likely to reduce costs via answering queries online rather than expensive hospital visits and increasing the operator’s engagement with its customers.

The question now is what innovation do we want to see for the future of our insurance and takaful industry and how can we as actuaries get involved? From the biggest picture there are the global Xprize competitions which fund competitions to improve the lives of people worldwide and for the most part make the solutions open source, meaning it can be implemented cheaply rather than being monopolized by large organizations. Such competitions include the global learning Xprize to help children around the world take education into their own hands. As the solutions from this competition take shape it is up to us to extensively include risk management and the use of insurance as well as Islamic concepts which promote the concept of people helping each other such as developing takaful pools to manage risk. Other Xprizes include the IBM Watson AI challenge to bring artificial intelligence to work with humans to solve some of the greatest problems of our times, the ANA Avatar challenge to make the use of avatars to make global expertise available in the most remote locations, the Anu and Javeen women’s safety challenge to use wearables and other devices to create safer communities and the challenges in healthcare to make insulin and other medicines affordable for all.

What can we do today to build innovation into our insurance and takaful products and designs to create win-win solutions for insurers and the communities they serve? Speak to us today!

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