Market newcomer FWD Insurance has already disrupted the Philippine insurance sector with its innovative IT developments as the company looks to change t...
The Philippine life insurance industry is poised to post one of the fastest growth rates in the next nine years among emerging markets, and is expected to register a compound annual growth rate (CAGR) of 9.1% from 2017 to 2025.
FWD Life Insurance is certainly looking to leverage on this predicted growth, as Rogelio ‘Nooky’ Umali, CTO, explains: “There’s a distrust of insurance companies – only about 3% of Philippines have life insurance. This is a market prime for FWD because we are changing that perception.”
Indeed, a 97% market penetration opportunity is one that will appeal to any company. FWD Insurance’s advantage is how it utilises disruptive IT to offer unique products to its clients, as well as offering them first-class customer service.
Headquartered in Hong Kong and with a pan-Asian presence, FWD Insurance is a comparatively new player in the Philippines, having commenced operations there in 2014. Despite this, the company is already having a dramatic impact. “In the Philippines, there are a lot of terror activities and insurance companies were not covering those. We became the first company to offer financial coverage for this through our Peace plan options. That created a ripple in the industry,” comments Umali.
Peace is not the only coverage plan to disrupt the Philippine insurance industry. “Another one is the Set for Health product. In medical insurance, there are normally long list of exclusions – for example, no extreme sports. We cover those. We want you to forget about the worries of extreme sports and let us do the worrying for you,” explains Umali. “Additionally, we offer Fight Plan – this covers you upon diagnosis of any type of cancer at any stage. When this product was launched it raised a lot of eyebrows. The industry does not cover such critical illnesses, but we were the first.
“These medical financial products are disrupting the industry and others are now asking, ‘How is this working for FWD?’ It’s eating up their share,” Umali continues. “Three years ago, we were nobody; last year we were already number 12 in the Philippines. This year we intend to break into the top 10. Our track record speaks for itself. We are getting noticed, not just in terms of revenue and customers, but also ranking.”
A challenger brand
Some competitors have begun to adopt FWD Life Insurance’s practices as their own. “We look at our competitors. We have seen their processes and found some very similar looking e-commerce functions to ours. The best praise is that if we are being copied we are clearly doing something good,” notes Umali.
In fact, such actions by competitors only increases FWD Life Insurance’s drive. “It makes us realise we should not rest on our laurels,” Umali states. “We shouldn’t forget our start-up mentality, we should remain a challenger brand, regardless of how well we are growing. We want to be within the top five within five years in the Philippines, and we are well on our way to achieving that.”
Overhauling the industry
The main driving force for FWD Life Insurance, however, is working to change the perception of the industry within the Philippines – something that initially enticed Umali to join the business.
“What drew me to the company was the vision – the company wants to change the way people feel about insurance. That’s a strong statement for me,” comments the CTO.
“What also drew me here was the work I have done in the last four years of my professional life, looking at disruptive solutions for the market. FWD has the same approach, they want to overhaul the industry. Insurance carriers are deemed as traditional villains by the people. They are only after the money – that’s the assumption – and that they do not truly care about the customer,” Umali continues.
In order to change the perception of the industry, FWD Life Insurance has worked to change the way that customers feel when they interact with the company. “Building that trust with the customers is key – the customer is at the core of all our decisions,” explains Umali. “That was the biggest decision I made in IT. Previously, IT focused on technology – not the pain points of the customer.”
This change in focus has been key to the success of FWD Insurance. “The transformation was to look at the pain points and how we can make solutions to target these pain points. Not just to create a product, but to create a fast, agile and evolved solution based on the user pain points,” Umali reveals. “Technology played second fiddle, the primary change was in the people. In order for you to change the way people feel about insurance you must change the way people feel about IT. You must find and include people who feel strongly about creating solutions for people.”
Having hired employees to focus on the problem, not the solution, FWD Insurance then looked at technology. “C2L has been a strategic partner for our digital transformation initiatives. They developed a mobile application called eApp that allowed our sales team to sell our insurance products using tablets,” Umali remarks.
“This paperless process allows the customer to digitally sign an application form and view sales quotations on the devices. Digital images of the documents are processed by the new business and underwriting teams of FWD using C2L’s NB Online system (NBOL). Agent performance and compensation are also monitored using the Distribution Management System (DMS) of C2L.”
As well as C2L, the company has also worked with Candela Labs to advance its technological transformation. “Our partnership with Candela Labs (formerly AWPL) greatly contributed to our digitalisation efforts. FWD has been using AWPL workflows to automate our new business processes. We also conducted a number of digital experiments to beef up customer experience and our product line up,” advises Umali.
“We also have a number of digital experiments conducted jointly by FWD R&D team and Candela Labs that will disrupt the insurance business and obviously we cannot reveal them yet. However, I am excited to share that we are beta testing another innovative service for our CX team that utilises AI and deep learning algorithms that will complement our existing live chat service.”
Technological transformation has also occurred on the non-customer facing side of FWD’s operations. “Previously, the developers preferred to use old methods – the ‘hammer and nail’ approach,” recalls Umali. “They were using their own tools in their native and comfortable programming language, but it would take them a long time to build from scratch.”
Umali – a developer when he first entered the industry – set out to change this. “Before we got into the rapid application development tools, we had to ensure that the developers were going to use it. We had to let them test it and to create proof points from these new tools – we refer to this as the ‘nail gun’ method, which allowed us to develop faster.”
Development is significantly quicker using this method – the Peace product was developed in 21 days, in stark contrast to FWD Life Insurance’s previous turnaround times. “When I joined FWD, the last product launch was two years prior to my joining. That was a big challenge for me, having been used to a two weeks’ cycle in the telecoms industry to every two years – that’s worlds apart,” reveals Umali. “I don’t like that pace, I want it faster.”
Despite already shortening the development times, Umali wants the cycle to be even faster in the future. “I want to be able to launch or evolve products every two weeks – from concept to launch. That’s my dream, that’s what I want,” he advises.
“We want to instil change in the industry. Sometimes we are labelled as an Insurtech, and not an insurance company, but we aren’t. We think like an Insurtech, but act as an insurance company. We are grounded by insurance, but we happen to be tech guys,” concludes Umali.