Overcoming the People Challenge: Southeast Asia’s Insurance Industry

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Rising insurance demand

Steady economic prosperity across Southeast Asia is producing a burgeoning middle class that’s sparking demand for insurance.

Affluence drives spend on needs such as lodging and wants such as transportation vehicles. This fuels the demand for home and auto insurance. As living standards increase, so does access to healthcare. This generates demand for health insurance. Several countries face aging populations that also drive the need for life insurance and products that safeguard living standards.

In fact, insurance growth rose 2.8% in Asia Pacific between 2012 to 2017 – compared to 0.6% across the rest of the world. That’s almost a five-fold difference! The lead was most dominant in the non-life sector which led at 8% relative to 0.9% for the rest of the world.

Despite the rise of insurance needs, most in the region currently still underinsured. This marks abundant opportunities for insurers in Southeast Asia.

 

Not ready to capitalize on opportunities: HR challenges

Having said that, many insurers are not prepared to take advantage of the demand boom.

This is especially since they find themselves in the middle of a multitude of other changes. Such as new financial reporting standard, IFRS 17, which is coming into effect soon. Or innovations such as fitness wearables which are changing the way insurers analyze customer behavior and price products. Or a competitive landscape that threatens to be fundamentally different with the emergence of digital insurers. For example, Singapore-based Grab Financial has already commenced on a full-scale push into micro-insurance.

So, why aren’t insurers responding better to opportunities and changes? One of the key pain points is human capital and talent.

The rapidly changing insurance landscape necessitates new and swiftly evolving skills in the workforce. As insurance companies seek to transform their operations so that they can become relevant for the future, they need to increase the use of digital tools. This compels an employee base that’s armed with new technical skills to accommodate the growing use of big data, advanced analytics, and even innovations such as artificial intelligence and machine learning. Insurers also need an agile workforce that can fill roles as they emerge, plus adapt existing jobs to align to the future.

But insurance companies face significant skill gaps, with only a third considering themselves equipped with skills to meet business needs. For example, if an insurer puts in place a data-driven concept for recommending products to customers, are agents prepared to explain the why’s and how’s to customers? As Asia’s populations trend towards a millennial majority, is the traditional workforce ready to capture and service them as customers?

Insurers need to reskill the existing workforce, and, at the same time, ensure employees remain engaged by the new job profiles to retain them. Simultaneously, insurers need to identify new expertise and integrate them into the business seamlessly.

Left unaddressed, the HR challenge can thwart the efforts of the best Southeast Asian insurers to successfully transform and meet market demand.

 

Overcome the HR challenge

Driving efficiency in learning and development

Operating expense is a perennial focus for insurance companies. Rightfully so as it is a fundamental driver profitability and competitiveness. Unfortunately, many insurance companies face inefficiencies in their learning functions which bloat HR costs.

To keep up with rising needs, learning needs to evolve beyond the conventional on-the-job training and traditional learning management systems. Today’s new learning tools already harness social or mobile platforms which enable teamwork within communities for faster comprehension. Real-time learning that aligns to the pace of business today appeals to the millennial workforce. While social HR collaboration tools give employees what they need to get the work done – and remain engaged, instead of feeling under-resourced and helpless.

By accelerating learning, insurers gain a more skilled workforce that can facilitate business outcomes while shaving costs. More engaging learning and development opportunities also help retain business-critical talent in Asia.

Get better at utilizing the on-demand workforce

Contingent workforce, including part-timers, freelancers, gig workers and contractors, allows businesses to tap on expertise unavailable in-house. Once seen as stopgap solutions, on-demand workers are increasingly leveraged to help organizations run better without increasing headcount.

Insurers are already looking to open-sourced networks of seasoned professionals, technical experts and innovators to fill needs. As the contingent workforce grows, however, insurers need more sophisticated approaches for managing the total workforce.

Innovative technologies help insurers resolve some of the most pressing issues related to contingent workers, including how to:

  • Better identify and recruit the most suitable talent in the open talent marketplace
  • Optimize the use of contingent workers – with the rest of the workforce – to increase operational agility
  • Simplify procurement of open talent service to streamline costs while ensuring compliance to local regulations?

Making performance management relevant

Traditional performance management systems demotivate employees in Asia. That’s understandable given the inherent bias implicit in people. Conventional practices that embed prejudice in the performance management process – such as giving line managers ownership of the entire feedback loop – create dissatisfaction and drive attrition.

Today, it is no longer enough to focus on individuals without considering how their performance is affected by other people. As employees (not just millennials) become increasing digitally connected, a broader social perspective is required to ignite better performance and retain talent.

Fortunately, today’s technologies and innovations are allowing insurers to redefine performance management to ensure business objectives and employee goals are aligned.

Transform the HR function to drive business outcomes

Opportunities will continue to abound in the Southeast Asian insurance industry in the near time. To capture them, insurers must ensure their HR organizations serve as strategic business partners.

This has meant many things over the years. But what it means today boils down to a few key areas:

  • How intelligently is your HR organization using employee data?
  • How effectively are you identifying, deploying and retaining business-critical talent?
  • How is your HR organization enabling your people to fuel innovation?

The reinvention of the HR the model from an administrative and transactional function to an intelligent entity may seem daunting in the past. But today, with all the innovations that allows flexibility in transformation, there’s really no excuse.

What’s better is that the journey will be as purposeful as it is rewarding. For the outcome is a flourishing workplace that’ll inspire your people. And thriving bottom lines that’ll help everyone achieve their ambitions.

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