For many financial businesses that ultimately depend on selling to consumers, the beauty of digitalization is that it allows them to mass customize offers, often through partners, and deliver the right product at the right moment.
Not all firms see value in this approach, however. Bupa Global, a U.K.-based monoline health insurer, is using technology to be more efficient, but when it comes to product development and customer insight, it believes the traditional way – human decisions – is best.
“We’re insight-driven, but digital is not relevant,” said Neil Kirby, global marketing and sales director in London. The firm prefers to rely on focus groups.
Why? Are they Luddites?
No, Kirby says: it’s the nature of the business, which grew up providing high-end health insurance to expatriates.
The firm is exploring how to develop a digital platform for customer service and product delivery, one that works effectively in different markets.
But product design and sales remain firmly in human hands.
This is a reflection of Bupa’s governance, which is almost unique, as a large-scale corporation chartered as a “company limited by guarantee” – which is to say it doesn’t have shareholders, but members who guarantee the company’s liabilities in return for a distribution of profits, most of which are reinvested in the firm’s operations.
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This structure means the firm has been a lot more customer-centric than the usual big financial institutions. Today, insurers and other traditional firms are restructuring operations in order to compete with customer-first tech players, which involves some degree of reconciliation to models focused on revenues and product.
Bupa Global’s use of technology is a reminder that the fintech phenomenon is about better customer experience and service. If a company already has that embedded in its structure, then digitization is simply to improve efficiency.
Digital for engagement
In Bupa Global’s case it has seen virtual healthcare take off, thanks to COVID-19. Before the pandemic struck, it launched a digital platform to connect policyholders to clinics and other needs across the geographies in which it operates.
“The take-up was faster than what we expected,” Kirby said.
If there’s an area where the firm is pushing tech, it’s for customer relationships. It is rolling out digital self-service capabilities to give policyholders more control over filing and monitoring claims, but also to try to have a more routine engagement with customers, rather than just transact with them.
For example, Bupa has found that mental health has become a huge subject. This is true everywhere in the wake of COVID-19 but it has found this resonates particularly in China.
It started to research this outreach in 2019 in China. “High-net-worth individuals are quite private, but they do use social media,” Kirby said. “We realized that it was no longer business as usual.”
This is leading to deeper questions about the future of distribution. Bupa Global relies on insurance brokers to sell to wealthy people. But China demands a different response.
“How do we deploy into a digital ecosystem for China?” Kirby asked. “We need to move away from relying on just one platform.”
The firm continues to experiment with marketing across WeChat and other social media.
Whether this will translate to how it operates elsewhere remains to be seen, given China’s unique environment.
Building a new platform
This leads to operational questions. The firm wants to maintain a global framework and not spin off I.T. stacks in each jurisdiction. Its customers tend to move around, so they need a continuity of service in different places.
Bupa Global is researching a centralized platform for claims and customer service.
“We’re still exploring whether we do this ourselves or with partners,” Kirby said. “There are lots of digital solutions out there that we can’t easily replicate.”
But the firm isn’t taking this into product development, in part because it is a monoline and not looking to scale into life insurance or pensions. It does not need to cross-sell.
And it does not see value in using technology to personalize insurance products when its focus is selling comprehensive health coverage. Digital makes sense for very simple products, but that’s not the business Bupa Global wants to be in.
“People buy insurance because we cannot predict the future and they need to have broad coverage,” Kirby said. Similarly, while the company is using data for delivering its insights, the insights themselves are not data-driven.
“Insurance can be a complex topic,” he said.