After listening to Manulife’s digital initiatives, DigFin asks William Man, the insurer’s Hong Kong chief information officer and COO, where it’s all headed. With artificial intelligence-based tools, what will global insurers look like in, say, five years’ time?
Man has been in his current role a little over one year. Previously he worked for nearly 10 years in Shanghai, becoming the COO of Manulife-Sinochem Life Insurance. He’s been in China throughout its sudden digital transformation. So naturally that’s how he frames his response.
“In China, large companies have created a complete loop for customer experience. They’re using all manner of OCR, voice recognition, all kinds of biometrics, and putting analytics on the back end.”
This is not just improved processing. It’s reshaping how business gets done.
For example, it’s now standard for big insurance companies in China to have customers purchase policies via mobiles. Insurance regulation requires companies make a statement confirming they understand what they’re buying.
Traditionally this is a piece of paper signed in the presence of an agent. But when customers purchase policies by phone, they can record a verbal affirmation and send the voice file to the insurer or its agent.
This allows virtual onboarding but it also gives the insurer a record of that person’s voice. Using A.I. tools, they can now almost instantly recognize a customer when that person calls the help center. Instead of a long wait and then explaining who you are, the call center addresses you by name straight away.
“Fast forward a few years, and we’ll have that same seamlessness,” Man said. “That’s the best use of technology to reduce or remove pains” in buying insurance and getting service.
Where to begin
Given the unique circumstances in China – a shoddy traditional sector, a vast population (lots of data to learn from) and a different regulatory framework – how likely is it that Manulife and other global players can match this?
Man says it’s possible, noting that Chinese insurers could move fast because they have less history and younger legacy systems to surmount.
In some ways Manulife is already beginning to use the same tools. It is not following other fashions in fintech, however.
For example, the firm hasn’t explored an “ecosystem” approach by which it would team up with a coterie of giant consumer-facing companies. It prefers to focus on improving customer experience and its own long history and professionalism.
But it is now starting to work with third-party software companies, and Man has a small team scouring the planet for innovative fintechs. The company is now close to deployment with an Israeli company that specializes in optical character recognition (OCR) for Chinese characters. (Man declined to name the company.)
“If you think doctors’ handwriting is bad in English, you haven’t seen it in Chinese,” Man said.
Discussion of digital strategy began four years ago but began in earnest in early 2018. This has involved three major areas.
First is to find ways to introduce agile development for new products and services. The company will retain its core legacy systems but only as a system of customer record; new transactions are now being served through a new stack, which Man calls “engine two”. A data lake and microservices connect the database – “engine one” – with the application layer.
The idea is not to ever retire the original stack but to slim it down to serve the one function of customer recordkeeping, which is then used for financial and regulatory reporting. This is 25-year old technology but it remains robust for this purpose, Man says.
It is based on “waterfall” project management, in which tasks are sequential, with one step dependent on the previous one to happen. This doesn’t work for product development and anything to do with customer experience, so the “engine two” stack is built around principles of agile DevOps.
Second, Manulife has changed its operating environment from one of product silos to four general threads also built around customer experience: how customers search, find and buy Manulife products; ongoing service; and claims; plus a enterprise-wide capability to process things that cut across all business lines, such as payments or customer communications.
Claims in particular is another area where a lot of efficiencies can be made. Man says about 95% of all claims are in health care, which is another reason why the insurer has made reading health-related documents a priority. Claims is also the area that gets the most customer complaints, but he thinks technology can enable a majority of these to be processed automatically – and that will extend to complex products too.
Third, starting on April 1, it began selling its first end-to-end online products, both for new government-sponsored products (extra pension contributions, and voluntary health-insurance savings).
And on the distribution side, it recently rolled out its online sales platform, called ePOS, intended to support its agents’ sales. Man says this now accounts for 50% to 60% of new business in Hong Kong.
“Adoption will rise and this will eventually become like a mobile office,” Man said, in which agents can help push through online claims. “I’ve seen that happen in China.”