1. Can you please talk about Fuchsia Innovation Center? How does an innovation center fit within an insurance company?
Fuchsia Innovation Center was set up in mid 2016 as the innovation center of Muang Thai Life, a leading Thai insurer. We wanted to build a very open structure in terms of collaboration for both internal and external partners and to really introduce to the company new consumer centric approaches. This was my first job in insurance, I came from a background of product and process innovation. It’s been a learning curve but after some time, I learned that what we do has great impact in people's lives. At Muang Thai Life, we want to bring the voice of customers in to the process as much as possible and introduce a culture of change and innovativeness to our teams. The insurance industry itself is very steady and old fashioned. Old in the sense that it's been thoroughly trial and tested, it has lots of statistics and lots of proofs. How do you marry those strings into new frontiers? Innovation in itself is sometimes an uncharted territory that people need to try and I personally feel that if you don't try you don't learn. We're trying to introduce and marry together the spirit of trial and error into a traditional business. And interestingly enough, a lot of people within the organization are really enjoying trying new things, especially the new generation. Having an innovation center inside a traditional business gives the opportunity for the younger generations, as well as the older generations who have a lot of experience to merge together and really collaborate.
2. How does the initiative of launching the innovation center comes and how is the support from senior management?
The initiative really came so we could address customer needs. We always wanted to make sure that we start off with what the market is looking for and address the gaps. We’re very lucky as we’re fully sponsored by the CEO and I report directly to him. He’s a true innovation champion and helps to set the tone with the rest of the management. One of our main rules is that we are totally allowed to fail. But how can we fail fast? How can we fail at a limited cost? You are allowed to try new things, you are allowed to fail but you need to make sure that we pivot quickly – we’re still not fast enough.
3. How do you build a culture of innovation?
We have created a truly cross functional team with cross functional team meetings - each team member has their own role outside the innovation center, and have the right and responsibility to contribute with whatever projects or innovative ideas they're doing in their respective teams. They bring in their capabilities as well as their expertise. And when I said the CEO support us, I also meant that he really pushes for the release of these individuals so that they can participate in the innovation lab. We initially saw quite a bit of adjustment or some sort of shock at the initial stage, because normally in insurance, and in many industries, each department is focused on their own function: engineers will be doing engineering stuff, the actuaries we'll be doing pricing and the monitoring, we'll be monitoring the product, but you don’t see the holistic picture until you bring everyone together with each individual having their own contribution based on their area of expertise. There are different stages of the project or program. At the very start, everyone is kind of blunt, we are all human, we all have needs or we probably don’t have experience outside our own role so the main contribution are those true human experience and true human insight into whatever we want to do at a later stage where the program is being put forward. Then you start bringing on your expertise - your role changes, and you start contributing to all aspects of the project: marketing, pricing risk or designing the product, everyone should be able have their say and to be able to understand how these things are being done, and also voice out what they feel that might be relevant to the program. It's very important to realize that each of us have that input so we won’t be blocked down by our own role and our own labels: you have this degree or you have this experience, so you can only work in that area - that's not the way to go.
4. And how about talent recruitment?
The most important thing is how you construct the team. Most people I recruited into the innovation team are mainly outside the insurance industry but a few of them have extensive experience in insurance. They all have a huge interest in new ways of working. They come from consumer research, consulting, healthcare and investment backgrounds, and it's quite an interesting mix.
5. Do you also invest?
Yes, we do. We have a flagship venture capital. The fund and the premise of the fund is to do strategic investments but not just in insurtech. We invest in health tech, living tech and other areas that would benefit the group as a whole as we have life and health insurance, general insurance, and one of our sister companies is a bank.
6. Any successful investments?
Yes, there has been quite a few! The fund was set up a year and a half after the Innovation Center. It's been a very interesting journey, we see a lot of interesting startups as well as funds that focuses on certain areas. We like health tech a lot because it has a strong correlation and relationship with the insurance industry. We have heavily invested in digital health care. The investment in this whole COVID situation has been explosive. We really feel that it was the right call because people can't go to the hospital, people can't get access to drugs and medication. Areas that were slow to move such as telemedicine has now changed overnight. After COVID-19, there will be a new normal, whatever that may be. Whatever happens, people are already introduced to some of the things that initially we thought might take behaviours to change. We did the investments, but we will keep on looking because COVID-19 will give us the opportunity to see some very strong startups or companies that will emerge out of these challenges.
7. What role do you think that insurtech can play in fighting a health crisis?
Many! First of all, people say that insurance and health care are probably the two most traditional industries, and before COVID-19 people were saying that in health & life, digital insurance will struggle and not be fast in change compared to non-life. Things like auto insurance or travel insurance are easier to understand - people don't really need human help in explaining them. And now, COVID-19 has hit that challenge for life & health. How do you create the ability for humans to contact each other without being together? I'm talking about agents, or bancassurance, normally people would go to the branch to get their services and buy the product, they sit with their financial advisor to go through whatever policies they want to buy, but now that cannot happen. So, it becomes a conversation of augmented agent, an augmented relationship. Digital and insurtech can definitely come into play. We have been in lockdown for several months and after we go through this situation and things gradually start to open, I think people will still have reservations on human contact and exposing themselves to things that may not necessarily be worth the risk. I think augmentation and how we create the capabilities for our sales force, our customers and for the related parties, to continue to do business, but to do business in a more digitized way is the way to go forward. The insurance industry has the responsibility to educate the population that you're not just merely getting infected by COVID-19 but if you contracted COVID-19 what will happen to you after that? Your lungs might have scars and that might be considered a pre-existing condition in many countries, and you might not be able to get normal health insurance anymore. I think selling a very small size COVID policy is a good response to the very immediate needs that customer may have. But as an industry, we also have that responsibility to educate the customer that you might want to get a more comprehensive coverage because post COVID-19, it might have further implications on your health.
8. How would you describe the insurtech landscape in Thailand?
In Southeast Asia, insurtech has flourished and it really has that momentum and development. We see a lot more from China, Singapore and Indonesia so, as a region it is quite exciting. However, if you look at it deeply, a lot of the innovations around insurtech started from non-life and general insurance like auto insurance, travel insurance so small ticket size insurance. I think there is definitely room for improvement for Thailand. We are quite lucky in a way that the regulator, the Office of Insurance Commission, is very supportive – you see them very excited with the insurtech movement - they engage with insurance companies as well as the general public to drive these innovations. They have created an insurance sandbox that allows insurance companies as well as insurtech companies to send in ideas and test them in the regulatory sandbox. Our company was the first life insurance company to be part of the sandbox almost two years ago.
9. What are your predictions for the insurance industry for the next 12 months? And are there any developments or technologies that will get special attention or will completely disappear?
It’s too soon for anything to disappeared. I think what we will see in the next 12 months would be the emergence of the digital tools for assisting sales as well as customer service, quicker underwriting, much quicker settlement of claims, and much quicker launch of products. I think the bigger question would be: who will stand out? There are quite a few companies offering very similar solutions. Right now the market is definitely ripe for disruption especially after COVID-19!