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Asia's Singlife Sees Big Wealth Management Market Potential
13 November 2020
, a Singapore-licensed life insurer (it was given its licence in 2017) made news in September this year by announcing that it intended to merge with , in a S$3.2 billion ($2.37 billion) deal. The transaction flagged how life insurance is an important part of the Asian wealth management ecosphere. Singlife says that it uses digital technology to bring services to a wider client audience, in a way that is more transparent and easy to understand. How much does the work of Singlife and Aviva overlap with what wealth management does? What would your business or others in the space be grappling with over the future?
Walter’s response: In the combined Aviva business, a lot. We not only have long-term savings plans and participating policies but Aviva has a pure wealth management platform called the “Navigator,” which looks at funds-based business, or funds-based investing and advised capabilities.
How much of what you’re doing to help people understand risk is also part of that overlap with wealth management?
For simple forms of savings to be an insurance contract, they have to include a certain amount of cover, so we have bundled up risk and wealth management together. We have found that people tend to start by needing investment and protection, which we can address by either using separate products or offering a package.
Do you think that in your part of Asia people think about these things than in Western Europe for instance?
I think people in this part of the world are a bit more comfortable in thinking like this, given that it has been this way for quite a long time, and it is expected to continue so for some time. I think Europe has had other regulations which have changed the way that products have been provided and perceived. Each market in Asia has slightly different nuances, so I would say that we meet the same customer need in different ways..
Are you seeing insurance products, either entering the market or already in the market, with fluctuating costs and prices? For example, do you see premiums going up in certain kinds of insurance products due to, people’s perceptions and risks?
No, I don’t see that. I actually see that coming the other way around. I think that risk is particularly on the protection side and risk is more addressable, stable and competitive, so we’ve seen prices coming down in the last couple of years.
Is it because capacity overall and understanding is improving?
Yes, that’s right and there’s a little bit more competition in the market as well.
There’s always a hierarchy of needs when it comes down to risk. From a protection side, the very first thing that they need to worry about generally tends to be the extent to be which they are covered for health and health-related services and extending that further to critical illnesses and ultimately to life insurance protection. From a life insurance perspective, that’s the way it always works and that will continue to be built out. And in terms furthering that and refining these benefits, making them more efficient and more targeted to specific customers’ needs is important. We’re seeing so much more knowledge - a box standard plain vanilla product that is taken off the shelf may not be as fit for purpose as something specifically tailored to an individual’s personal risk profile. And the technology of today actually allows for product development which is far more bespoke than generic, so I expect further levels of customisation to emerge over the coming years.
I was going to ask you about the impact of technology and AI and all these weird and wonderful things flying around, which presumably feed into that process, yes?
People talk about AI in different ways and people see AI as chatbots that can ask you questions and serve you products - not so much. It’s more around looking at who you are, what people like you would ordinarily need, trying to match solutions with your customer set, and understanding more about you. The AI is also about trying to serve both you as an individual and your advisor who can improve your life in the same way that Facebook posts you stuff that is in line with your behaviour. We see AI in the insurance space engaging you on areas where there are potential needs that we, as individuals, need to address for our long-term financial planning.
How would you say that COVID-19 has had any effect on framing how people think about risk in terms of the clients you look after?
We have seen a massive focus on wealth and savings during the COVID-19 pandemic. People have not gone on holiday or bought expensive items and, as such, savings rates went up dramatically. Insurance, particularly in times of uncertainty, tends to do quite well. From a Singlife perspective, we have seen massive increases in savings through our products over the COVID period. Another point too, with Singlife being a digital mobile-first engagement platform, the pandemic significantly improved our business relative to some other competitors, given that our offerings are all digitally available. We did see lower face-to-face advice in the marketplace, but this picked up when people were able to engage in digital face-to-face sales again. I think protection has not changed much in my view - I don’t see more people buying death benefits and others.
I think people have made sure that their health cover is in place which is all good. In general, I think the whole pandemic will be encouraging people to spend more time focusing on getting their finances in order, whether this is on savings or protection.
, a Singapore-licensed life insurer (it was given its licence in 2017) made news in September this year by announcing that it intended to merge with , in a S$3.2 billion ($2.37 billion) deal. The transaction flagged how life insurance is an important part of the Asian wealth management ecosphere. Singlife says that it uses digital technology to bring services to a wider client audience, in a way that is more transparent and easy to understand.
How much does the work of Singlife and Aviva overlap with what wealth management does?
What would your business or others in the space be grappling with over the future?