Mention insurance and most people would immediately think of life, medical, travel or car insurance. But did you know that it is possible to insure against rainy days too? As part of its digital transformation, NTUC Income — Singapore’s only insurance cooperative — has developed Droplet, a product designed to protect ride-hailing app users from surge pricing on rainy days. 

Users can buy coverage for given days and send in the e-receipt to NTUC Income should it rain on those days. NTUC Income would then reimburse 60% of the rider’s fare to offset the often exorbitant surge pricing. This is a more serious problem than you may think: “I got hit with a $50 trip fare because it rained. It happened not once, but three times in a month!” says regular Grab user and NTUC Income customer Irene Tay. 

This unique product is one of several that NTUC Income is developing to cater to the digital lifestyle of modern consumers, where flexibility, control and convenience are increasingly prized. “We believe that the future of insurance will be digitally led...Pursuing digital transformation became a natural step for us to evolve and succeed as an insurer of tomorrow,” says NTUC Income’s chief digital officer Peter Tay, in an interview with The Edge Singapore. 

The journey started more than three years ago, when NTUC Income set up a Digital Transformation Office (DTO) so that it can create new business propositions catering to evolving needs of consumers. 

In particular, adds Tay, the future of the insurance industry lies in micro insurance and subscription-based insurance which address flexibility in cash flow and protection. NTUC Income has rolled out PinFare, an app that protects travel-loving Singaporeans from sudden price hikes in airfares. It has also developed Snack, where users can purchase a micro-insurance policy covering an individual for 360 days for a few cents whenever they engage in a daily activity like using an EZ-Link card or redeeming a meal voucher. 

“Micro-policy propositions like Snack can meaningfully lower the barrier of entry and still help customers build up their insurance portfolio, regardless of their diverse financial circumstances,” explains Tay. With the Covid-19 pandemic exerting financial pressure on many people, these schemes will allow them to better afford insurance coverage.

 In a sense, offering products such as micro-insurance is a continuation of NTUC Income’s mission for the past half century after it was set up to provide essential insurance coverage to all citizens. As Singapore grew, so did NTUC Income. As Singapore’s economy and society transforms for the digital era, so has NTUC Income, with its offering of innovative products and services. 

The power of digital transformation 

Data analytics is key to NTUC Income’s efforts to develop these innovative solutions. With its Analytics Centre of Excellence leveraging on Big Data in the realm of consumer analytics, NTUC Income is able to observe untapped consumer trends within the market through next best offer (NBO) models and design new products catering to these needs. Tay hopes to cultivate a data-driven culture at NTUC Income and develop strategic data partnerships to expand the insurance cooperative’s Big Data capabilities to deliver more personalised service to clients. 

“Generally speaking, the more data we have on a customer, the better we are able to understand their needs, as well as assess the risks involved in insuring them. We’re also able to keep up with their different life stages, during which their needs continue to evolve, and continuously offer them products that become relevant at each stage,” says Abishek Ghosh, head of data analytics at NTUC Income. Well-analysed and interpreted consumer data, Ghosh says, ensures that the firm can pitch the right offer at the right time to customers. 

NTUC Income has also been cultivating partnerships with like-minded digital solution providers to help reimagine how customers engage with and obtain insurance. For instance, it has teamed up with ZA Tech — the technological export arm of Chinese internet insurer ZhongAn Online — to harness its deep expertise in InsurTech. The aim of this partnership is to deliver a pipeline of innovative digital insurance products for the tech-savvy modern consumer. 

“The partnership has brought us a highly scalable InsurTech platform that kickstarted our capabilities in working with ecosystem partners in Singapore. Our proof-of-concepts across AI, blockchain and automation technologies help us stay ahead of the curve in our industry,” explains Tay.

 Joining forces, he adds, has allowed NTUC Income to test-bed and scale digital innovation in Singapore and regionally, accelerating the digitalisation of insurance in Singapore and bridging client protection gaps. Some of NTUC Income’s latest products, such as its true usage-based motor insurance and SNACK micro-insurance scheme, have tapped into this new technology. 

In particular, ZA Tech’s key technology asset, the Digital Insurance Core System, has improved NTUC Income’s agility, allowing the firm to develop more customisable modularised products that caters to untapped segments of the consumer market less open to traditional insurance. 

Now, with consumer behaviour changing more rapidly than ever, such a system will allow NTUC Income to stay up-to-date with consumer needs. AI has also helped NTUC Income develop dynamic pricing models to provide the best prices for their products and speed up claims processing to complement internal procedures. 

As consumers increasingly seek out the convenience of online solutions, Tay also sees digital technology as a way of providing a more seamless end-to-end user experience for customers. “As customers become more digital-first and their consumption patterns are increasingly lifestyle-driven, we must also play to consumers’ way of engaging with information and making purchases online,” he observes. Digital technology can help fulfil a range of functions including product identification, online claim filing and engaging with advisors. 

Some of these new functions include Online Life, which helps customers select from a wide range of life insurance for direct purchase online. This is used concurrently with its AI-powered life insurance digital advisor, askSage, which allows customers to conduct self-service financial planning so as to make an informed decision about insurance purchases. Accident reporting via the Income mobile app also makes it easier for claimants to report vehicle accidents within 24 hours as required by the Motor Claims framework. 

Such capabilities have helped NTUC Income provide good customer service during the Covid-19 pandemic as well. “We recently introduced our remote client engagement process to help maintain safe distancing while optimising operations, so income advisors can continue to deliver insurance, virtually anywhere, as they can now meet up with customers to review financial needs securely and complete insurance purchases, all via digital means,” shares Tay. 

Mind over matter 

Ultimately, however, embracing new technology is just one part of the equation. What is equally if not more important, muses Tay, is to cultivate an environment where everyone challenges themselves to harness agile thinking and develop a digital mindset. His vision for NTUC Income is to be an organisation that “innovates with a purpose”, where the company thinks out of the box to customise products and services, solve pain points and expands insurance access through innovative propositions. 

The next step in NTUC Income’s digital transformation involves harnessing new digital segments from youth to gig economy workers and SMEs to offer more inclusive coverage to vulnerable groups. It plans to work with partners to develop products around their business ecosystem and unique customer needs — it has already worked with Grab to provide protection for its riders and drivers. With the imminent launch of 5G likely to hasten the development of the Internet of Things, NTUC Income is looking to better understand how it can tailor its offerings to better serve its customers within this “brave new world”.

 To realise this vision, NTUC Income is seeking to introduce more inclusivity and diversity into their team to propel the firm’s digitalisation journey. This involves bringing in not only “subject matter experts” with existing insurance experience, but also people from other walks of life including bankers, designers and entrepreneurs, who can take innovative thinking to the next level and reimagine the future of insurance. What really unites these individuals, Tay believes, is an agile and innovative mindset that can push the boundaries of the possible.

 “We are focused on developing a digital mindset and culture within the organisation to cultivate talents within and believe that a digital culture would become the centre for attraction for talents throughout the region. We keep an open mind and welcome blue-sky thinking,” he says.