ITC DIA Europe

Closing the knowing-doing gap

Written by Roger Peverelli and Reggy de Feniks - Founders The DIA Community on Jul 20, 2017

Interview with Lee Ng, Chief Operating Officer of LumenLab, the MetLife innovation centre in Singapore.

What do you find interesting in the insurance business?
Lee: “The insurance industry is undergoing a transition right now, so if you’re into innovation, this is as a good an industry to be in as any other.  The opportunity to make an impact is enormous.  Moving forward, in a rapidly changing and increasingly uncertain world, the need for protection is even greater than before, and new technology will facilitate people being served much better.  There will be greater inclusion through affordable micro-insurance; customers can be served more efficiently with digital technology; and we envisage new products being developed that will protect people in new ways, especially through early screening and prevention in health.”

Can you describe the way in which you drive innovation and change?
Lee: “Fundamentally, LumenLab, MetLife’s Asia based Innovation Centre, has two goals: drive a innovation mind-set through cultural transformation, and build value creating new businesses.  We work with  various groups and countries to bring the innovation mindset into their businesses.  To that end, we run workshops and bootcamps in our footprint countries, and incubate their ideas.  We also ran a start-up engagement program called Collab where we published 16 key problems and invite start-ups to apply.  We selected 8 finalists and gave them extensive coaching with a view to awarding the winner a $100K commercial contract with MetLife.  Finally, we have projects within our lab which we started organically to demonstrate new values or new business ideas.  The Virtual Reality project which was recently announced in India is one such example.  In short, we are here so that MetLife can leverage external and internal innovations to better position for the future.”

There are so many new entrants out there and new business models and new technology solutions being introduced almost every day. What should worry insurance incumbents most?
Lee: “Yes, indeed.  And the amount of funding into fintech is impressive too.  We recently completed a project called Ten-X where we looked at the 8 vectors that are driving change in the industry.  From digital technology to AI to big data to digital health, there are lots of ways technology can be leveraged and many start-ups are already doing so.  I would be surprised if incumbents are unaware of these developments.  In fact, I suspect many incumbents are testing the technologies in house already.  So technology is not the threat.  Customer’s expectation is the second area where our day-to-day experience will shape our demand from the insurance companies.  Again, incumbents are all improving on that front, where everyone now has a digital marketing or transformation department.”

Lee Ng (MetLife´s LumenLab Singapore) at DIA Amsterdam 2017

What are you most concerned about when it comes to embracing a digital mentality outside these departments?
Lee: “The one thing I am most concerned about for the incumbents is this: the knowing-doing gap.  Everyone knows that customer is going digital, and most would believe that in 10 years, most insurance will be sold digitally; there’s even the travel industry you can look at if you don’t believe that agents can go away.  But today, say if a meaningful portion of your revenue comes from Agents, how can you transition?  That’s the hard question.  I think it is the defining the path forward that is most difficult, given your current processes and financial obligations.  So it is not the “knowing” problem; it is “doing” problem. 

The so necessary cultural change also reflects, for instance, in the notion that it is not just about decreasing the time to market, it is more about decreasing the time to make decisions. How are you getting everyone on board and up to speed?
Lee: “Indeed cultural change is difficult.  And a big challenge is the speed of decision making, and the traditional way of thinking in terms of a multi-year all-encompassing project rather than a test and learn attitude.
At MetLife, we have started having open conversation about the trends and our challenges at our Asia Leadership Group meetings and agree on a set of priorities.  The difficulties is that insurance is more fragmented than tech companies because every country operates under a different set of regulations, and so it is not easy to have a one size fits all digital strategy.  We used the Ten-X Point of View on the industry to drive alignment, and with that comes a set of priorities which we can then go and execute.  But honestly, the challenge is velocity. We are just not agile and fast enough … we could do better!”

What are, in your view, the key technologies that will impact insurance as we know it?
Lee: “There are lots of technologies that will change how things are done today.  Cloud, automation, block chain, AI, IoT, big data and many others will certainly enable something to be improved.  Being a technologist myself, I hesitate to pick a winner because they affect different part of the industry and value chain.
But the most important thing is to focus on is the “job to be done for the customers” when building new solutions.  How are you tapping technology to make your customers’ lives better?  If you are and B2B company, make sure you really understand how your tech translate into lower cost or higher revenue or customer satisfaction for the end user.  Or for B2C company, uncover new needs or a source of friction for the customer, and hone in on everything related to that issue.  Understand the constraints and the value chain.  Then test and learn till you find the winning model.”

Where should insurers look for inspiration to accelerate digital transformation and innovation?
Lee: “I think the insurance sector can learn a lot by looking at the banking industry over the last few years.  Initially, you see companies digitizing their services by giving consumers digital access to their accounts, then expanding the range of services the consumer can do digitally, and most recently adding intelligent advice for their clients.  This is all great digital transformation. But look harder, and you see the Paypals of the world were quicker in helping consumer transact at the beginning of new services like e-commerce.  Then you see how in China, an entire different set of companies like Wechat and AliPay dominate the digital payment industry, and now slowly expanding into small loans and other services.  So digital transformation is not really a shift of technology, it is a change in consumer behaviour and business model.
Insurance carriers are slow to embrace digital technology, but even slower in recognizing how consumer will use new ways for protection.  To accelerate the pace, it is important to focus on the customers and understand their pain points, and then offer new solutions that are not yet another insurance product priced according to the actuarial tables we have been using.  There are new needs and new data set.  We need to have a test and learn mindset so that we can “hear” customers’ feedback through real data.”

Amsterdam 12-13 June


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