Page 32 - The Insurance Times January 2022

But, as Asian consumers become wealthier and more
sophisticated, they will look for agents who understand their
needs (such as retirement planning and investing) and can
provide personalized advice. Insurers should tailor their
financial-planning approach to the Asian context, where
customers not only have less awareness of financial-planning
options but also demand more flexibility in their financial-
planning journeys.

In many Asian countries, the capacity-led agency model
encountered a bottleneck even before COVID-19. Leading
insurers in large markets such as mainland China have
reported stagnant growth in productivity and capacity due
to new-agent attrition and a lack of professional field
management, while smaller insurers look for ways to gain Behavioral science in insurance
market share. Nudging, a behavioral science approach that uses "subtle
interventions to help people make better decisions while
The new digitally enabled hybrid model will result in a respecting the freedom of choice,"1 can be used to redirect
gradual, enduring shift of the agent's role from salesperson such behavior in two steps. First, target behaviors are
to financial adviser, in which he or she has expertise in identified. Second, a better choice architecture is created
products and financial planning. While this change will not to make it easier for individuals to choose a better solution.
happen overnight, it is imperative that insurance companies Used successfully in the insurance industry, the benefits of
begin revisiting the compensation model to reward agents nudging may include increased sales, reduced fraud, or
not only for acquiring new customers but also for providing improved customer and employee satisfaction. Many
quality advice to customers. insurers use nudging selectively: some, for example, use it
to optimize digital solutions.
Instead of paying agents solely on commission and overrides,
insurers could incorporate fixed salaries and service- or
Others have conducted structured reviews of the biggest
activity-based bonuses into the digitally enabled hybrid business opportunities for nudging and deployed a few
model. By adjusting the incentives, insurers will encourage discrete use cases. Still others have anchored nudging and
agents to get to know their customers and regularly stay in behavioral science deeply in their organizational strategies
touch, creating deep and lasting customer relationships. by hiring experts and dedicated teams or by creating
management positions devoted to
behavioral science. Wellness and
prevention models are appealing
because they're fun. People love
games and gratification: It's triply
rewarding when, after going to the
gym, policyholders know they've not
only done something good for their
health and their wallet, but they can
earn more points on their app.

A gamified product is also an
opportunity for more digital brand
touch points. By creating apps and
online platforms for tracking wellness
behaviors, insurers can create a
stronger brand relationship with their
policyholders - and ultimately improve
the customer experience.

32 The Insurance Times, January 2022