Bots vs bodies: Are Singaporeans ready to go fully digital for insurance?

That said, Covid-19 was probably the kick in the butt insurers needed to get up to speed. These days, buying insurance online is commonplace — especially when it comes to simple things like travel and car insurance. 

But is it possible for the more complicated insurance types, like critical illness and health insurance, to go the way of e-commerce?

MoneySmart surveyed 562 respondents in Singapore about how far they’re willing to go digital when it comes to insurance. Below is a brief summary of our findings.

Download Bots vs Bodies, MoneySmart’s insurance white paper, for the full insights.

How do Singaporeans get information on insurance?

Gone are the days where your main source of information about everything insurance is from your friend-of-a-friend financial advisor.

The internet has democratised information, and the survey results show — 73 per cent of respondents get their information about insurance from financial aggregators like MoneySmart.

In contrast, only 56 per cent of them get their information from the insurer’s website, 50 per cent of them get it from their advisors, and 27 per cent get their information from social media. 

The insights from the respondents’ comments shed light on digitally savvy customers’ behaviour. Knowing that the internet is home to both fact and fiction, they rely on trusted information sources like MoneySmart, over the less-reliable content found on social media.

Furthermore, customers are likely to cross-check their online research on financial aggregators and insurance websites by validating it with their personal advisors.

Buying insurance online or offline: Which do we prefer?

These days, customers expect everything to be done online, and this is no different for insurance. 86 per cent of respondents said they were satisfied with online self-service purchases for insurance products.

But does this paint a complete picture? Not necessarily. 91 per cent of respondents report being satisfied with human advisor-assisted insurance purchases, i.e. the traditional way of buying insurance.

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Before you whip out your calculator and tell me that it doesn’t add up to 100 per cent, yes, you can be part of both camps. If anything, this is a very strong indication that insurance customers would prefer a ‘phygital’ experience — a hybrid digital and physical experience.

The reason for this is simple — differences in terms of product complexity. For simple products such as car insurance, we found that customers were more than willing to purchase their protection online.

But as insurance products get more complex, the stakes are perceived to be higher. In those cases, advisor assistance helps insurance customers feel comfortable and ensure a higher success rate of claims.

What about insurance claims?

Buying insurance is one thing, but claiming it is a whole different story. This is the area where much of the customer pain points are, and the results are in favour of advisor assistance as the nature of their claims get more complex.

The survey respondents noted that the current online self-serve channels are not sufficient to address customer doubts or questions. “A single, wrongly submitted piece of information could cost a lot, so I would rather talk to their people than submit the form myself,” noted one respondent.

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This ties in with the point that self-service claims do not have a 100per cent success rate, preferring their personal advisor to look over their claim submission to address any gaps.

After the claims submission, having a personal point of contact is incredibly helpful as well. “You can chase the agent for anything. For online platforms, I don’t know who to chase when the claims are made,” said another respondent.

Customers tend to be highly satisfied and assured when advisors assist in document assembling, claims processing and submissions. This sense that someone on the “inside” is working hard in your best interest is not found in digital insurance experiences.

How do Singaporeans treat insurance products differently?

Anyone can tell you that not all insurance products are the same — as is their complexity. For this study’s purpose, we surveyed customers across four distinct insurance product categories.

In order of least complex to most complex, with one being the least and four being the most:

1. Car insurance (least complex)

When buying car insurance, 73 per cent of customers care about which is the best car insurer. This is amplified by the fact that car insurance is mandatory in Singapore.

Not much human interaction is needed either, so customers frequently buy car insurance through digital means. They experience similar levels of satisfaction when submitting car insurance claims digitally as well.

2. Critical illness insurance (less complex)

Customers don’t mind window shopping for critical illness insurance online: 63 per cent of them report being satisfied with online self-serve purchases for this insurance type. 

However, when it comes to submitting and processing the critical illness insurance claims, the results are overwhelmingly in favour of advisor assistance, with 71 per cent of respondents preferring it. 

Through their advisors, they see more value in screening their submissions for maximum success rates, and also their involvement in pushing their claims towards a favourable payout.

ALSO READ: Do you really need mortgage insurance?

3. Home insurance (more complex)

Customers felt home contents insurance to be one of the more complex types of insurance, perhaps because everyone attaches a different perceived value to their homes and belongings. Customers looking to buy are more keen on consulting their advisors.

Claiming home contents insurance is the same story as well — 68 per cent of respondents report making their claims through their advisors, even with digital self-serve options available. 

The complexity of submitting the home contents insurance claims is to blame here, with lots of requirements for evidence, parts that are easily missed when attempting to do it themselves. 

4. Hospitalisation insurance (most complex)

Due to the complexity of Singapore’s healthcare and health insurance systems, customers seek to buy and claim health insurance through their advisors rather than online.

Unless you have experienced a claim personally, it is difficult to understand your coverage needs, risks, premium amounts and how reimbursement works. Thus, customers are likely to welcome advice from human advisors who have processed actual cases.

It’s no surprise that 74 per cent of survey respondents overwhelmingly prefer claiming their hospitalisation insurance through their advisors. Advisors play a valuable role in collecting and compiling the necessary documentation to submit a successful claim.

Moving forward: what should insurers do to meet customer needs?

The people have spoken overwhelmingly in favour of looking online for information before making their purchase, relying on financial aggregators like MoneySmart to meet their informational needs. But it is striking that only half of respondents get their information about products from the insurers’ own websites. 

To improve on this metric, insurers need to be more transparent and objective, highlighting exclusions and other relevant information rather than hiding them inside the policy documents.

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Customers like the convenience of digital services, but there is a significant needs gap in addressing customer doubts and questions online. Insurers should consider filling this gap via round-the-clock assistance from chatbots and/or human advisors.

From this, insurers can expect to personalise and consolidate insurance packages for individuals or families, so that customers can save themselves a headache from having to keep track of many moving parts — be it the terms of the plans they have, the many premiums they have to keep track of, and submitting their claims separately.

So… bots or bodies? The answer is both. While “bots” get basic tasks like purchasing and simple claims done, it is human “bodies” who expedite or increase the success rate of the buying and claiming process of insurance.