Decoding Digital Insurance Transformation across Asia

Robert Kosova, Chief Executive Officer & Executive Director, QBE Asia, shares his insights with Insuretech Connect Asia, decoding how insurers must balance insurance innovation strategy across incremental, adjacent, and disruptive innovation in insurance.

Robert Kosova is a very experienced leader, practitioner, and scholar in risk management and insurance who understands the importance of balancing compliance and innovation. He believes empowering people to make timely decisions based on information is essential. He strives to simplify the complex, allowing for collective progress. 

What do you see as the biggest opportunities for the insurance industry over the next decade?

The future of the insurance industry depends on its ability to continuously adapt to complexity and uncertainty. Insurance industry in Asia has long flourished in an uncertain environment; from the earliest marine insurance policies, which enabled global trade and shipping, to today's environmental and health risks, the insurance industry has a history of being nimble and able to respond to uncertainty. As the world becomes more unpredictable and complex with risks ranging from global warming, increased natural catastrophes, and health protection gaps, especially in Asia, insurers have an opportunity to provide protection and stability in increasingly volatile times.

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An emerging opportunity exists around how insurance can support climate resilience. Globally, an estimated $5 trillion is needed for sustainable infrastructure to meet net-zero emissions targets. Insurance should play an important role in enabling this work to take place. Without appropriate insurance, projects of such scale will struggle to find financing. This is a real opportunity for insurers to embrace complex risk-taking and support long-life-cycle asset development, enabling insurance to support a more resilient and sustainable future.

In what ways can insurers prepare for the evolving expectations of the next generation of customers?

Insurers in Southeast Asia will have to rethink their approach to customer engagement. Unlike long-standing "customer-first" industries, such as retail and FMCG, the insurance industry traditionally has a strong product focus in the first instance and a customer focus when there is time. Now, the opportunity for insurers is to realign brands around customer-centric insurance models.

The traditional insurance sector is under threat, as technology companies such as Google and Tesla are now relentless in their pursuit of market share within the insurance ecosystem. Insurers can no longer rely on traditional, legacy paradigms and must shift to a "customer-first" mentality by first understanding next-gen insurance customer expectations, their needs, mapping their journey, and adding real value at each touchpoint. The key to this is customers in the "Moments That Matter", working backwards to design insurance offerings that revolve around those experiences. Committing to customer-first philosophies within organizational culture and investment priorities is now vital for independence and longevity.

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How is your organization embedding customer-first strategies into daily operations and decision-making?

Since 2018, our organization has reset our strategic priorities and vision to show our firm commitment to customer-centric insurance. The focal point of our leadership and the story we tell is around the struggles our customers face, be it protection gaps or price consistency.

In Asia specifically, we have made distinct investments into building a dedicated customer team focused purely on customer journey in insurance, mapping, pain points, and service delivery. This team measures what is 'one-off' in our offering and finds ways to scale it. We believe that putting the principles of customer first will not only differentiate us in the market but also lead to smarter, more agile decisions that are connected to our long-term strategy.

How can insurers foster a culture of continuous innovation while still managing risk effectively?

Insurance innovation and risk management do not go hand in hand, and they become best when they are driven together by a common purpose. Once the purpose of innovation is positioned on the provision of improved results to the customers, the trade-offs involved are far less ambiguous and navigable.

In terms of structural approach, we deal with insurance innovation strategy at three levels. The first is the incremental innovation, and in this, we carry on making small changes to existing products on which customers still insist. The second one is adjacent innovation, in which we consider adjacent services like avoiding risks. Through data insights, we are finding characteristics of low-risk behaviors and integrating positive risk reduction as a part of what we provide.

Disruptive innovation in insurance is the third level, which entails designing a completely novel idea of products and embedded insurance models. This involves digital distribution and other forms of service distribution. Although it is now a relatively smaller element of our strategy, we anticipate that in the next five to ten years the strategy on disruptive innovation will increase dramatically.

Our effort allocation is approximately 80 per cent incremental, 15 per cent adjacent, and 5 per cent disruptive innovation. With time, this ratio will change as the industry develops, and we will have provided our teams the breathing room to experiment, learn, and at times fail, but innovation cannot occur without some degree of managed risk.