Only one in 86 people in Myanmar hold an insurance policy today, according to UK research firm Timetric. But with the country’s insurance market set to undergo some degree of liberalisation at the end of 2017 — and with a population of 55 million people — the potential for growth is exponential as insurance penetration increases over the next 10 years.
Asia Insurance Review projects that total insurance premiums generated in the Myanmar insurance industry are expected to reach $2.8 billion by 2030.
Technology can help insurers achieve this potential growth. At a recent event hosted by CSC in partnership with AcePlus Solutions in Yangon, Myanmar, I shared five considerations for implementing insurance technology and systems in Myanmar and ideas for driving this market forward:
1 Understand market velocity vs. current state
While the current state of technology adoption in Myanmar may not be on par with other Asian markets, it is shortsighted to consider only the current state. The potential for technology adoption by both enterprises and consumers is enormous. This provides a great opportunity for insurance players and technology players to come together to build a better system that can move Myanmar into the top tier of Asian economies in terms of insurance technologies quickly.
While business-to-consumer technology is a common part of the insurance landscape in mature markets, it is not a common feature of the ecosystem in Myanmar. But do not be fooled; the citizens of Myanmar will move quickly to adopt the technologies that are common in countries throughout ASEAN, and the pace of adoption will be unprecedented.
2 Focus operations on technology deployment
The current regulations in Myanmar do not leave room for companies to compete on products. This limits the possibilities in terms of responsiveness to consumer demand. While the larger global insurance space is very focused on customer-facing technology innovation, the opportunity in Myanmar should focus specifically on how to improve the internal operations of insurance enterprises.
What this means is that investment should focus on reducing the friction internal employees face in providing services to customers eg core policy administration, paperwork reduction and employee-facing technologies in order to build competence in IT and to make operations more efficient. This efficiency will allow for companies to increase profits on existing services. Further, the focus on employee experiences will lead to greater retention and employee satisfaction.
While client-facing technologies would seem to give companies an edge, the current market will move towards players who are easier to do business with. This is not necessarily the same thing as having customer-focused systems of engagement.
My experience in the industry has taught me that the unique usage patterns of a market need to be a core consideration before an effective system of engagement can be deployed. These systems of engagement can be field-tested by building out the capability in an employee-facing environment, without the expense and risk associated with going directly to consumers in an uncertain market. Companies need to take the time to optimise systems for employees, and only then take those lessons learned into the consumer market.
3 Adapt internal architectures for the consumer market as regulations are relaxed and technology matures
Companies that focus on the internal employee experience will be uniquely positioned once the regulations restricting product diversity are relaxed. The velocity of technology adoption will provide an opportunity for fast movers to take the lessons learned from making employees happier, to making customers happier.
With a bit of modification, the high touch systems which can reduce friction for internal employees, the associated business process and the workflows deployed can work to build loyalty in business to consumer transactions. The systems of analytics which measure productivity of business processes can, with minor modifications, measure the effectiveness of workflows that are customer-facing.
Once the consumer-facing systems and associated analytics are collected, smart insurance technology users will be able to develop products which respond to key market demographics with more certainty. Product innovation is always costly and risky, even with the best IT systems the market can offer. In order to de-risk this transition, insurance companies in Myanmar need to take the time to understand how their customers want to engage, and build products centered on an optimised engagement model.
4 Partner locally
For insurance players in the Myanmar market, it is absolutely critical to have local feet on the ground – a local guiding hand who can help companies to navigate the technology adoption challenges is a key requirement. Local language, regulations and customs are all potential landmines that multinationals need to navigate. Attempting this navigation without a local guide is a fool’s errand.
Local partners will also be able to advise on what are sure to be the unique adoption requirements for consumer technology in the region. Even as companies collect data and optimise operations, a local partner will continue to be a solid investment. Consider your partner carefully – in order to be successful, think about long-term relationships. Myanmar is not a market that can be understood overnight.
5 Know price matters
In order to advance the technology evolution taking place within Myanmar, insurance companies require a price point appropriate for the market. Clearly, pricing that would be entirely appropriate for Singapore or Malaysia will not be acceptable in Myanmar.
Insurance companies should also look to the early adopters – companies that are moving to provide services in Myanmar now. Insurance enterprises should focus on the opportunity to become trusted technology advisers. If your partner’s time horizon for realising profits from an investment in Myanmar is short, you will be unlikely to find success with that partner.
Myanmar presents a unique opportunity in Asia due the state of the market, the likely velocity in terms of technology adoption and its unique culture and environment. I am very excited about the possibility to help enterprises in this dynamic market and look forward to my next visit where I am sure I will see the beginnings of real technological change and the maturation of the insurance market.
Daniel Angelucci is the Chief Technology Officer for Asia, Middle East and Africa for CSC. As regional CTO, he is responsible for promoting the CSC technology story in the region as well as helping to shape the future technology direction of the organisation.