Stuart Green, Interbrand’s Asia Pacific CEO interviews Chris Wei, Aviva Executive Chairman, Asia and FPI Global Chairman, Aviva Digital. Chris talks about how Aviva is confronting changes in how consumers are buying insurance, and how Aviva is utilizing technology to drive deeper customer engagement and generate greater business growth.
What are the most significant changes expected in the insurance industry in Asia over the next 5 years?
I would say that the biggest change is going to be in distribution: moving away from major agency forces that are tied and very expensive, and exclusive bancassurance arrangements that were the norm. Changes in distribution will fundamentally shift the economics. At Aviva, we have realized that these arrangements don’t strategically progress our agenda in a sustainable way. We don’t think this is good for our customers; we don’t think this is good for our shareholders.
What we are trying to do is to rethink insurance, take away all the pain points and offer what’s in the best interest of our customers in each marketplace. We have already made dramatic changes in terms of shifting towards an open platform model, which is more independent and acts more as an advisory channel. The goal is to implement a direct engagement strategy that complements traditional face-to-face channels. What we are currently doing in the UK—which we will export to Asia—is trying to understand how potential and existing customers think about different product options, making it very frictionless for them to purchase, while removing a lot of legacy issues—such as high commission rates—by re-defining our business model. That’s probably where we are investing most of our attention and time, and therefore will be the most disruptive.
Where are you seeing the most success in driving deeper customer engagement?
We engage customers with value-adds. When we understand their needs and offer a well-rounded proposition, when we reward loyalty, and when we put a bit more control in their hands—that is when we see the deepest level of commitment and engagement with the Aviva brand. It is not just about having an online platform or a website, it is really about delivering a great experience.
In the UK, an existing customer who uses our digital platform is six times more likely to purchase another product compared to an intermediary customer who interacts through an agent. When we make very relevant offers to our customers and make the whole purchase journey frictionless, then the conversion rates are higher.
What is driving your customer experience principles?
Our brand thinking around digital retail encompasses three things: One is simplicity: We try to make it very easy for people to understand an industry and product mix that has been historically very complex. The second thing—despite being a buzzword—is empowerment, or putting control in the hands of customers so that they can do things when they need to do them. And the third is rewarding loyalty.
This three-pronged model allows us to genuinely implement our principles and re-allocate resources towards our growth goals.
There is no such thing as a single channel anymore. Customers will approach Aviva in different ways, depending on what they need and where they are. When it is a somewhat complex problem, they want an advisor. When it is something very simple like car insurance, it’s a fairly sequential purchase process. We don’t think across traditional silos, we think in a more omnichannel way.
What can you tell us about the benefits of Aviva’s “Digital Garage” initiative?
Our Digital Garages are dedicated spaces where creatives, technologists, and commercial teams come together to develop innovative insurance services that are tailored to our customers. There are a few things that led to this initiative. One was the realization that if you want to free yourself from the encumbrance of legacy, then you have to separate yourself from it. And that’s what we did: we separated the digital distribution business from the manufacturing unit, which freed up both businesses. Second is that we’ve centralized all of the investments globally. In reality, nobody spends a little bit of money on digital and makes a large impact. So we’ve centralized the global pool. For example, Singapore is implementing the Digital Garage, which was built in the UK, at about 10-15% of the original build cost. This is very efficient. Otherwise, smaller markets could never keep up.
But most importantly, it is about bringing in the right talent that has the relevant expertise. IT people, for instance, might know how to program a system but they have less experience in building the latest architecture for an exceptional digital experience. Equally, you might have an actuary who is very good at modelling—but the best customer analytics people don’t model. They find patterns in data, and they draw insights from those patterns, which is a fundamentally different skill set. This took us a while to realize.
One of the things we are seeing is that brand partnerships are getting more and more important in enhancing the customer journey. Are you seeing this yourself?
The simple answer is yes. For example, in the UK, we are the first insurance company to adopt Alexa, Amazon’s voice-controlled personal assistant. Very shortly, you will be able to say, “Alexa, ask Aviva for my pension account value today,” and she will give that to you. Shortly thereafter you will even be able to use Alexa to transfer funds. This is an interesting experiment because it is a new media through which to engage. Focus has shifted from the PC to the tablet to mobile and now likely to voice-activated AI. Who knows what’s next? But we are forging ahead in terms of how customers want to conveniently interact with Aviva as a brand. That’s why we are trying to create a quick proof of concept and continue to build Alexa into relevant offers.
The important thing about future partnerships is that it is not about what Aviva wants, it is about what the customer wants when they use a partner service and how we can respond to that in the most relevant way. This is a pretty significant paradigm shift, but it’s also the fun part. It takes a lot of hard work, but I believe the payoff will be meaningful.