Insurance companies in Malaysia are adapting to the Internet of Things (IoT) in gaining customer loyalty, especially among the younger generation. (Pix by SALHANI IBRAHIM)

KUALA LUMPUR: Insurance companies in Malaysia are adapting to the Internet of Things (IoT) in gaining customer loyalty, especially among the younger generation.

“We’re starting to see the insurance ecosystem change and this includes talent development,” said Malaysian Insurance Institute (MII) chief executive officer Datuk Syed Moheeb Syed Kamarulzaman.

“The expanding IoT is opening up new opportunities for both personal and commercial lines. Smartphones have become a core element of our daily usage, including financial services such as insurance coverage,” he told reporters on the sidelines of the “Talent Development Seminar 2017” held here today.

“Insurers are likely to capitalise on the use of sensors in vehicles, homes, and businesses to avoid occurrence of untoward events,” said Syed Moheed, adding that this move will result in more efficient claims and underwriting results.

“Many are starting to facilitate new types of coverage and risk-mitigation services based on real-time information.

“Early adopters of innovation in insurance technology will be able to provide these and win customer loyalty, particularly among those who are digitally savvy,” he said.

Syed Moheeb went on to say peer-to-peer insurance model could be introduced in new financial technology (Fintech) and insurance technology (Insuretech) initiatives.

He touched on Friendsurance, a German based Insuretech business which allows groups of people to pool insurance premiums together and offer an annual no-claims reward, and the American Lemonade scheme that channels underwriting surplus to the insured’s favourite charities.

He explained that the concept of peer-to-peer insurance solution uses social networks such as Facebook to bring customers together to the business.

Customers can connect online and create their own insurance pool. Small claims are paid out of this pool, with bigger claims covered by traditional reinsurance.

If the claims do not exceed the pool, the money is returned to the customers. Customers never pay more than their original premium. The more friends in the pool and the fewer claims means the more you save.

In embracing new ways of doing business such as that of peer-to-peer platforms like Friendsurance, Syed Moheed said insurance companies are seeking higher grade talents with more sophisticated and specialised skills, such as data scientists and social media experts.

MII will continue to organise seminars and conferences to facilitate sharing of best practices and expertise so that more insurance agents are benefiting and contributing to a knowledge-based economy, he added.

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