Rising competition, low interest rates and feeble returns are just some of the factors pushing Transamerica Life Bermuda towards product innovation and digitalisation.
In August, the high-net-worth (HNW) insurance provider introduced a concierge and security service, called TLB Eminence, in collaboration with Ten Lifestyle Group and SafePro Group.
The complimentary membership is available to the firm’s bigger policyholders, and helps members book travel, dining and live entertainment, among other luxury services.
CEO Marc Lieberman said that the firm, which currently operates only in Hong Kong and Singapore, is exploring such services for client outreach as competition heats up in the insurance industry in Asia.
‘We want to find a better way to connect with our customers because we're not selling to them, we are dealing with intermediaries. The level of competition is very fierce. There’s been a lot of new entrants,' Lieberman told Citywire Asia.
Headquartered in Bermuda, Transamerica is a subsidiary of Aegon Group. It distributes universal and term life insurance policies through financial intermediaries, such as private banks, in Hong Kong and Singapore.
Universal life policies are highly sought-after in the Asian HNW market, where the life insurance policy penetration rate is currently close to 10%, according to a recent Transamerica survey.
Looking ahead, Lieberman is also exploring the idea of launching an indexed universal life policy, an insurance offering gaining traction globally.
As the name suggests, indexed policies give the policyholder the opportunity to allocate some funds to either fixed income or equity indexes.
These hybrid policies cap the maximum return for investors, but guarantee the principal amount invested in the indexes.
‘It is somewhere between universal life and variable universal life, in that your money is invested into an equity index so you have some protection, but you get some equity returns,’ Lieberman said.
However, the chief executive is certain that he doesn’t want to enter the variable universal life market, deeming it as more of a retirement accumulation vehicle based on regular payments.
Transamerica focuses more on long-term, estate planning needs best expressed through universal life policies, Lieberman said, adding that the insurance provider runs US dollar-denominated, conservative fixed income portfolios for clients as a result.
Close to 94% of the investments are in investment grade bonds, particularly US corporates, with the rest in emerging markets and high yields bonds.
‘We don't invest in equities on our general account, we don't invest in real estate,’ he clarified.
In Singapore, where Transamerica has about 12% market share, the number of people employed in the insurance industry grew by 12% year-on-year to 7,671 in the first half of 2018.
Most of this growth can be attributed to hiring for business development as well as digitalisation and data analytics, according to the Life Insurance Association of Singapore.
Like his peers, Lieberman also wants to introduce digital tools to draw private banks, brokers and end-customers to the firm.
The insurance provider is considering tools - including a mobile application - that turn around client requests quicker and speed up the underwriting process.
‘There's two parts of the policy - protection and the significant investment that they [clients] put in because that grows day by day,’ he explained.
‘The idea is that if we build an app, with their thumbprint, they can log in and it can show them what the current value [of the policy] is.’
While the app is expected to give customers immediate access to their portfolios and policies, it won’t give them the ability to transact or make changes, Lieberman said.
‘There's a misconception in the industry that digital is a strategy. Digital is really a tool to enable you to do better for the customer,’ he concluded.