These were just some of the key topics raised during a discussion with Edward Moncreiffe HSBC’s CEO of Global Insurance, during Insurtech Insights Asia in Hong Kong recently.

Moncrieffe took to the stage with Insurtech Insights Asia President Hung Wai Wong, to discuss some of the industry’s biggest challenges and changes, and was not afraid to address concerns about AI versus human roles. 

“AI will never replace the trust that a customer has with an intermediary or with an institution in my lifetime,” he said. 

“I think what AI will do and what we are piloting, and I’m sure others are piloting right now, is how does AI make agents and intermediaries more productive? And how does it minimize risk? Because when you’re dealing with large distribution forces, as we are in many different markets in Asia, the risk of things like training of financial planning, tools of product selection of sales quality, of dealing with potentially vulnerable customers, all of these things, you have inherent variance risk.” 

He went on to say that AI is not a substitute for human interaction in the insurance industry. Building trust is paramount, and the human element will remain irreplaceable in establishing strong customer relationships. “AI provides a way to manage that risk, standardise those operating procedures and ultimately make agents, make intermediaries, brokers and bankers more productive.”

Moncreiffe listed ways in which the technology is empowering humans, and gave a number of examples. He said AI can be used to:

• Increase Agent Productivity: By automating routine tasks, AI can free up agents’ time to focus on complex customer needs and provide more personalized service.  
• Minimize Risk: AI can analyze vast amounts of data to identify and mitigate risks associated with areas like training, product selection, and fraud detection.  

Crypto and Beyond

Advances in innovation will also see changes to the payments space – including the use of cryptocurrency – which pose unique opportunities and challenges. 

In answer to Hung Wai Wong’s question about the role of decentralised finance in insurance, Moncreiffe said that specialty insurance providers will potentially be exploring ways to manage the inherent risks associated with these unregulated assets. 

“If you were to go to Lloyd’s of London right now, or Bermuda, you’d see quite large capital pools being allocated to effectively cyber risks and asset risk carriers and specialty lines players trying to solve for this exact question because the inherent risk of a currency or of an asset that is unregulated is much higher. And without insurance it’s only going to increase.”

He continued: “So that would be one question within my field in life and health, I’m sure someone will try and put in a kind of index linked crypto fund into a class C product at some point whether SFC or IA will ever allow for that. I’m skeptical. So I think on the life and health side, not any time soon, but on the PNC side, and this is where London, Bermuda and I would hope Hong Kong can start to build that capability to price and manage that risk.”

Attracting the Next Generation

As the industry continues to transform digitally and require greater innovation and technology experienced experts, the war on talent looks likely to become ever more competitive. Moncrieffe said that the insurance industry faces a challenge in attracting young talent, because many graduates don’t perceive insurance as a dynamic or innovative field.

“Without stereotyping, insurance is normally not the first choice. We all want to go into more glamorous sectors of finance or commerce or other things. So there is a historical reputational overhang on our industry that we need to continue to chip away. 

“I think if you were to look at the average age of insurance practitioners… the industry is aging. You’ve got life insurance, then you’ve got life insurance intermediaries, then property and casualty insurance. And then at the highest is property and casualty. Intermediaries are aging the fastest. How do we bring more people into our industry? You have to invest, and change the reputation.”

He concluded by saying that focusing on technology would be an attractive prospect for market newcomers and highlighting the use of AI, data analytics, and other cutting-edge technologies can make insurance careers more appealing. Structured programs and mentorship opportunities can help nurture the next generation of insurance leaders.

“By embracing AI as a partner, fostering innovation, and investing in young talent, the insurance industry can ensure its continued success in the face of a changing landscape,” Moncreiffe added.