When it comes to financial planning, insurance is one of the most important components people have to include in their plans. Used primarily to guard against the unknown, insurance exists in many different forms – from life, health and critical illnesses to travel, car and even maid insurance.
The first insurance policies were sold as far back as the third millennia BC for Chinese merchants to pool their risks by spreading their cargoes across many vessels. This prevented total loss for any one merchant should one of the vessels capsize during shipment.
Over the millennia, policies evolved with the changing needs of the people of that time. They started including individually sold policies and even policies for people’s health, life and possessions. Today, technology and on-demand products and services are disrupting many traditional businesses. This includes companies in the insurance industry, and they have to evolve to stay ahead of their competitors.
Here are three new and novel products in Singapore that are doing its part adapt to the new requirements and preferences people have today.
#1 AIA Diabetes Care
On 23 March 2017, AIA started selling its AIA Diabetes Care critical illness (CI) coverage. Targeted at people who are already diagnosed with Type 2 diabetes, this insurance product is unique in covering people who already have a disease – diabetes.
Diabetes is a disease that is prevalent in many developed nations. In Singapore, it is estimated that close to one million people will have Type 2 diabetes by 2050. This means that one in three people will contract the disease in their lifetimes, and approximately 30% of them will be under the age of 40.
The biggest problem, however, is that 1/3 of these people, or more than 330,000, may not even know they are at risk of contracting one of the major illnesses associated with the disease.
Those who purchased this policy will receive a cash payout, of up to $250,000, upon being diagnosed with a condition under its coverage. Common complications for diabetes sufferers are covered, including blindness, coronary artery bypass surgery, heart attack, kidney failure, stroke and amputation. It also allows policyholders to purchase an additional rider to cover for cancer.
#2 Aviva Travel Insurance
On 8 June 2017, Aviva announced that it will be enhancing its travel insurance policies and riders with a first-in-market feature to cover for changing the dates you want to travel for any reason. You will be able to claim up to 50% reimbursement for such a claim.
For those going on holidays that will include golfing or some water sports or winter sports, their policy presents the types of activities and limitations of its coverage in a transparent manner. This is beneficial to buyers who will know exactly what to expect.
In addition, it will also be including additional coverage for destination weddings and photography. This means you will have a peace of mind with insurance that will cover insolvency to any of your vendors as well as provide personal liability cover in the scenario where guests get injured, there is damage to property or you lose wedding dresses, accessories or other related items.
#3 MSIG’s UMax Private Motor
After a successful pilot study, MSIG is rolling out its usage-based motor insurance policy. What this means is that drivers will pay a policy that is comparable to how safe of a driver they are.
In its current form, drivers are usually given a rebate on their car insurance policies if they do not make a claim on their policy. This allows some drivers to debate whether they should make a claim on their policy, and lose out on the rebates, after accidents.
MSIG’s Umax Private Motor takes this a step further by incorporating technology and a pay-as-you-drive feature. In its study, MSIG claims that drivers who used their telematics device were encouraged to drive better.
Those who sign up will have a telematics device professionally installed in their cars for the purpose of recording and studying data. Their driving will be assessed based on distance, speed and driving style (braking and accelerating), and they will be given a score – Green, Yellow, Orange or Red.
As a value-add, drivers can access their driving data, via smartphones, to make improvements to their driving as well as locate their vehicles in Singapore and West Malaysia.
In the event drivers are involved in accidents, you can bring down your damage excess by up to 100% if they achieve a Green score (50% for Yellow; standard for Orange and Red scores).
Consumers Should Embrace Change
While not all change may be positive, consumers should encourage companies that try to innovate their services. Many of you can already start comparing insurance policies online, the way you do with your airfares and hotel or Airbnb bookings currently.
In addition, these three innovative products we mentioned above do provide consumers with a better experience and/or more transparent service. This can only be positive for consumers.
With more of these products coming into the market, consumers also need to ensure they know what they’re buying as many of them tend to differentiate themselves slightly to avoid consumers from comparing them too closely.
Have a specific insurance question that you wish to ask? DollarsAndSense is teaming up with fundMyLife to help get your insurance questions answered – for free. You can get personalised answers from a pool of handpicked, professional advisors. You can find out more about advisors on fundMyLife.