SMU001

g&m: DIGITAL TRANSFORMATION OF AN INSURANCE AGENCY

In December 2020, Douglas Chia, Managing Director of General & Marine Brokers Pte Ltd (g&m),
contemplated whether there was a sure-shot way of understanding consumer behaviour and tapping
on it to improve business. He had just concluded a meeting with his senior management team to
brainstorm ideas on distilling the most feasible solutions for the digitalisation of his brokerage
services. Chia and his team wanted to deliver insurance products online with aggregator capabilities.
Additionally, the firm wanted to incorporate digital tools to deliver its existing products and services
to clients more efficiently. Although investing in developing an online platform and sourcing
technology tools sounded like a straightforward decision, in reality, it involved careful strategic
decision-making. Chia was preparing for a huge challenge in the coming year; delivering online
insurance solutions would certainly be an uphill task.

g&m was an insurance brokerage in Singapore and a market leader in motor insurance products. The
firm had started to digitalise some of its activities in 2019 and intended to launch a portal providing
online insurance products towards the end of 2021. It was also gearing towards the idea of setting up
an aggregator platform for various insurance products, which could provide relevant suggestions to
customers on the products that suited their requirements. To do so, g&m had to make some quick
decisions, such as deciding which features of product delivery it should digitalise first.

In 2019, g&m had achieved on-target revenue growth of 20%, but in 2020, it had achieved a revenue
growth of 30%, far exceeding its expectations. Chia wanted to maintain his firm’s stellar growth
trend. So far, he had attributed the growth to simplified processes that had helped his firm acquire
more customers. However, he knew that in the coming years, growth had to come from improved
consumer-targeting strategies in existing segments and new customer segments. Chia believed that
online product selling and processing, with data analytic capabilities, an aggregator platform and
digital tools, could help him do just that. However, building and offering online solutions at scale
would require strategic planning. What approach could he take to offer g&m’s existing products
online? What internal capabilities would he need to build to ensure that his firm offered digital
solutions to its clients seamlessly across online and offline channels? How could Chia manoeuvre
his firm across the digital transformation iceberg?

g&m

g&m was founded by Teck Kim in Singapore in 1975. The company, originally named General &
Marine Agents Pte Ltd, began operating as an insurance agency with a few large corporate accounts,
focusing on providing commercial and health insurance for businesses. Teck Kim was 39 years old

This case was written by Professor Gary Pan, Benjamin Lee and Lipika Bhattacharya at the Singapore Management
University. The case was prepared solely to provide material for class discussion. The authors do not intend to illustrate either
effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying
information to protect confidentiality.

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 SMU-21-0031 G&M: Digital Transformation

when he started the company, prior to which he had worked as an insurance agent. He had chosen to
focus on serving general insurance corporate customers based on his experience providing insurance
services to businesses, as well as advice from friends. Slowly, the business expanded to a staff
strength of seven, and the company changed its status from an agency to a brokerage firm, renaming
itself as General & Marine Brokers Pte Ltd in 1990.

However, the business environment in Singapore shifted with an increased focus from the
government to make the nation a financial hub for Asia. In order to attract foreign insurance
companies and brokerages, the government began to issue new licenses to spur competition and
increase the competency level in the industry. Local insurance players were forced to consolidate or
be acquired. Brokers like g&m were affected as the regulatory environment became more stringent,
and new compliance laws were put in place to control the sector. As a small firm, g&m realised that
it did not have the manpower to cater to such regulations and converted itself back into an agency.
However, stiffer competition drove the business into further difficulties. By 2010, Teck Kim had
given up his office and was operating just by himself, along with a dispatch staff, working from a
‘free’ desk at a friend’s insurance office.

Teck Kim’s son, Douglas Chia, a business graduate of Singapore Management University, had
started looking for a job in the banking industry after graduation. He did not want to join his father’s
business as he had dreams of becoming a successful banker. Chia joined Barclay’s Capital in Hong
Kong and worked as an equity trader with the company for several years. He then joined Citigroup
and worked there for a few years, witnessing the banking industry go through the 2008 financial
crisis. He later moved to Tokyo, where he experienced the harrowing experience of another market
crash when the city was hit by an earthquake in 2011. In 2012, Teck Kim became terminally ill, and
Chia opted for a career break, flying back to Singapore to take care of his father. Unfortunately, his
father passed away in 2013, leaving Chia his frail insurance agency business to take care of.

Chia decided to revamp his father’s business and give it a new life. There was then a social stigma
in Singapore amongst the younger generation about taking over such a small family-run business.
Chia recalled, “Insurance agencies at that time were still working in the same traditional way that
they had been working for the last 100 years. Young people refused to join such businesses. It was a
very manual way of running, and the industry just couldn’t attract any talent.”

In 2013, Chia started by digitalising all the existing paperwork in his father’s small office in the
Central Business District of Singapore. With more than 20 years of data to export, it took him three
months to scan all the documents and create a database. He sorted all the paper and discarded
everything that had ceased to be of relevance. Chia recalled, “I netted US$600 by selling the recycled
paper to the karung guni (recycling collector) man. That is the amount of junk we had to sort through
to create our database from scratch.” He then focused on sales and went on a ferocious market drive
to acquire new clients. He also renamed his business g&m Pte Ltd., as he wanted his company to
represent simplicity for insurance.

A New Life

While the first year was financially painful, g&m was able to capture 75% share of the motor
insurance market in the following few years and succeeded in signing an exclusive deal with two of
the largest motor insurers in Singapore. Chia soon learned that turnaround time, speed, and efficiency
were critical in the insurance industry. However, as g&m delivered its services manually, its response
in repricing through multiple price points was slower, leading it to lose out on some key projects that
it was targeting.

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 SMU-21-0031 G&M: Digital Transformation

Building a Niche in Motor Insurance

g&m established its first major deal for car insurance with Eurokars in 2014. Eurokars was the largest
privately-owned car distributorship in Singapore for luxury cars 1 , with a regional presence in
Indonesia, Australia, and China. This partnership deal generated rich dividends, as motor insurance
was the largest segment of the general insurance market and dealings with large car dealers spurred
growth for the company. Moreover, clients of luxury cars were high-net-worth individuals. A key
marketing strategy that g&m implemented was to market other relevant insurance products to these
clients. Chia shared,

People who buy high-end cars are usually affluent, with high spending power, and own a business
as well as multiple cars. This presents a company like ours with many opportunities in terms of
growing our business. People don’t like complexity, and they don’t like too many touchpoints to
deal with for their insurance needs. If they could deal with one provider, life becomes easier for
them, and they are happy.

Chia also took additional practical approaches to grow the business further. Instead of looking at
individual policies, the company started looking at the risk portfolio of the individual in totality (i.e.,
composite risk from all the insurance products they were using). This approach allowed the firm to
provide better pricing to its end-clients. For example, if an individual with five cars took out
insurance separately for each car, he would have to pay five times the premium of one car, but if he
chose to pool them all with g&m, the firm would rationalise that he could drive only one car at any
time and charge him at most thrice for the five cars. Besides, if he had other insurance products to
add on, that would further justify the case to lower his total premium. It was similar to a bulk discount.
The idea was to look at every client from a portfolio level (refer to Exhibit 1 for g&m’s Supercar
Insurance product).

g&m started acquiring more clients, and diversified into retail and individual clients, moving away
from large corporates. In the four years, from 2014 to 2018, the firm’s client base increased by 7,000%
and revenue grew by almost 1,000% (refer to Exhibit 2 for g&m Revenue Growth over the years).

Lean Methodology

Chia realised that he would need to incorporate more digital tools to further expand his business and
cater to his existing clients more efficiently. To begin with, he engaged KPMG2 and implemented a
lean methodology in his firm’s workflow processes to ‘go lean’. A prioritisation exercise was
performed to stack the value chain components of customer acquisition, distribution, claims
processing, policy servicing, and the finance function. Process amendments were then implemented
to reduce and eliminate duplicate and labour-intensive tasks and processes, thereby rationalising the
manual workload. Automation tools were developed to execute chores and free up time for staff to
focus on customer experience.

Simple process improvements like a shorter quote form were introduced to improve customer
experience. Traditionally, to get an insurance quotation, customers had to fill a long form with over
a dozen questions and several personal information fields. This process was laborious and would turn
customers away. Chia realised that the customer dropout rate could be greatly reduced if the sign-up
process was simplified. The original quote questionnaire would ask customers details like name,

1 Luxury cars or Supercars were high-end cars with superior performance, tougher build, advanced technology, and sleek design. They
included brands such as Mercedes AMG, Porsche, Ferrari, Lamborghini, Aston Martin, Bentley and Rolls Royce.
2 KPMG was a global network of professional firms providing Audit, Tax and Advisory services to MNCs, governments and nonprofit
organisations.

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 SMU-21-0031 G&M: Digital Transformation

identification number, gender, occupation, date of birth, driving experience, records of past accidents
and past suspensions, and address proofs. g&m reviewed this process and identified that only two
key components were truly required for a quote - the applicant’s identification number and the date
of birth. The quote questionnaires were then redesigned with just these two fields. Chia added,

This quote process restructuring provided clients an improved customer experience. Today, the
turnaround time for an application is less than an hour, as opposed to hours or days, which is
the industry norm.

In addition, internal tools were developed to generate reports for the firm’s insurance agents and
insurance underwriters to analyse data and create and view scorecards and dashboards. A knowledge
management exercise was executed to assimilate information and data from existing functionalities
to develop a transparent enterprise-operating model.

The ‘go lean’ process amendments helped foster process efficiency, generated savings, improved
profit and sales and enhanced customer experience. Every cent of profit was then fed back into
growth. Chia held meetings with all of his employees from various departments to get their buy-in
for the amendment of the processes and digitalisation of the tasks. However, this came with its own
set of challenges. Chia recalled,

For me, it was critical to get buy-in. However, it was difficult to get buy-in from some in the firm.
We had never reinvested our profits in growth in the past. People had a certain mind-set about
this. So, we had to make some hard decisions there. We let people decide whether they wanted to
go with the call of the business. Some chose to go separate ways. We did have turnover, but
growth always comes at a cost.

The lean method work processes also proved useful in many other scenarios. For example, when
g&m approached an insurer to secure the employee benefit insurance claims for a Canadian bank,
employees used to submit claims to their human resources department for collation before it was
passed on to the agent or insurer. However, g&m proposed that the employees contact them directly
to process their individual claim queries and submissions. This helped g&m build a more meaningful
relationship with the client, reduced the client team’s workload, and allowed employees to receive
immediate, pertinent advice about claim matters. The above model became a standard practice for
g&m and motivated the company to develop an online solution on its website for end-user claim
submission for its motor insurance products. The solution also allowed customers to submit original
receipts online to make medical and personal accident claims under their motor insurance coverage.

Agency to Brokerage

The motivation to convert from an agency to a broker came from the need to target more clients.
Insurance intermediaries in Singapore could be either brokers or agents, and their principal source of
revenue was brokerage or commission fees, which were dependent on insurance premiums. While
both brokers and agents could close deals with clients, an agent could only represent up to three
insurance companies, while a broker could work with any number of insurance companies.

Hence, Chia converted g&m to a brokerage in 2019, and started targeting a wider range of clients to
grow the business aggressively. However, opting for brokerage also meant increased compliance
costs and higher processing volumes for the company. g&m worked with referral partners who
brought in business and paid a significant cut of its brokerage commission to the partner. To
compensate for the lower profit margin, the firm tried to increase sales volume and generate
additional revenue from advisory services. Revenues for the company came in from mainly two

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 SMU-21-0031 G&M: Digital Transformation

sources – first, from brokerage fee, profit commission, and profit share from insurers, and second,
from service fees and consultancy fees received from clients.

The Insurance Industry in Singapore

g&m operated only in the Singapore insurance market, which was well developed and attracted some
of the largest insurance players in the world. The major classification of products in the insurance
industry was by Life (Life and Health), and Non-Life (Property and Casualty). Insurance was bought
directly through an insurance company or through independent agents and commercial brokers, who
provided access to the products of several insurers. The four largest insurance companies operating
in Singapore's life insurance market were Great Eastern Life, local insurance cooperative NTUC
Income, AIA, and Prudential Plc; collectively, they accounted for roughly three-quarters of gross
premiums written. The largest five non-life insurers in Singapore, each accounting for over 7% of
total gross non-life premiums written, were AIG Asia, AXA Singapore, MSIG, NTUC Income, and
First Capital. Following a long association with Singapore’s trade union movement, NTUC Income
had a lead position in the provision of motor insurance, health insurance, and other household lines.

As of 2020, there were 135 insurance brokers in Singapore. Smaller brokers striving to grow in the
market often used a niche strategy to venture into the market. 3 The Singapore government had
implemented strategies to promote insurance technology (‘insurtech’) innovation and the early
adoption of Artificial Intelligence (AI) by teaming up with corporates, home-grown start-ups, and
data science researchers. Technology adoption had allowed insurtech start-ups to develop digital
solutions to deliver services at speed – like rolling out claim payouts within 24 hours. For instance,
platforms like PolicyPal and Bandboo, both founded in 2016, had rolled out quick-service group
insurance solutions designed for small and medium businesses.4

The Singapore Insurance Customer

A large percentage of Singapore’s population were digitally savvy and open to making purchases
online. In a 2015 survey of insurance customers, it was found that, worldwide, insurance consumers
were generally better informed than before. Singapore customers, specifically, were quite well
informed about the insurance products they purchased. Over 80% of them did a fair amount of
research before their purchase or renewal of a policy, and more than 50% of Singapore respondents
made their purchase decision based on their research findings.5 The top sources of information were
word of mouth, personal recommendations, and advice from intermediary or agent.6

Globally, insurance consumers had high service expectations. However, for Singapore consumers,
customer service was a less significant factor when making purchase decisions; instead, product
features, financial stability, price, and trusted brand were perceived as the high priority factors when
purchasing life and non-life insurance products. The Singapore customer was price-sensitive and
expected enhanced value for their investment. They also wanted more clarity in the buying process
and better communication about product performance.7

3 Robin Amacher, “Carving a Niche in Asia's Life Insurance Market”, Hubbis, January 2, 2015, https://hubbis.com/article/carving-a-
niche-in-asia-s-life-insurance-market, accessed May 2021.
4 Ibid.
5 “Singapore Insurers to Rethink Customer Strategies as Consumer Attitudes and Expectations Shift”, EY News Release, March 15,
2012, https://www.ey.com/sg/en/newsroom/news-releases/news-release_20120315_singapore-insurers-to-rethink-customer-strategies-
as-consumer-attitudes-and-expectations-shift, accessed January 2018.
6 Ibid.
7 Ibid.

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 SMU-21-0031 G&M: Digital Transformation

Focus on Customer Experience

The insurance market globally was increasingly shifting focus from agents to customers and seeing
a switch in the ways products were delivered and consumed. Digital transformation was taking place
throughout the entire value chain, from sales and distribution to product development, underwriting
and claims management (refer to Exhibit 6 for the Insurance value chain). In addition, as mentioned
above, customers were using the internet in their decision making and product buying process. These
changes were spurring many insurers to consider augmenting or changing their adviser or broker
channels.8 For example, Singapore-based online insurance provider FWD had eliminated the broker
and agency channels to offer its products directly to end-consumers, using innovative solutions like
providing claims processing through messaging apps such as WhatsApp.

Insurers in Singapore had also started to take steps to become more customer-centric to enhance
loyalty and attract new policyholders.9 A global research study had cited the example of US auto
insurance carriers that had focused on providing customers with consistently best-in-class
experiences. These automakers had seen two to four times more growth in new business and about
30% higher profitability compared to firms with lower customer focus. The research had also noted
that satisfied customers were 80% more likely to renew their policies than unsatisfied customers
were.10 Customer contact and sales approaches were rapidly moving from traditional face-to-face
channels to digital platforms, while ‘super apps’ that provided various financial services through
single platforms were intensifying their influence on the market. In addition, ‘super apps’ from
platform companies such as Grab (Singapore) were emerging as active insurance sales channels and
transforming into integrated financial services platforms.11 These platform companies sold products
in partnership with insurers, but had more recently been attempting to launch their own businesses.
Grab, for example, which used to sell products of affiliated insurers, had expanded its presence in
the market by obtaining a non-life license in Malaysia and a joint venture with Chinese company ZA
International in 2019.12 Grab had also launched an ‘on-off auto insurance’ product using the Grab
driver app in 2016. In September 2019, Prudential had launched its first digital health platform,
‘Prudential Pulse by Prudential’ app in Malaysia, which managed customer health through AI and
real-time health-related data. The company had plans to introduce the service in 10 additional Asian
markets.13

The growth of insurtech and digital disruption in the insurance industry had started to plague the
traditional business structure of insurance agencies and brokers. Research reports suggested that
clients would continue to value broker and agent expertise and advice, but would have less tolerance
for pure middlemen in the near future.14 Many traditional brokers in Europe had therefore switched
to providing online aggregator services to sustain in the market. In fact, digital brokers providing

8 Ibid.
9 Claire Huang, “Insurance Disruption Fueling Customer-centric Innovations”, The Business Times, January 16, 2017,
https://www.businesstimes.com.sg/companies-markets/insurance-disruption-fuelling-customer-centric-innovations , accessed February
2019.
10 Tanguy Catlin, Ewan Duncan, Harald Fanderl, and Johannes-Tobias Lorenz, “The Growth Engine: Superior Customer Experience in
Insurance, April 2016, McKinsey & Company, https://www.mckinsey.com/industries/financial-services/our-insights/the-growth-engine-
superior-customer-experience-in-insurance, accessed February 2019.
11 Betsy Atkins, “Are Super Apps the Future?” Forbes, September 3, 2019, https://www.forbes.com/sites/betsyatkins/2019/09/03/are-
super-apps-the-future/?sh=57722d366fd5, accessed May 2021.
12 Ibid.
13 Jae-Park Jo and Jae-Beom Choi, “KPMG: Digital Transformation of the Insurance Industry in a No-contact Era”, KPMG, June 8,
2020, https://insuranceasianews.com/digital-transformation-of-the-insurance-industry-in-a-no-contact-era/, accessed February 2021.
14 “The Future of Commercial Insurance Broking”, CII Research Report, Chartered Insurance Institute,
https://www.cii.co.uk/media/9224195/future-of-commercial-insurance-broking-report.pdf, accessed May 2019.

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online aggregator services had accounted for more than 50% of online insurance services in Europe
by 2018.15

Recognising that the insurance sector was experiencing such tenacious alterations, Chia wanted g&m
to be in a position to benefit from the momentum. Looking towards the small and medium enterprise
(SME) clients, he wanted the aggregator tool to provide unbiased recommendations to this segment,
who would typically do extensive searches on the internet to find a product that suited their needs.
As business protection, especially liability insurance, gave businesses long-term peace of mind to
continue operating without the threat of unfortunate eventualities crippling their plans, the plan was
to offer SME clients insurance solutions in three areas: property, legal liabilities, and employees,
allowing them to make instant purchases and receive immediate cover.

Becoming Future Ready

It was only in 2019, after his firm reached a critical mass in terms of database size, that Chia started
seriously contemplating digitalisation of the customer acquisition and maintenance processes. The
focus was on digitalising the customer journey, acquiring customers through digital marketing, going
paperless and enabling transaction automation. This would drive sticky customer behaviour and
product cross-selling through online engagement.

Once some of the initial client contacts in the acquisition process were successfully made through
digital marketing methods, Chia and his team realised that there was a potentially infinite market to
be found on the internet. While in the earlier model insurance agents worked with car dealers and
agencies, the advent of online solutions meant that the firm could directly sell its products to end-
consumers without the involvement of any intermediary dealers who demanded bulk deal
negotiations and a percentage of the brokerage commission. Moreover, as new government
regulations in Singapore pushed towards automation practices in the industry, g&m started to pivot
slowly from business-to-business (B2B) to business-to-consumer (B2C) customers. Chia shared,

We are trying to move from B2B to B2C. Now the move is towards customer-centricity. Every
client is one data point. While volume in the B2C market is still low, we are encouraged by the
efficiency; it is seamless. We are also hiring. We are using robotics to eliminate chores, but still
require people on the business side. We are trying to eliminate chores. We now have more client-
facing people and are minimising admin jobs.

Strategies

However, Chia soon realised that digital transformation was not an easy journey. Replacing
traditionally manual business processes with digitalised processes was just the tip of the iceberg (refer
to Exhibit 3 for the Digital Transformation Iceberg Theory). Through his stint in the banking industry,
Chia had learned that people were not able to appreciate things they did not understand. Hence, using
online methods to sell insurance products required that the product be packaged in a way that a
layman could easily understand. This packaging would then need to be wrapped up with exceptional
sales service. At the same time, since insurance products often had complicated terms, it was
important that clients understood all the risks clearly at the time of the purchase. Chia, therefore,
focused on building a team that would pour their souls into client relationships. He also set up a
marketing team that could use digital marketing methods to pursue client acquisition for motor,
lifestyle, health and corporate insurance products from online leads.

15 Simon Kaesler, Johannes-Tobias Lorenz and Felix Schollmeier, “Friends or Foes: The Rise of European Aggregators and their
Impact on Traditional Insurers”, McKinsey & Company, Insights, Dec 10, 2018, https://www.mckinsey.com/industries/financial-
services/our-insights/friends-or-foes-the-rise-of-european-aggregators-and-their-impact-on-traditional-insurers, accessed May 2021.

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Segments

As at 2020, g&m’s customer segments mainly comprised retail customers (85%) and SMEs (15%).
Retail customers comprised motor insurance (75%) and lifestyle insurance (5%), while SME
customers consisted of health (4.6%) and corporate customers (10.6%). Although motor insurance
contributed significantly to g&m’s revenue, there was limited scope to grow further in this segment
within the existing market (refer to Exhibit 4 for the Motor Insurance Market in Singapore).
Moreover, significant referral fees paid to partners made it difficult for the premium price to be
competitive.

On the other hand, g&m saw more potential in the SME sector because large brokers (like Marsh)16
were not focused on this segment, and insurance agents did not have the necessary resources to scale
here (refer to Exhibit 5 for the SME Insurance Market). It was finally decided that the company
would continue to focus on the motor insurance segment, because it had significant prospects even
though the growth scope was limited. In addition, it would focus on the SME segment.

Options for Digitalisation

g&m aimed to scale in the SME segment by leveraging on technology solutions. The company
wanted to build an aggregator site that would allow online-savvy customers to purchase their
insurance policies directly through the site. This would not only enable g&m to target the segment
with fewer resources, but also propel a steady growth of its customer database, which could then
become an asset to the company and entice more insurance companies to build partnerships with the
firm. The idea was to create a critical mass and lead the industry by eliminating commission fees and
charging flat ‘platform fees’ to insurance companies who would want to use g&m’s site for their
products.

Chia had several options to contend with. The first was to tie up with a financial technology (fintech)
company to build the aggregator platform. The second option was to kickstart internal innovation.
With internal innovation, the idea was to add the aggregator functionality to the existing website,
encouraging employees to generate ideas from their everyday experience and relying on simple
methods—such as researching current trends, applying customer intelligence, identifying customer
needs, applying design thinking, and user-driven innovation—to implement process improvements
and redesign business strategies. The key to this process was employing brainstorming techniques to
come up with innovative ideas and create a knowledge share platform to discuss potential solutions.

The third option was to partner with technology start-ups by purchasing their services, licensing their
solutions or co-developing solutions. Typically, insurance companies collaborated with highly
specialised start-ups on new technologies that they could purchase to improve operations. One such
example was Cognotekt, which provided software as a service for insurers to automate claims.
Another example was Insurify, a personal insurance company that compared car insurance packages.
Yet another strategy involved partnering with other companies to offer services to customers by
bundling offers between two companies or by providing customers with new “white labelled”
products. The majority of the world’s largest insurers (AXA, Allianz, AIG, MetLife) had established
their own in-house venture capital (VC) funds and committed investment in start-ups.

Given the plethora of choices to collaborate on digitalisation, the decision to choose the right
approach required careful strategic decision-making. Chia shared,

16 Marsh (https://www.marsh.com/sg/home.html) was the world's leading insurance broker and risk advisor as of December 2020.

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I have 90% business that is traditional; I can’t invest 10% on the new, as my business will become
irrelevant in ten years. But if I invest 90% in the new business, my company will become irrelevant
in one-year’s time. I have to choose a balanced approach.

For offering online solutions, Chia decided to rely on the company’s existing website platform and
the CRM database it had built over the past few years. However, providing online aggregator services
was a more complex decision that required understanding all the risks such services could pose (refer
to Exhibit 7 for Challenges of Online Insurance Aggregator).

Strategy Considerations

Chia and his team held discussions to figure out what could be the best possible approach. Several
observations were made during the discussions. Firstly, brokers were in a unique position, as they
were recognised as trusted advisors who gave independent advice and had expert knowledge of
various insurance products and associated risks. Insurtech start-ups had tried to take over this unique
customer relationship from brokers but had found it quite difficult to market their new products
directly online.

Secondly, while customers preferred personal contact during certain stages of the process, they
wanted timesaving digital solutions at other times. Customers were no longer inclined to drive to
their broker for administrative matters. g&m realised that it had to consider striking the right balance
between physical and digital contact and become an indispensable link in the hybrid story.

Thirdly, some brokers had chosen to collaborate with fintech start-ups to become a technology
provider for the insurance market by simplifying the back-office and facilitating seamless exchange
of data, or building a platform that other systems could plug into.

Fourthly, there were risks to assess and consider due to the digitalisation of services across sectors.
Digitalisation had created avenues for new and more complex insurance products, such as an
insurance product for cyber risks or insurance for risks associated with the sharing economy. For
example, if a customer wanted to charge his electric car using power from his neighbour’s solar
panels, he would look for an insurance policy that covered both parties.

Finally, digital marketing was expected to become a part of every broker’s job, and a growing number
of brokers had invested in a website that was a search engine optimised with a social media presence.
To make the transition into a digitally-enabled insurance broker, Chia thought it was vital to actively
look for the best possible outcome. He tried to define his firm’s strengths and also understand what
similar companies were doing in neighbouring countries and other industries where digital
transformation was generally more advanced.

Chia asked his marketing team to conduct research to gain insights into how digitalisation had been
adopted by other brokers in different markets. According to a 2019 report surveying independent
insurance brokers across the US, Canada and the UK, the average for digital technology adoption at
an independent brokerage was only around 43%, although nearly 96% of them used a broker
management system for essential everyday operations. Interestingly, over 80% of them did not offer
any form of mobile apps or ‘self-service portals’ for customers or staff.17

Insurance Consumers Were Changing

17 Nivin Simon, “The ‘Digital’ Insurance Broker”, Mantra Labs, October 15, 2019, https://www.mantralabsglobal.com/blog/digital-
insurance-broker/#:~:text=According%20to%20a%202019%20report,day%2Dto%2Dday%20operations, accessed May 2021.

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 SMU-21-0031 G&M: Digital Transformation

Research reports had also observed that the demographics of insurance customers were shifting, with
younger consumers who preferred digital to traditional channels, leaving unmet gaps in the value
chain. Generation Z and Millennials were quickly emerging as the core of the target demographic
and a fully online brokerage could benefit these potential customers through simple end-to-end policy
administration and by fine-tuning the customer journey.

A few key areas in which adoption was growing included capabilities such as workflow process
management, document management, sales opportunities, and prospect tracking and one-system one-
view visibility into all departments. The downside of not provisioning employee mobility tools for
broker operation could alone translate to over 30% reduction in staff productivity.18

Data Was Important

While brokers were not involved in the manufacture of insurance products or the evaluation of risk,
several other value chain functions were being performed through brokers, of which managing the
customer relationship was pivotal. There was a lot of data across the lifecycle to look at, which
necessitated the need for advanced analytics to maximise the opportunities of upselling or cross-
selling. It was noted that data analytics was widely under-utilised amongst most insurance brokers,
leaving them blindsided by customer needs.19

AI and Social Media

Chia knew that revamping the offline business model with an online model required the
right business advisory and technical roadmap, without which the transformation could leave
unwarranted gaps in the operating structure. He was aware that technologies like AI could play a
critical role in securing brokerages to be future-ready.

AI-enabled tools could provide a brokerage with better business visibility, more unified workflows
and eliminate time spent managing and updating divergent systems. Analysing big data (predictive
analytics) and social media using AI could offer real-time insights for measuring risk, immediate
demands, and possible life changes for customers. Such technologies also promised enhanced ability
to a firm to justify value to clients and ultimately retain those customers. Leveraging automation
would improve efficiency in agent productivity and document handling processes. For instance,
enabling employees with remote digital tools could empower them to act quickly – from quoting
prospects to providing policy details and managing claims for existing customers, especially when
they needed it most. Brokers required next-gen customer engagement solutions to
maximise real customer lifetime value. Improvements achieved through the deployment of AI could
create significant gains in operational efficiency and RPE (revenue per employee).20

Could g&m ace the challenge?

There were a few obvious requirements that Chia and his team were convinced the company would
require. They started with identifying the actors involved in the system (customers and people inside
the company) by using design thinking and creative facilitation. They also conducted one-to-one
interviews with customers of the company to understand what kind of technology would better serve
their needs.

18 Ibid.
19 Ibid.
20 “Digital Disruption in Insurance: Cutting through the Noise”, McKinsey Monograph, 2018, https://www.mckinsey.com/~digital-
disruption-in-insurance.ashx, accessed May 2021.

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 SMU-21-0031 G&M: Digital Transformation

The team then investigated existing data to gain insights on how customers made insurance policy
purchase decisions, and mapped the user experience from the time the individual started thinking
about buying insurance all the way through to the actual purchase of the insurance policy. They
realised that they would need to build two solutions to support the aggregator platform – one would
be a model to perform market basket analysis, and another to build a customer segmentation tool.
The models would need to address the following questions: Which products were typically purchased
together? Who were the high-value customers that g&m could focus more efforts on, and could these
efforts be personalised according to their characteristics?

The other idea floated during the discussions was to build a financial dashboard that could inform
Chia and his team of significant increases in costs as the business expanded. Given that g&m did not
have any dashboard to notify management on whether its plans were on track, there was a need to
analyse financials deeper and understand performance metrics through insightful visualisations.
Additionally, the team wanted to develop predictive models for the purpose of cross-selling or
upselling of their insurance products. Such tools could be particularly helpful in aiding the firm to
expand its business in new market segments like SMEs.

2020 had been a year of Covid-19, when businesses around the world had been forced to explore
online options of doing business. Amidst such an environment, it was becoming increasingly
important for Chia and his team to serve their clients efficiently through online tools. The target to
launch their online platform in 2021 was fast approaching.

As he made notes from his last discussion, Chia contemplated on what would be the best approach
to adopt digitalisation in his business while targeting a new customer segment and maintaining
existing business. What should be their strategy towards establishing the aggregator platform? How
should they establish an online platform for delivering their existing products online? Were the ideas
that he had collected from his team commercially viable? Could they convert the naysayers in the
new target SME segment? Did they bring potential commercial benefits for the company, and were
they feasible to implement? How could Chia safely navigate his firm around the digital iceberg?

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 SMU-21-0031 G&M: Digital Transformation

EXHIBIT 1: G&M SUPER CAR MOTOR INSURANCE PRODUCTS

g&m Supercar Insurance Plan - Up to 25% off an existing car policy, comprehensive policy inclusive of free valet
coverage, unique perks such as track insurance extension, free inclusion of up to five named drivers.

Source: Company Data

EXHIBIT 2: G&M REVENUE GROWTH

Revenue change over the years

Year YoY % growth Cumulative growth after 2010 (base 100%)
2011 5% 105%
2012 -7% 98%
2013 74% 170%
2014 50% 256%
2015 60% 408%
2016 6% 433%
2017 27% 548%
2018 37% 749%
2019 25% 940%
2020 6% 993%

Source: Company Data

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EXHIBIT 3: ICEBERG THEORY OF DIGITAL TRANSFORMATION

The Digital Transformation Iceberg uses Sigmund Freud’s iceberg analogy to illustrate how the
conscious mind of digital leaders should be focused on far more than the tip of the digital iceberg. The
iceberg is designed to encourage leaders to look beneath the surface, and approach digital enterprise
transformation holistically. It helps leaders approach digital business transformation with an open mind
and primed to answer the question “what should we transform and how?” Many firms fall into the trap
of appointing someone with a very narrow view of digital transformation to lead the effort. It exposes
them to a similar risk that took down the Titanic, by not navigating what sits below the surface. While
customer-centricity, brand management, marketing and sales can be the visible parts of the iceberg,
there are aspects within the organisation, market and ecosystem that often do not present themselves as
visible parts of the transformation but require attention. Some such aspects are organisational mindset
and culture, knowledge management, inter departmental relationships, operational model, employee
readiness, governance, and innovation capabilities.

Source: Various sources, including Rob Llewellyn, “Digital Business Transformation Icebergs”, CXO Transform,
March 2, 2017, https://cxotransform.com/blog/6829/digital-business-transformation-iceberg , accessed January
2021.

EXHIBIT4: MOTOR INSURANCE MARKET SINGAPORE

Market Share of General Insurance Premium by Gross Written Premium (GWP)

The Singapore Motor Insurance market was estimated to grow at a CAGR of approximately 3% between 2021
and 2026. Motor insurance held the highest market share in general insurance in terms of gross written premium
(GWP) at 29% as at 2020. Cars were expensive investments in Singapore, as they entailed heavy Certificate of
Entitlement (COE) duties, increasing the car price by a significant percentage. Disposable income, economic
prosperity, and COE prices were major factors in determining one's ability to afford a car and 40% of new car
registrations in Singapore were reported to be luxury cars (including Aston Martins, Porsche and Bentleys) in
2020 compared to the 19-25% in the previous years.

Source: “Singapore Motor Insurance Market - Growth, Trends, Covid-19 Impact, and Forecasts (2021-2026)”,
Mordor Intelligence, https://www.mordorintelligence.com/industry-reports/singapore-motor-insurance-market,
accessed January 2021; Anastassia Evlanova, “What Singapore's Luxury Car Market Reveals About Income
Inequality”, Value Champion, August 1, 2020, https://www.valuechampion.sg/what-singapores-luxury-car-
market-reveals-about-income-inequality, accessed May 2021.

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EXHIBIT 5: SME INSURANCE MARKET SINGAPORE

The SME sector mainly comprised Singaporean enterprises (99%) and contributed to about two-fifth of the
country’s GDP and employment for about two-thirds of its population. Despite its significance to the country’s
economy, the SME sector had low levels of penetration in insurance protection compared to other mature
markets. In a survey, it had been noted that about 10% of Singapore SMEs were not covered by insurance at
all. Moreover, only half of the SMEs carried basic mandated levels of insurance. 21 Research had also found
that 69% of the SMEs in Singapore ran into at least one business issue in 2019.22 About 34% of SMEs were
concerned about unauthorised access into their systems, but only 17% had business protection for such
scenarios.23 The proportion of SMEs who preferred transacting insurance directly online had grown steadily,
reporting 8% growth between 2018 and 2019.24 More and more SMEs were demanding for an adequate policy
tailored to their needs, as they felt they could otherwise end up overpaying for premiums or have insufficient
cover to be properly protected. About 61% of SMEs in Singapore had an intention of internationalisation if
they had already not done so and looked for multi-market insurance policies where they could have a single
touchpoint with insurers in their home market.25 Insurance intermediaries acted as the go-between for such
businesses and insurers. AIG Insurance was a market leader, and provided SME insurance package with a
premium of US$191 (S$253)26 annually and covered more or less all risks ranging from property, public
liability, personal accident coverage, and work injury compensation for employees. UOB BizCare office plans
were priced at an annual premium of US$215.35 (S$285), and covered theft and burglary risks, cyber risks,
and electronic equipment insurance amongst other features. The third most popular insurance package was
offered online by Etiqa BOSS, and priced at US$181.91 (S$240.75), and covered business interruption,
personal accident, and work injury compensation and other benefits in the package. 27 Marsh & McLennan
(MMC), Aon Plc. and Howden Insurance (Howden) were some of the largest brokers in Singapore in terms of
revenue. Howden, the third largest broker in Singapore, provided comprehensive risk solutions for SMEs.28

Source: Png Cheong Boon, “Enterprise Singapore’s Strategy to Grow Stronger Companies”, Enterprise
Singapore, April 19, 2021, https://www.enterprisesg.gov.sg/blog/enterprise-singapore-s-strategy-to-grow-stronger-
companies, accessed May 2021.

EXHIBIT 6: INSURANCE VALUE CHAIN

Product/Service Marketing and Policy Claims/Benefits Asset

Development Sales Administration Management Management
Primary Activities

*Underwriting *Promotion *Transaction *Claims *Portfolio

*New Products *Target Markets Processing Submissions Management

Value to Customers
*Product *New Customers *Payments *Claims Settlement *AML
Value Proposition

Management *Cross Selling *Payments *Risk Analytics

Margins
*Delivery Channels *Upselling *Fraud
*Research
*Prevention and
Mitigation
Data Analytics
Activities
Support

Company Infrastructure (Finance, IT, Risk Management)

Reinsurance
Human Resources Management

21
“Top reasons for SME Under-insurance in Singapore”, Netscribes, December 12, 2017, https://www.netscribes.com/sme-insurance-
singapore/, accessed Jan 2021.
22
“SMEs and Insurance”, QBE SME Pulse Report, 2020, https://www.qbe.com/sg/-/media/singapore/files/business-
insurance/sme%20pulse%20report-singapore-%20240620.pdf?la=en , accessed January 2021.
23
Ibid.
24
Ibid.
25
Ibid.
26
US$1 = S$1.32 as at 2 June 2021, Morningstar rates, accessed June 2021.
27
Alevin Chan, “Financial News and Advice in Singapore”, SingSaver, October 29, 2020, https://www.singsaver.com.sg/blog/business-
insurance-for-sme, accessed Jan 2021.
28
Mia Wallace, “Hyperion Unveils Year-end Financial Results”, https://www.insurancebusinessmag.com/asia/news/breaking-
news/hyperion-unveils-yearend-financial-results-210794.aspx , accessed May 2021.

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 SMU-21-0031 G&M: Digital Transformation

Source: Global Risk Insights, “Insurance Value Chain”, April 4, 2015, https://globalriskinsights.com/2015/04/big-
data-analytics-will-transform-london-insurance-market/insurance-value-chain/, accessed May 2021.

EXHIBIT 7: CHALLENGES POSED BY ONLINE AGGREGATORS

Insurers can become increasingly dependent on a relatively small number of platforms

that may try to exploit a data-driven competitive advantage
Aggregators can drive price-based competition leading to falling profitability
Online aggregators have low market entry barriers
Online aggregators are an easy gateway for fraudulent insurance activity
Online quote generation makes it easy for customers to understand the impact of different
answers on product pricing, encouraging customers to provide inaccurate information to
bring prices down. This can result in poor underwriting performance.
Consumers are sometimes not confident with aggregators and need to be assured that the
information provided is in their best interests.
Over-simplification and biased information imply that search results, rankings or other
information generated by online platforms may not necessarily reflect individual user
preferences.
Due to the complexity of many insurance products, consumers generally need a
considerable amount of time to compare insurance contracts and fully comprehend the
cover in all circumstances and eventualities.
Information may be over-simplified, focusing on a few product characteristics (e.g.,
price) at the expense of others in order to boost sales.
Information may not be sufficiently personalised and may cater only to the average
consumer.
Oversimplification may promote an over-reliance on price and an under-appreciation of
other product characteristics, which may ultimately result in a reduction in the quality of
the products.
Incentives for quality may also be affected by ’white labelling‘, when insurance is only a
small piece of the overall service package and the insurance provider is not known to the
end customer. Such white labelling reduces the importance of brand, and hence the
importance of reputation for service quality and financial solvency.

Source: “Insight Report: The Rise of Online Aggregators”, PRNewswire, July 16, 2014,
https://www.prnewswire.com/news-releases/insight-report-the-rise-of-online-aggregators-267414441.html,
accessed May 2021.

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