Paul Ricard: Hi everyone, and welcome to Oliver Wyman's Reinventing Insurance Podcast. I'm your host, Paul Ricard. Today, I'm excited to welcome Arjan Toor, who is the CEO of Health at Prudential plc. Welcome, Arjan.
Arjan Toor: Thank you so much.
Paul: Arjan, I'm absolutely honored. This is my first podcast and you're my first guest here in Singapore in my new role at Oliver Wyman as the hHead of Insurance and Asset management for Asia Pacific, so thanks for sharing this moment with me.
Arjan: You're very welcome and congratulations.
Paul: Thank you so much. For our audience, we're continuing to engage with leaders and trailblazers in the insurance industry all over the globe. So obviously, you are fitting the bill, Arjan. So, without further ado, why don't you tell us a little bit about yourself and your background to get started?
Arjan: Sure, happy to do that. So, my name is Arjan Toor. I've been in financial services for pretty much my entire professional life, which is now about 28 years. I started off working for ING Group, the Dutch bank and insurance company, and I spent about 15 years with that company before making the decision to move to Cigna Group, the American-headquartered global health services and health insurance company. That's where I spend about 12 and a half years.
Recently, I joined Prudential plc. here in Singapore. I've been with Prudential now for about nine months. So Prudential is my third employer and I'm not much of a job-hopper. When I go somewhere, I tend to stick to that choice, and I try to make it work. But yeah, very excited to be in Singapore now. This is actually my second stint in Asia. I lived and worked in South Korea before when I was with ING. I had the opportunity to spend four years in Hong Kong when I was with Cigna and now back in Asia. I'm very excited to be back in this part of the world because of its energy, its dynamism, the fact that there's a very strong growth orientation and mindset, and I absolutely love that.
Paul: Yes, it's interesting. I'm sure there's a bunch of Gen Z folks who are a few years into their career and have already had more jobs at more employers than you have.
Arjan: I know. I know. Yes, I'm very traditional in that way. Yes, very true.
Paul: Well, it's interesting. So just a few months in Singapore at Prudential plc. here. What's been the most interesting thing so far for you at Prudential?
Arjan: Yeah, so I made a very conscious decision to join Prudential because I was very happy at Cigna and again, had been there for 12 and a half years. My last role was CEO for Cigna in Europe, and I was overlooking a number of different portfolios within the Cigna international business. I was thoroughly enjoying doing that, so I wasn't even considering moving. So, when Prudential came to me, I initially didn't really want to entertain a conversation until they started to explain to me what Prudential was looking to do. Obviously, if you think about Prudential, the company is a very large, very successful insurer across Asia and Africa, with presence in more than 24 different markets, with strong brands and great reputation in the market. In most of the Asian markets, Prudential is a top three insurer, with amazing distribution capabilities, very strong overall footprint, both in agency as well as in bank assurance. Then, about a year and a half ago, Prudential made this decision to refresh the overall strategy for the corporation and an important part of the strategy was and is health insurance. Prudential made a conscious decision to say we want to prioritize health insurance. We want to double down, and we literally want to double the size of the business. That was part of the overall strategic objective because we believe that health is going to be a really important part of our future and we're willing to put the resources and the investments behind that to actually make it a success. So, when I started to think about the opportunity, I got excited because I was thinking about all of these capabilities that Prudential already has and then overlaying that with the desire to actually take the health business much more seriously and really go deep in health. That became a very compelling proposition for me. So that's ultimately what made me decide to join Prudential because I think we have a tremendous opportunity in front of us and I'm really excited to be part of that future.
Paul: Very exciting. Well, in addition to this and your prior stints in Asia as well, you've clearly worked with several players across many markets around the world, so it'll be very interesting to discuss this. I think a few things I'd love to discuss with you today, obviously the health insurance landscape in Asia, how it's evolving, how it compares to what we've seen elsewhere, what you and Prudential are currently setting in motion. You gave us a little bit of a glimpse of it, would love to dive into this. Then obviously looking ahead, some of the trends you're watching out for, I think we'll expand a bit beyond the health insurance industry as well, but very excited to dive into all these things today for you, Arjan.
Arjan: Great, sounds good.
Paul: So, let's dive in. Let's talk about health insurance. If you look at the health landscape in Asia, how would you describe it today? What are the big things that come to mind for you?
Arjan: I’ll start with a customer perspective. When you look at health in Asia, when you ask consumers how they feel about health and how they feel about their ability to actually get access to quality healthcare, they will tell you that the healthcare landscape is incredibly fragmented. It's very confusing and it's a bit scary because a lot of consumers don't really know where to go and who to turn to. In addition to that, they will say that it's expensive to get access to the quality healthcare that they need if something happens to them. It's not an ideal backdrop, I would say, from a consumer perspective, and I think there's a lot of concerns and anxieties that people have.
What we also see, of course, is that health insurance penetration across Asia is still very low and actually out-of-pocket expenses, so people paying money out of their own pocket for healthcare is still very high. Unfortunately, that number is only going up because as you also know, medical inflation across Asia is very high, double digit across all markets. So, where people are already paying a lot of money out of their own pocket to access good healthcare, that's only going to go up going forward.
Then the third thing I would say is there's a tremendous pressure on the healthcare system overall. Public healthcare systems are very overwhelmed. I mean, if you want to access public healthcare, in most markets, it means long wait times, difficult to get access. So, there's a huge amount of pressure on the system. Again, unfortunately, that pressure is only increasing as the demand for healthcare is only increasing as well. That, of course, is driven by a number of different things, including the fact that we see an increase in non-communicable diseases, so lifestyle diseases, as we also call them, across pretty much all of the markets. We're all getting older. As we get older, we also get sicker, especially in the final stages of our lives. So that puts additional pressure on the demand for healthcare. Then unfortunately, the supply of healthcare is not able to keep up with that for, again, a number of different reasons, including the fact that there's a shortage of skilled healthcare workers around the world, and Asia has no exception to that. I think the World Health Organization calculated that by 2030 there will be a shortage of about 10 million healthcare workers around the world. So that gap between demand and supply is only getting wider, and again, that puts even more pressure on the system going forward.
Paul: So obviously, on the one hand, a lot of challenges and from the end customer standpoint, a lot of difficulties today in the health landscape. On the other hand, huge opportunities obviously to build up.
Arjan: Tremendous opportunity because if you think about the low insurance penetration, that means there's a lot of opportunity to offer people affordable health insurance solutions that ultimately allow them to get better access to quality healthcare. Again, that's what everybody wants. So there's the insurance angle to that, but I would take that one step further and say everybody is looking for a trusted health partner because in that environment of high fragmentation, lack of information, lack of clarity and where to go to access care, what's covered, what's not covered, there's a lot of anxiety and stress, and I think we have a tremendous opportunity as a leader in health to remove that stress and be that trusted health partner for our customers, to guide them, to support them, to handhold them, to empower them to actually navigate that very complicated healthcare landscape.
Paul: There's a lot of interesting things you shared here, and to pick up on a few, there are a lot of the trends you are seeing in Asia, people getting older, sicker. What I find fascinating is in Asia there's obviously so many trends in the different countries. Even when we think about demographics, you have a range of countries where the median age is around or getting close to 50 years, if you look at Japan, Hong Kong, and Singapore. China is getting there, rapidly aging. Then you have countries where it's more to 30 years, such as Malaysia, Indonesia, and India. From a health standpoint, it's interesting because some of the challenges you mentioned are probably applicable across, but then there's probably a lot of sub-trends that for someone looking at solving the health conundrum in Asia means solving a lot of different problems that are more localized, so that feels like a big challenge as well.
Arjan: It is.
Paul: Also, do you feel like it is unique to this region, do you feel like this is something that is applicable across the board? Is it just with the growth and the size of Asia where it just gets exacerbated?
Arjan: These are great points, and I think you're absolutely right. I mean, there's a high degree of diversity in terms of the types of challenges and problems that we see in health across Asia, but I would also argue there are a lot of similarities and maybe there are more similarities than differences, and that's where I would always focus our attention.
Again, what I mentioned in terms of the consumer lens, which is, ‘okay, healthcare is fragmented. It's scary. It's confusing. I don't really have access to the right information. I don't really know where to go and how to access the healthcare system.’
That is something that appears to be quite consistent across all of the different Asian markets in which we operate. Again, if you think about the overall value proposition, and I know we'll talk a little bit more about what that looks like specifically for Prudential, that's where I would always start with, ‘Okay, what's the consumer's perspective here and how are we helping consumers to really address some of these challenges that they're experiencing?’
Now, to answer the second part of your question, yes, there are definitely a lot of differences as well. Demographic is a good example. You have rapidly aging societies. You have societies that are incredibly young. It puts different types of pressure on the healthcare system, but at the end of the day, the pressure is something that is universal because we're experiencing this everywhere. Then to answer the third part of your question, then when you go and you look beyond Asia, again, it is a very consistent pattern. Every government in the world is struggling with how do we keep healthcare affordable? How do we keep it accessible for the entire population? How do we make sure that we effectively close that gap between healthcare demand and healthcare supply? How do we make sure that ultimately people get the right care when they need it and where they need it? How do we move to more prevention to make sure that we reduce some of the pressure on the healthcare system because people don't have to access care in the first place because we're helping them to stay healthy and be well? I think these are all big macro challenges that we're seeing around the globe.
There are definitely parts of the world with more consistency. I've had the opportunity to lead Cigna's European business, direct experience in seeing how different the healthcare systems in the different European markets are and even regulation being very different. So, it's always interesting when people talk about one Europe and one European Union (EU). Well, it's not really true. When you think about health insurers as an example, you're faced with regulation that is different in every individual member state. So, I think that's already slightly more fragmented, but I would argue Asia is probably even more fragmented than that. Yes, it does create a number of challenges, but at the same time, coming back to the beginning of my answer, I would always start with what we have in common and there's quite a lot, and therefore a lot of opportunity for Prudential as a regional insurer here in Asia to try and address some of those key challenges.
Paul: Health is complex. Health in Asia is very complex because of all the things we just mentioned. Sitting here in markets, and I'm sure as part of your remit over the years, you've seen the health landscape in Asia evolve. You've seen the ecosystem evolve. You have seen players come and go. It seems like a lot of players came and went, and there's been a lot of people breaking their teeth on this market. Why do you think that is? Why have there been so many tried and failed attempts at solving some of the problems that we're talking about? What's your take?
Arjan: It's a great question, and I think you're absolutely right. A lot of companies have tried and have ultimately failed or decided to take the business in a different direction. I think you kind of answered the question. Health is such a complex ecosystem with consumers and patients, with a fragmented provider landscape, with an important role for regulators and governments in terms of how to organize and orchestrate the overall health ecosystem in each of those markets, because of the level of fragmentation across the different Asian markets. I think it's really difficult to get all of those pieces right. Then of course, what is the role that you want to play as a payer or as an insurer with the ambition that we have, but we're not the only one who's expressed that ambition to not just be a claims payer, but ultimately be a health partner for our customers.
So, if you bring all of that complexity together, it's not easy to get it right. If you want to be successful in this space, you need to understand and appreciate the complexity, and that you're able and willing to stay the course as you build the capabilities that are needed to successfully navigate and solve that complexity. That is not a sprint, that is a marathon. Again, that's why having stamina and having ability to stay the course and the willingness to stay the course is incredibly important because again, you have to get everything right and it takes time to build the right capabilities that will allow you to successfully do that. Not every organization has the patience to do that. What I wanted to reassure myself of as I made a decision to join Prudential is that one, as an organization, we understand how hard it is. Two, we really have the willingness and the appetite to crack it and get it right, and otherwise I would not have joined, but I was very much reassured.
Nine months into this role, I'm even more reassured of the fact that that's exactly what we're doing, and that's why I'm absolutely confident that we will be successful in this.
Paul: It's interesting. A lot of what you referenced goes back to the customer and the customer needs, right. To your point, I think one thing, and it's not just about health, I see this a lot across the insurance industry, across the board, from the customer standpoint, it's ‘I have pretty holistic need of being healthy, staying healthy, doing whatever it takes for me to be healthy, take good care of my family, all of this.’ Whether it's the insurer standpoint, from the entire ecosystem standpoint, it's almost an ecosystem of supplies. I'm selling this product. I'm selling this service, etc.
You were talking about the ecosystem having to come together, and one observation that I'm seeing across markets, I don't think it's specific to Asia, is in addition to health being hard, I think making this kind of shift oftentimes with organizations that have been around for over a hundred years is difficult because it, to your point, requires an incredible amount of conviction, first of all, and commitment, right? It's all the way from the shareholders being on board, the C- suite dedicating sufficient management attention to it, and obviously investments following through and so on. Oftentimes, also having different success metrics. You can't look at a broader ecosystem the same way you look at just selling another insurance product. That's why I really liked what you were saying at the beginning where you were talking about the new business premium and you were talking about the NPS as well, which is ultimately that customer satisfaction, that customer experience is so important. Candidly, I feel like nine times out of 10, what makes these endeavors fail is that steady focus on, ‘we are going to solve the end customer problem, and that's going to require some unnatural acts from us on a consistent ongoing basis.’ I feel like if you overlay on top of this all the complexity of health, that becomes an incredibly challenging thing to solve, basically.
Arjan: Yes, absolutely. You make some important points. Let me try to respond in a couple of different ways. Firstly, customer-centricity. I think it's probably important to share with the audience that when Prudential launched its refreshed strategy, which is now about a year and a half ago, it wasn't only a health strategy, just to be clear on that. Ultimately, I was brought in to lead the health business and that's why we focus on that in this conversation, but it is a much broader strategy which we call ‘Next Prudential.’ There were basically three strategic pillars. So next to health, a very important pillar was what we call tech-enabled distribution. Then the third very important pillar and relevant in the context of the question you just asked is customer-centricity. So, we're doing a lot of work to increase and improve the customer-centricity within the organization, and that touches everything that we do. That's not a health-specific priority, that's a generic priority across the organization. Again, it's all about better understanding who your customers are, better understanding what the unmet customer needs are, and then actually building solutions that address that unmet customer needs, exactly along the lines of what you described.
Again, it's one of the reasons why I was so excited about joining Prudential because I could see how all of these different strategic priorities were sort of hanging together. When I think about the health strategy, I'm not thinking about that in isolation. I'm thinking about that synergistically when I also look at the other strategic priorities of the business. Secondly, we are indeed looking to not just grow the business in terms of the numbers, but actually to deliver a superior customer experience, as I mentioned earlier. We measure that through our health-specific NPS.
I would actually take it one step further. At the end of the day, what we should be aiming for is to improve health outcomes because that's what matters most to our customers. At the end of the day, we want to deliver better health outcomes. Now the reason why we haven't put a specific KPI on that just yet is because it's very difficult to measure, and it has something to do with the fact that a lot of healthcare providers that we work with are not yet in a position where they can transparently report on the actual health outcomes of the services that they deliver. It is definitely something that we are pushing them on, and it's a direction that we'd really like to be able to take, because at the end of the day, that's what should matter most, more than whether or not we're increasing our new business premium. Even the customer experience, because here you can have a great experience dealing with a specific healthcare provider, but if ultimately the health outcome is not what it's supposed to be, then we still haven't achieved our most important objective. So going forward, that's definitely something we will be increasingly focused on and more vocal about.
Paul: Digging a bit more into Prudential and what you're doing in health, you gave us some views. Would you share more about your proposition and how it's evolved and what's your vision over the next few years as well?
Arjan: We talked quite a bit about the customer pain, how that creates a tremendous opportunity for a company like Prudential to step in and really become that trusted health partner for our customers because that's really what people are crying out for. So that's really what the overarching ambition is for the health business within Prudential.
The reason why we're excited about health is because, one, we see a tremendous opportunity here, but also because we believe that this is a solution set that will really allow us to build deeper and more meaningful relationships with our customers. Obviously, we've been very successful in selling life insurance, but as you know, life is typically a product that you sell, and after the sale the engagement with the customer is fairly limited.
Paul: And hopefully you hope you don't have to use it for a while.
Arjan: Exactly, yes. You hope that's for health insurance as well.
Paul: True.
Arjan: But the reality is sooner or later, there comes a point in our lives where we're going to have to use health insurance. We all know that people buy health because they know they will be using it. I think that creates tremendous opportunity for us to deepen the relationships with our customers because it's the higher frequency of engagement with the customer at moments of truth, when people really need you to step up and be there for them, which gives us an opportunity to create what I like to call ‘customer delight.’ By doing that, again, you build a trust. You build a loyalty. By the way, it also gives you an opportunity to better understand what's going on in the lives of your customers because they will connect with you again when there's a medical situation that they are in.
Again, that gives us an opportunity to then also look at what other products and solutions can we offer to customers that are relevant in the context of their lives. The most straightforward example, of course, is giving birth. The moment someone gives birth, we know about it because it's a medical event or it's an event that takes place in a setting of a health provider. We know that a major life event is taking place and that will trigger additional needs, insurance needs, financial protection needs that we can then anticipate and follow up on. So again, that's one of the reasons why we're so excited about health. Not only is it something that people really need, not only does it give us a tremendous opportunity to deliver on our purpose as an organization, which is for every life, for every future, but it's also an opportunity to really create deeper, more meaningful relationships with our customers and on the back of that, offer other relevant services and products to our customers. Now to answer your question more specifically, how do we want to do that? How do we want to become that trusted health partner for our customers? Well, in two ways. The first one is through customer-led innovative propositions. So again, this comes back to my earlier point on customer-centricity or the lack thereof in our industry. If we can better than anyone else, understand who our customers are, what their unmet needs are, and we can deliver solutions that effectively address those needs, I think that gives us a tremendous opportunity to earn that trust and be a relevant partner in the lives of our customers. So that's number one. By the way, when I talk about propositions, I'm not talking about products. I mean, product is an important part of the proposition, but at the end of the day, we're not selling iPhones, right? We're selling something that is effectively a promise and it's an experience. So really as we think about our proposition, we have to think end- to-end about what the customer experience will look like.
Paul: This is interesting. I think starting from the customer need back, as you were saying, is crucial and can be challenging or can be taken as a hammer looking for a nail approach of we have this product, how do we fit it into as many needs as possible?
Arjan: We have a solution. Let's find a problem.
Paul: Exactly. So here, it's interesting because obviously you're looking at this cross-border situation. That clearly has a very clear energy for progress around this. Then obviously, you were describing the solution that is not just the insurance product but includes health services and a digital solutions on top of this. What I find very exciting about these customer-led solutions…and I would love your take on this…almost counterintuitively, you were talking about devil being in the details, I feel oftentimes the deeper and the more specific you go into a certain customer's need, the better the solution is going to be. Because it’s going to solve an acute need for a targeted population, it actually can trickle down and solve a much broader customer need because you've solved the need of that for a population with the highest energy for progress. I’m sure a lot of the digital solutions you build for that population group can probably be applicable in different ways and to other populations within the continent.
Arjan: Absolutely, yes. I completely agree with you. I think at the end of the day, by really understanding what the unmet need is and by building the capabilities that are required to actually effectively address that need, you create the ability that, to your point, to then take those capabilities and stretch them beyond the much broader target audience.
Let me give you a practical example. We've been doing a lot of work in Indonesia around more effectively engaging with our healthcare provider partners. We are building a proprietary network of what we call Prudential priority partners who are trusted healthcare partners. We want to increasingly give our customers direction that if they are seeking seamless quality healthcare, those are the providers that they should be going to. As we do that, of course, we're also understanding that there are quite a few customers or consumers in Indonesia that have a preference to go overseas to access care. They would rather go to Malaysia or to Singapore to access care there.
We quickly identified that actually to do this well, to do this successfully, you can't just build a preferential network in Indonesia, you have to build a preferential network across the region, which is what we were doing anyways, because in Malaysia, we have similar efforts underway. In Singapore, we have similar efforts underway. So now what we're trying to do is connect the dots between the different localized efforts to make sure that we move towards a one Prudential provider network strategy that allows people seamless access to care regardless of where they are in the region. Again, that starts with a specific problem that we were looking to solve in Indonesia, which is now expanded into a Pan-Asian solution that is ultimately going to benefit customers across all of the markets in which we have a presence. I think it's a very nice example of what you just talked about.
Paul: What would you say is the most difficult thing in staying the course in that approach to customer-centricity?
Arjan: Well, I think one of the biggest challenges is to really uncover what the actual unmet customer need is, and I'm going to be very blunt... By the way, full disclosure, I'm a marketeer by training, as you might've picked up already. So that's why I'm so passionate, and some people would say obsessed by customer and customer needs. That's why it keeps coming up in this conversation, but I generally believe that that's where every conversation should start.
It's actually very difficult to uncover what the real customer needs are, and you need to be very smart about how you do that. One of the things that I really struggle with in insurance is, and we're not the only industries, everybody talks about focus groups. You'll have a product that you want to test, so you do a customer focus group. It's proven that customer focus groups don't work. They don't work.
When you put people in a very artificial setting and you let them respond to an artificial problem and you hope that you're going to get a genuine, authentic answer, it just doesn't work. What you see in other industries is that companies have really moved on from customer focus groups and they're doing what we call ethnographic research. They observe consumers in their own natural habitat, as we would like to call it, to actually understand how people are thinking, working and doing things.
Now, that's not so easy when it comes to non-tangible products like insurance. So again, I think we need to redefine what it actually is we are looking to solve. Again, we are not selling a product, we are actually creating a proposition. If the hypothesis is people are struggling to get access to the right care when they really need it, you're going to have to observe consumers in a situation where they feel they need access to care, and you really need to see what they do, how they behave, what resources they use, what they struggle with, how it makes them feel to truly understand.
This is the pain point that we have an opportunity to solve. I would argue an obligation to solve. I think that's probably one of the hardest things. This is not about, okay, let's build a prototype for an iPhone, give it to customers and let them play around with it and see how they use it and what we need to improve on it. I mean, this is much harder because it's an intangible solution that we offer, but at the same time... And again, it's difficult to observe customers as they go through that pain, but I think it's absolutely essential to really uncover what the problem is that you're looking to solve. There are tons of products that have been developed in the insurance industry that have not worked because customers in focus groups will have told the insurer, ‘Oh, yeah, this is a great idea,’ but then push comes to shove and the product is just not meeting the customer need.
Paul: I couldn't agree more. What I find interesting when you think about this ethnographic research, if you go into really deep one-on-one customer interviews to really understand their needs, working across the insurance industry, the challenge is this urge to ask within the first five questions, ‘Here's my product, would you use it?’ versus ‘Let me actually understand your broader needs and understand how it works,’ and then offer that solution and earn the right to offer all the right solutions in the right place.
Arjan: Yes, exactly. Well, and the other thing I would say is I think there's an exciting opportunity that not a lot of insurance companies have embraced, which is to co-create with customers.
This is not about, ‘Okay, tell us what your problem is and then we'll fix it for you, and then hopefully you're going to tell us that it's actually meeting your needs.’ No, there's an opportunity to co-create solutions with customers. If you're willing to be vulnerable, you're willing to be transparent and you're willing to share some of the key challenges. Again, I know this is not always easy because insurers are struggling with a lot of practical reasons why the solutions are not exactly what a customer would like to see. Insurers have a lot of legacy in terms of their systems and their processes. You need to be transparent in terms of ‘these are the limitations.’ It's also a product. At the end of the day, our solution needs to be viable, also financially viable for the company that's delivering it. You need to be clear on what the boundaries are within which you are able to operate. But I think if you're willing to do that, I think there's a tremendous opportunity to co-create solutions with customers.
Paul: Right, I have many other questions, but I want to go back. We had customer-centricity as one of the tenets, and then I think you had another point you wanted to take us down.
Arjan: Yes, you're absolutely right. There are two pillars in our strategy. The first one is these customer-led proposition innovation. The second part is what we call connected care. This is really about our ability to guide and support and handhold our customers as they go through the process of identifying the right care for them. The way I would like to summarize it is how do we get customers to access the right care at the right place at the right time, but also at the right cost?
Again, we talked quite a bit about this already, and of course, the two are interlinked because the proposition ultimately determines what that connected care experience should look like. But for us, it is about how do we broaden our involvement and engagement with customers beyond just paying the claims, and how do we make sure that we close some of, let's say, the information asymmetry that exists today in the healthcare ecosystem? Whereas a customer or a patient, you feel rather helpless and not very empowered because you don't know what to do, you don't know where to go.
Ultimately, if you end up speaking to a medical professional, it's very difficult to actually assess whether or not that professional is giving you a medical advice, diagnosis, treatment plan that meets your specific needs and is up to the right level of quality. I think there's a tremendous opportunity, again, for us to play a more prominent role throughout that entire healthcare experience. Now, what we're aiming to do is create a very connected experience. There's a lot of what we call point solutions available. All of customers today, if they want, they can get access to a teleconsultation. They can get access to a medical second opinion.
They can get access to a chronic condition management program. The problem is that all of these experiences are not connected. They are difficult to access. They're not very personalized, and they're often not digitally enabled. So what we want to do is make sure that we create those seamless experiences for our customers where they're able to access all of these different forms and shapes of healthcare that are relevant for them at that point in their lives, but we do it in such a way that it's really easy, it's really convenient, and that's what we mean when we talk about connected care.
Paul: So, in that connected care, there seems to be an element of obviously Prudential owning some of the pieces, but the way you describe it, I'm hearing also assembling from a broader ecosystem, right?
Arjan: Absolutely. Yeah.
Paul: I can see the challenge of co-opting the broader ecosystem into this. So how's that working out? What are some of the hurdles that you're looking to clear? You were talking about information asymmetry. I'm sure this is also a huge challenge and I'm not talking about just Prudential, but in the health industry, obviously there's going to be fraud component, there's going to be overcharging at times and all these things. So I'm sure you're dealing with this as well. So how are you overcoming this?
Arjan: To start with the first part of your question, you're absolutely right, this is about creating very strong partnerships as we build these connected experiences for our customers. We definitely don't have the aspiration to do everything ourselves, to deliver everything ourselves. We don't think that we should. There are other companies that are very good at offering elements of that connected care experience. It’s very much about how do we bring them into the ecosystem, but then again, do that in such a way that it becomes integrated rather than individual point solutions. We don't believe that we should be owning healthcare provision. We've intentionally said we want this to be an asset light approach to connected care.
We don't have a plan to acquire hospitals or clinics like physical healthcare, but we do believe in the power of these partnerships. Again, think about these partnerships in two different ways, traditional healthcare providers, hospital, clinics that we already work with today that are going to become a very important part of this connected care strategy, but then also new partners, especially in the digital or the virtual care space that are now emerging and that we think have an important role to play in building those connected care experiences today.
You're absolutely right. It's not easy to stitch all of that together. At the same time, we believe it's the right thing to do because again, if you want to make this whole experience more customer- centric or more patient-centric, we have to build an ecosystem around the customer, and that means we're going to have to do some of the heavy lifting. If we aspire to be that trusted partner for our customers, which we are, we're going to have to do some of the heavy lifting in the backend, making sure that that works seamlessly.
Now, what I've seen in my eight and a half months with Prudential so far, quite a lot of the healthcare providers that we already work with are very keen and are very interested to take this partnership to the next level and become part of that connected care experience, and the reason for that is very simple. At the end of the day, providers have a very similar objective to us as payers, which is we want to deliver better health outcomes. Why do people go into medicine? Why do people go into health? Because they want to make people better. I mean, that is ultimately what motivates all of us.
If healthcare providers see an opportunity to more effectively partner with payers like Prudential and build that ecosystem that is ultimately designed to improve the health outcomes, by definition, it's going to satisfy their overall objectives.
Paul: We were talking about the connected care and this ecosystem with the providers and the broader solution providers. I'm curious, we talked at the very beginning of this podcast about agents and bank assurance being the way you ultimately connect and distribute your solutions. Can you share a bit the role that agents, intermediaries, whether it's bank assurance or others, are playing in that vision? I imagine that the role is not just about that initial touch point with the customer and goes beyond.
Arjan: Let's start with agents. I think the role of agents in the relationship that we as Prudential have with their customers cannot be overstated, right? I mean, it's an incredibly important role. A lot of customers ultimately choose an agent because they trust the agent, and that's a really important thing to acknowledge as we think about the health strategy going forward, because who do customers turn to when they are in greatest time of need? They will turn to their agent, and that's happening today. I mean, when customers are not feeling well and they have health insurance with Prudential, more often than not, they will ask their agent, ‘Where should I go? What care should I access? What is covered and what is not covered?’ So a lot of these concerns that people have, they try to address by actually speaking to their agent. There's really no point in trying to organize this health strategy around the agent. We actually need to leverage that very important relationship that the customer has with the agent by giving our agents the tools to be able to play an even more important role in the lives of our customers. In other words, if a customer asks an agent, ‘Okay, I'm not feeling well,’ or ‘I've been diagnosed with a certain condition, where should I go?’
We should be giving the information that they need to be able to pass on to the customer, which again is based on what we know about our healthcare providers in terms of the clinical outcomes, in terms of their specialties, in terms of the rates that we've been able to agree with them, in terms of the enhanced customer experience that we've been able to agree with them as part of this connected care strategy. So all of those things come together in a recommendation which the agent can then pass on to the customer.
It is very much about enabling the agents to do what they already do really well today, which is to invest in that trusted relationship that they have with their customers. The same is true for banks. I mean, ultimately, if people go to a bank and they're looking for an insurance solution through a bank, they place their trust in the bank, and then the bank's ability to not just sell the product, but also make sure that customers get the right support and service on an ongoing basis. Again, it's about enabling the banks to play the role that they play in the lives of our customers rather than try to organize things around them because it's not going to work and it's also not a very smart thing to do.
Paul: Right. There's two words I really picked up in what you said. One is trust and one is enabling. What I find interesting, putting myself in the shoes of an agent, that must be also quite a shift, right? There's probably a similar ambition of how do I go from just being here sporadically for my customer if I'm basically a life insurance agent to engaging on a more consistent basis and building upon that trusted relationship?
Arjan: It's important that we strike the right balance there because if for every service interaction the customer has to contact the agent, it's probably not very efficient. It's maybe not the best use of the agent's time, but I would argue it's also not necessarily what the customer wants. So while we empower the agents to play the important role that they need to play in the lives of their customers and our customers, at the same time, we're also working incredibly hard to enhance our digital self- service capabilities. So that for the more transactional, I would argue, more administrative side of things, customers can go to what we call PRU services, which is our online portal. They can go online. It's easy. It's intuitive. They can make the updates, make the changes, get the information that they're looking for. So, I would really like to make sure that although the agent plays an important role in servicing, it's actually the high value low volume interactions rather than the high volume low value interactions because again, I don't think that's what the customers are looking for, and that's not necessarily the agent's best use of their time.
Paul: Let's talk about agents and distribution because more broadly, and not just talking about Prudential, I think in Asia, for sure, agents, bank representatives have played a very important role. Arguably, you and I know this, across many markets around the world, agents and intermediaries are still very important. 10 years ago everybody was talking about digitization, complete disintermediation and all that, and it hasn't happened, right?
Arjan: No, it hasn't happened.
Paul: We'll talk about generative AI, of course, because we have to. But with a range of trends happening, that's why I was picking up on the word enable, I feel like there is clearly a role for agents and intermediaries, and it's about enabling them, to your point, to be there for the right moments and everything else, all the administrivia, as I like to call it, goes away. But also, how do you evolve that role that goes beyond? How as an agent do I go beyond just selling product X, Y, and Z, but really being there for my customers in a 360 fashion? If you fast forward five plus years, what is the role of an agent working with Prudential or other insurers in Asia today?
Arjan: Yes, it's a fantastic question. Listen, first and foremost, we fundamentally believe that the agent will continue to play a very important role, and to your point, not just in distribution, not just in sales, but in the overall experience that we're delivering to our customers. That's why you heard me talk when I spoke about the next Prudential strategy, about three strategic pillars, customer, health and tech-enabled distribution. It's not a coincidence that we're talking about tech-enabled distribution because to your point, it's very much about the empowerment of the agents to make sure that they can continue to evolve their role as they have done over the last years.
Because you're absolutely right, many people have said at some point, agencies are no longer going to be that relevant. Well, they've all been proven wrong. Why is that? Because agents have managed to evolve as the consumer needs have evolved, because if they would be irrelevant, they would no longer be here. So they've done that in a very successful and a very powerful way.
But at the same time, back to earlier conversations, the consumer needs and expectations will continue to evolve. I think more and more consumers, as I mentioned, are looking for self-serve solutions, especially when it comes to more transactional activities. That should be our ambition to make sure that we make that as easy for our customers as possible. But at the same time, as you said, agents will continue to play a really important role in delivering that 360 support for our customers. Why? Because they are closer to our customers than we will probably ever be able to be.
Now, really important in that, of course, is giving them access to the right tools and digital platforms so that they can also maintain that 360-view of the customer based on all of the interactions that a customer has with Prudential and with the agent. I mean, I know the word omnichannel is used quite a lot, but it is generally an omnichannel experience that we need to be able to create for our customers. Again, the agent plays a really important role in that omnichannel experience, and they need to be able to see and understand how customers are interacting with us more holistically.
I think another really important point is data and analytics. How do we help to keep the data that we have of our customers up to date? How do we make that data available to our agents, but also how do we make it easy for agents to share data with us? Obviously, all under the assumption that customers give approval to actually do that, right? There has to be consent, but I think it's that data sharing, which is a critical enabler for the success of deepening the relationship with our customers going forward. That will then give us the ability to analyze the data, to identify patterns, and then to give the agents suggestions and nudges for what's likely happening in the lives of our customers so that they can follow up with offerings that are relevant for that customer at that point in time.
Paul: Yeah, it's interesting. I'll tell you a little story that has nothing to do with insurance. I recently was in the US. I was doing a little bit of mystery shopping for a car. Actually, I did research on a website on that car’s website that I was looking at, and I then went into a dealership for that car. I had signed up on the website. The person I talked to, once they knew who I was, knew all the things that I had looked at, even knew a few things that I was playing around when I was comparing different models and picked up the conversation there, right? You were talking about omnichannel. You're talking about technology-enabled, right? I think we're at the stage where these things can happen. They can happen quite magically, and when they do happen magically, it's quite a delight for the customer. I think when you think about things like health, insurance, broader financial wellness and peace of mind, this is actually something that's very attractive for the customer versus being on constant being held on hold when calling customer service, having to repeat the same thing 10 times, not knowing who your main customer point of contact is. There's a lot of other industries that are also doing this well that I think are interesting source of inspiration. So that leads me to my question for you, which is what are some sources of inspiration for you? If you look at other industries, other companies outside of health, outside of insurance, what would you say, ‘Oh, these folks have already nailed how they address this problem,’ or ‘this is a very exciting way of engaging with the customer, and I would love for us to do more of that going forward.’
Arjan: Yes, we absolutely have to look outside of our industry for examples and for two reasons, one, because there are a lot of industries that are doing things better in my view than what we're currently doing in insurance. But also very importantly, again, this is about the customer's perspective, right. I've always found it quite strange that when insurers look at services or products or propositions, they have a tendency to benchmark themselves against other insurers. In my perspective, that is an irrelevant benchmark because our customers are not benchmarking the service experience to another insurer, they're benchmarking their service experience to other service providers, agnostic of industry that they're interacting with on a daily basis and that should be the benchmark for us. So when we think about how do we build these connected care experiences, the benchmark is other industries, it's not insurance, that have done a very good job in building digitally-enabled, seamless, highly personalized service experiences. That is what we should aspire to do and deliver.
Then to make that more tangible, I mean, the usual suspects come to mind, right? I mean, I came here an hour ago by Grab. We all know how easy and how intuitive that is, right? You use your mobile phone. The app is able to see where you are, where you need to be picked up. You can indicate where you want to go. I mean, it's an incredibly seamless experience. You no longer have to pay. It's all automatically deducted from your account or your credit card. I mean, that is a great example of a seamless, intuitive, digitally-enabled experience. I'm intentionally saying digitally enabled because it's not a digital experience because you're actually in a physical car, right?
Paul: That's right.
Arjan: But it's a digitally-enabled experience. I think those are the type of experiences that our customers are having every day. That has become the benchmark, and that's what we should aspire to deliver from a health perspective as well.
Paul: To your point, what I like in that example, whether we're taking a Grab or Uber in other markets, there's also that element of you have that one delightful experience and you are earning the right to offer more experiences to the customer in the process, which I think is very exciting.
Actually, I took my first Uber ride, when it first started in San Francisco, and I still remember my very first experience in an Uber ride. I was with a colleague in Japan. I think Uber is starting in Japan, and I actually got to experience one of my colleagues experiencing his very first Uber ride and not having to take out his wallet or his credit card and that was an absolutely delightful experience. So I love the example that you brought here.
Arjan: Yes, let's be honest, it's also a beautiful example of customer pain being translated into an incredible experience on something that people would argue is very low interest. I mean, getting a taxi, nobody would ever have said before Uber and Grab, ‘Oh no, that is really something that creates an opportunity to delight customers.’
Paul: That's true.
Arjan: But at the same time, there was so much customer pain in that experience that Uber and Grab have been able to solve. So it just goes to show that, yeah, customer delight can happen in any type of situation.
Paul: So, shifting gears, literally, figuratively, I do now want to talk about generative AI.
Arjan: Of course.
Paul: We did a survey with our subsidiary sellers, and particularly on generative AI. I mean, we know AI has been around for a while and AI has been in the insurance industry for quite a while. But obviously with generative AI, there's been an increase in interest and excitement and hype at times.
What I found really interesting in the survey we did is that Asia Pacific was leading the charge in terms of generative AI adoption for insurance. In insurance and right now in Asia Pacific, 54% of insurers have some form of gen AI solution in production versus 42% in Europe and 28% in North America, which I thought was very interesting. I mean, we were talking at the beginning of this call about the growth focus on Asia, and I thought that was very much embedded in this stat. So I was really excited to see this.
Obviously, there's a ton of things yet to be done. The other thing I wanted to share with you, and then I would love to get a bit your take on AI, of course, is if you look at the places where the investment dollars have been across the industry in Asia, there's three buckets. The first one I would say is the one that's consistent across industries. It's co- development and customer service. These two, I would say you can take pretty much any industry, you'd probably get the same first bucket. Then the second and third ones are much more insurance-centric. The second one was all around distribution and agent service. We were talking about agent enablement, that's certainly a big piece. Then the third one is claims and underwriting.
If you looked at the same thing in the US for example, claims will be a lot higher, interestingly, also because there seems to be a stronger focus around efficiency solutions, while I think here the focus is a bit different. But yes, co-development, customer service, marketing agent service, and claims and underwriting are some of the big areas that people seem to be investing in here in this region.
With that big preamble, we'd love to get your take generative AI, high fidelity. Where does one end? Where does the other one start? Where do you see the biggest opportunities from your standpoint in the health space and the insurance industry?
Arjan: Sure, so first and foremost, I don't think generative AI is hype. I think it is a transformational change that is happening with us, to us that is going to impact pretty much everything that we do and how we interact in our daily lives. So I don't think this is a hype. Of course, there are people that are trying to hype it up because they see a commercial opportunity on the back of that, but I strongly encourage everyone to take generative AI very seriously because it's not going to go away. It's here to stay. Now, having said that, of course, we have to be really smart about how we apply generative AI to the way in which we run our business. Prudential has made it very clear that for us, this is an essential part of our overall innovation agenda. That's why quite recently we announced our strategic partnership with Google.
Paul: Congratulations.
Arjan: Thank you. We're very excited about that, and the creation of what we call our AI Lab, which is very much designed to accelerate the identification of use cases for generative AI, and then to fast track the implementation of these use cases in proof of concepts, and then ultimately if the proof of concept is successful, to put that into production because we know and understand that we have to move quickly if nothing else, because generative AI is continuously evolving and the only way you can do this successfully is by getting in there, by trying things, by learning, and then by adjusting as the technology gets better and smarter.
Paul: I call this testing your way to right.
Arjan: Testing your way to right, I love that. Yes, as I like to say, you need to be comfortable with the uncomfortable situation of not having all the answers because nobody has all the answers when it comes to generative AI. But again, this is not a hype. This is here to stay and you got to be all in. Now when it comes to health, we're very bullish on generative AI. We think there's tremendous opportunity. Very recently, what we announced is that together with Google, we are actually one of the first insurers in the world that's going to be using MedLM to enhance a number of our processes.
Paul: Can you explain for our audience?
Arjan: MedLM is the clinical generative AI application that Google has developed. It's AI that has been trained on clinical data. Actually, MedLM has successfully passed medical exams in the US with a very impressive pass rate, I have to say. It is used in the health industry. It's used by doctors, by trained medical professionals to support their clinical decision making. So it's an incredibly powerful tool, but again, it's not generic. It's very specifically tailored to the needs of the health industry.
We have recently announced that we're going to be using MedLM in two markets, in Singapore and in Malaysia to enhance our claims adjudication process. The way in which we're going to be doing this, we're going to be using MedLM to actually help to support, and again, this comes back to empowerment, to empower the people that are assessing medical claims to be able to do that faster, but also to do that more accurately. As an example, what MedLM will do is it will read medical reports that are often needed for us to be able to understand whether or not a claim is aligned to the medical diagnosis and the treatment plan, but also whether or not the medical procedure that is taking place or has taken place is necessary and reasonable in the context of the diagnosis that has been issued by the doctor. We use MedLM to read those clinical reports, to summarize them, and ultimately to then provide recommendations to the claims assessor.
Again, what that means is that we can process claims faster, which ultimately means that money will be in the bank account of the customer faster, which we know is very important to customers, understandably so, but we firmly believe that it will improve the accuracy of the decisions that we make. We are really excited about this. Again, we are one of the first insurers globally to be working with Google and to be leveraging MedLM for our health insurance business. It's just one example of how we're looking to apply AI to enhance our business for the benefit of our customers.
Paul: I think this is a tremendous example because if I look at claims management in the industry, if I look at underwriting, these are parts of the value chain where, I oftentimes say this on this show, there's always been a part that is art and a part that is science.
The art part is not really art. It's derived from the accumulated experience from these individuals, which is obviously hard to replicate with an algorithmic model. As a result, whenever generative AI or rules-based algorithms claim to replace these individuals, that always fell flat. Whether it deserved to or not, there was always a subset of cases where the algorithm or the AI would just not be right.
The pivot that I'm seeing now, which you've illustrated well, is that to shift to the augment or the enable and now saying, look, we can use an incredible amount of data that a human could never ingest in their entire lifetime by themselves. We're using all that data and we're providing the right experts with additional insights.
Arjan: 100%
Paul: So that they can use their judgment on top of this and augment their own judgment, I think is absolutely the way to go. I can see this being incredibly powerful in claims. Frankly, I think even for agents and other parts of the value chain, I think there's equally huge amounts of opportunity.
Arjan: I couldn't agree more, and it's one of the design principles that we have clearly articulated within the organization when we talk about generative AI, which is there's always a human in the loop. We need to acknowledge that generative AI is incredibly powerful, but it's not perfect. At the end of the day, I think to your point, it's the combination of generative AI and the human that allows us to drive better outcomes, more efficiency, but also more accuracy. If we can achieve that, then I think everybody wins. So you're absolutely right, and that's really the way we go about this in Prudential as well.
Paul: You mentioned Google. I was going to ask you a question that I was going to frame as what if Google does it? But you're part of it with Google, so that's fine. But my question is more broadly, what are you watching out for in terms of disruptors, disruptive forces, threats, if I can call them as such, and again, with a healthy dose of realism around them? What are the things that you're watching out for that could potentially disrupt the industry?
Arjan: There are organizations that are looking at healthcare and are looking at health and that are seeing the customer pain point, that are seeing the friction points, that are seeing the needs for better support for customers, and I think that in itself is something that should keep all of us awake at night.
If you're not able to move faster in terms of identifying what that customer pain point is, in identifying the solutions and in implementing those solutions successfully that will do a better job in delivering the best possible service and support to customers, then we have reason to be worried, because if we don't do it, others will jump into that gap.
Whether they are tech companies it doesn't really matter. So for me, this is more an illustration of the importance of customer centricity, but also the importance of moving quickly, and hence the conversation on generative AI being a really important one, because I firmly believe that AI gives us an opportunity not to completely change the direction of our health strategy, but to actually accelerate the successful execution of the strategy. There's a real urgency. I definitely feel that urgency to address these customer pain points in an effective way. If we do that well, then I don't think we have anything to be worried about.
Paul: You talked about the war for talent. What would you say to an audience member who's fresh out of school, looking into different careers, looking into different employers?
Arjan: Well, I love that question. What I would say is it's difficult to think of a lot of other examples of industries that are more relevant and more top of mind than health today. Obviously, we've gone through some pretty difficult years during the COVID pandemic, but I think COVID has served as a very powerful reminder for all of us that health is the most important thing you have.
If you don't have your health, nothing else really matters. I think we see individuals, organizations, employers, governments, societies at large really wrestle with this idea of, ‘okay, how do we really make sure that we address health in a much more holistic and a much more strategic way?’ This is an industry that is rapidly evolving. It's rapidly moving. It has a lot of big challenges. We talked about the sustainability of healthcare, the increasing gap between healthcare demand and supply, the role that technology and generative AI can play to close some of that gap.
I mean, again, I can't think of another industry that is moving so quickly and has such an important relevance in society at large as the health industry. So with that in mind, I think it's a fantastic place to be at. If you like change, if you like innovation, if you like a good challenge, then yeah, I would highly recommend people to look at the health industry and specifically the role that health insurers can play, because at the end of the day, we sit right in the middle of all of that. We have an incredibly exciting opportunity to be an orchestrator in putting the different pieces together and to really play a more meaningful role in the lives of our customers by offering them those seamless, connected and highly personalized healthcare experiences.
Paul: Sounded pretty good.
Arjan: Great.
Paul: We are coming up on time. As you know, I always love to ask for a few final words of wisdom that you like to share with our audience. So Arjan, what are your words of wisdom?
Arjan: Words of wisdom, Paul that's a lot of pressure. Now, listen, I'm probably going to go back to something that I already mentioned. As an industry, if we really want to be successful in customer- led innovation, we have to stop to benchmarking ourselves against our direct competitors, and we really have to look at best-in-class service providers. That is who our customers are interacting with on a daily basis. That is what their expectation is when they interact with us. Why would anyone lower their expectations the moment they deal with their insurance company? It just doesn't make any sense. That would be my words of wisdom, if you will, is to make sure that you think from a customer's perspective about what good looks like, and then consistently exceed your customer's expectations.
Paul: Arjan, couldn't agree more. Arjan, thank you so much for your time, and thank you for being my very first guest in Singapore.
Arjan: It was a real pleasure. Thank you Paul for the conversation.
Paul: Terrific. That was Arjan Toor, CEO of Health at Prudential. I'm Paul Ricard. For more information about our Reinventing Insurance series, you can find everything on our website at www.oliverwyman.com/reinventinginsurance. Thanks for listening, and I'll see you next time.
This transcript has been edited for clarity.
