The advent of digital data has changed the world, making it possible for the first time to understand what individual consumers want, and then to meet those needs with simplified offerings. Our March winner for innovation in insurance – Singapore’s NTUC Income, an insurance cooperative – understands this well.

Its innovative solution, SNACK, targets the digital-first generation, such as millennials in Singapore, allowing them to pay small sums for insurance on a daily basis, and with payment triggers set to lifestyle activities like taking the train or buying food. In that way, consumers can pay as little as S$0.30 daily (about US$0.22) to accumulate term life, critical illness or personal accident coverage.

SNACK, which we’ll look at more closely, follows February’s win by Beazley for its reputational risk product and January’s winner, Azur, for its Smart Home product for brokers. All three are in the running for our annual awards, as are hundreds of others in this global contest. Submissions closed on April 9, and the winners will be announced on June 3.

Firms are competing in seven categories as listed on the online submission page with each entry assessed using three criteria: originality; its strategic capacity to generate a long-term competitive edge and return on investment; and its adaptability for use in other markets and countries.

Taking part not only shows the international insurance world how innovative these firms are; it also highlights what’s possible in terms of pushing the boundaries in this industry, garnering recognition from industry peers, and inspiring others in their endeavors.

SNACK-time

One of the things that struck us about SNACK is that this sort of flexible, micro-insurance approach wouldn’t have been possible at scale a decade ago. Yet with customers becoming increasingly “digital-first”, insurers like NTUC Income have had to evolve their propositions to meet changing expectations, says Max Tiong, NTUC Income’s Vice President, Digital Transformation.

“Technology has certainly enabled NTUC Income to be agile in the evolving marketplace for insurance, and will continue to play a critical role in how we reimagine insurance for the benefit of our customers – including the use of AI in dynamic pricing to help us develop and grow new business models such as usage-based insurance and modular subscription-based insurance,” he says.

In providing a solution that allows millennials who are studying or starting their careers to build up insurance coverage for pennies a day, NTUC Income is overcoming hurdles to getting covered: a lack of affordable options that offer flexibility in premium payments and coverage, and the often-tedious conventional insurance application process.

An app-based approach means customers can pay on their mobile – while being able to contribute small sums daily overcomes cash-flow problems and lets them keep a tab on expenses.

SNACK stems from NTUC Income’s raison d’être: it was established in 1970 so that every Singaporean could have accessible essential insurance, and is the country’s leading composite insurer. SNACK, which was launched in June 2020, stems from this remit. It ensures customers can build coverage by paying micro-premiums, accumulating micro-policies that offer a specified sum assured.

The customer decides when and how frequently they want to pay premiums by linking payments to lifestyle triggers on the app, with each micro-policy, which is issued when a micro-premium is paid, covering the insured for 360 days. Those lifestyle triggers include everyday activities like taking public transport, exercising, or even, yes, buying a snack. In this way, they get insured and stay insured using spare change.

Tiong says SNACK was designed to resonate with people who prefer flexible cash-flows to meet financial commitments and who at the same time want to stay protected.

“In this way, we’ve reimagined the conventional channels of obtaining insurance – we’ve made insurance ‘invisible’ and integrated it with our customers’ lifestyles, while at the same time lowering the barrier of entry to insurance and extending access to insurance to more people with diverse financial backgrounds,” he says.

Bite-sized happiness

NTUC Income says 60,000 customers downloaded the app within six months of launch, with more than 21,000 signing up for a user account to build their insurance coverage. To date, it’s issued more than 90,000 policies, with more than $S42 million assured accumulated across term life, critical illness, and personal accident from customers going about their daily activities.

It’s not stopping there. Tiong says the insurer is looking to identify opportunities “to bring SNACK’s architecture and product offerings to consumers in neighboring countries in the Southeast Asian region”.

And in December 2020, NTUC Income rolled out an extension, SNACKUP, that lets consumers build complimentary insurance coverage – paid for by merchants and participating brands – when they spend with their Visa card. This sees consumers stack up complimentary coverage for themselves by doing what they already do, like dining and shopping, and offers brands a new way to engage with and reward customers.

Innovations like SNACK don’t go unnoticed – the Efma-Accenture March award is the fifth that it’s won. Tiong says winning the Efma-Accenture award shows the insurer is “on the right path with regard to innovation and making insurance relevant and accessible to the modern consumer and also to the digital-first generation”.

“Innovation is never an easy journey, and it takes courage, perseverance, and faith when the going gets tough,” he says. “We hope that winning sends a message of encouragement to our vendors and partners who have been on this journey with us, and will also inspire future like-minded partners.”

Our congratulations to NTUC Income for winning March’s contest. Do look out for our blog in June when we’ll announce the winners in the categories of the annual awards, and the overall winner. Good luck to everyone.