For those who are frequent flyers of AirAsia would be familiar with the Tune Protect Travel. However, not many are aware of its comprehensive travel protection which includes over 22 benefits where passengers are protected ‘before, during and after’ their trip. In short, travel insurance is so much more than just damaged luggage. Unfortunately, many see it as an unnecessary added expense that could be spent on their getaway. And this is where Razman Hadfidz Abu Zarim comes in to educate the masses why it is important to make that small investment.
A Fellow Chartered Accountant of the Institute of Chartered Accountants in England and Wales, Razman has 40 years of experience in leading businesses in the areas of Financial Services and Corporate Exercises both in Malaysia and the United Kingdom. As the current Group Chief Executive Officer of Tune Protect Group Berhad, Razman sees innovation as a key enabler and believes that technology will lead the way to make insurance better.
1. Tell us about Tune Protect Group as a whole.
Tune Protect Group is a financial holdings company, listed on the Main Market of Bursa Malaysia, with reinsurance and general insurance operations via the Group’s subsidiaries and associate/JV companies in more than 45 countries and territories around the world.
We lead in product innovation and differentiation through customisation of our products and services using dynamic pricing tools, combining telematics, algorithms and hard data to introduce on-demand, usage-based and behavioural-based products, and expanded our product range to include Shariah-compliant products to cater to a wider customer segment. In addition, we also bundle and package our products that are lifestyle-oriented for customers on-the-go.
For example, embedding insurance with flight seats to reach a more diverse segment of travellers. In widening our distribution channels and expanding reach, we continually enhance our Direct-to-Consumer platform (www.tuneprotect.com), develop mobile applications to connect to a wider digital community and collaborate with more partners in the digital and e-commerce space.
2. Apart from AirAsia, where does Tune Protect distributes travel insurance?
We have established airline partnerships with Air Arabia, Cebu Pacific Air, Cambodia Angkor Air and most recently just this year, Wataniya Airways, a Kuwait-based airline.
3. What other milestones have the group achieved thus far?
We recorded a strong first quarter 2018 results. Profit after tax was RM18.2 million which grew 36% year-on-year bolstered by our digital global travel business which recorded the highest quarterly gross written premiums of RM29.1 million over the last 6 quarters. The year-on-year growth of our digital customers was 74% outpacing the non-digital customer at 34%. Likewise, digital policies issued grew a remarkable 91% year-on-year versus non-digital policies which grew 34%.
Our direction has always been focused on digital growth. In widening our distribution channels and expanding reach, we bank on digital collaboration including that with insurtechs, i.e. our recent investment in Laka Ltd, a peer-to-peer insurtech company. Aside from this, we have planned for a slew of initiatives that are focused on accelerating our digital growth through technology. We will continue to invest in technology and tools to better our digital offerings – enhancing the use of analytics, building and connecting APIs, refining technology across the Group, introduce more digital products and solutions, automate service and processes while improving the whole customer journey.
4. What are some of the misconceptions people have about the group that you would like to clarify?
For one, we are not your typical traditional insurance company. The Group is known and positioned as a digital insurer. With 17% of our top line business (Gross Written Premiums) contributed by the Digital channel (or 88.5% policies issued are from Digital channel) for 1Q2018, especially that of the Digital Global Travel business, we are now moving into the space of insurtech with the investment on Laka Ltd. We also have a unique business model whereby it allows us to work with various local underwriting partners in more than 45 countries around the world to distribute Travel and other lifestyle products that we offer.
Secondly, while we are proud to be associated with the giant airline AirAsia, we would like to emphasise that we are Tune Protect. Notwithstanding the fact that AirAsia is a major shareholder owning 13.65% of the Group, and Tune Group owning 15.77% (of which we are very pleased with their support), our offerings and partnerships encompass multiple corporate partners, airlines, agency force etc, and thus, our business is not confined to just Travel Insurance or AirAsia.
5. How would you explain insurtech to those who are unfamiliar with the term? Is it going to make a huge difference in the way people can apply and claim for protection?
Insurtech simply refers to the use of technology and innovation to better offer one customised or innovative insurance-related solutions be it from a product, customer experience and reach perspective. And yes, because a key element in insurtech is the use of technology to make things more efficient, consumers can look forward to the ease of purchasing/buying, understanding and claiming. In short – Protection made easy.
6. What sets Laka apart from the other insurance models offered in the market?
It is a community insurance model and the fact that one only pays for the true cost of cover. Through a traditional insurance model, an insurer collects premium upfront before protecting/insuring a person. The Laka business model, on the other hand, provides protection first and only collects the fees upon a claim taking place. Laka is an insurtech company, not an insurer; i.e. it is not an underwriter. We were introduced to the Laka team sometime at the end of 2017. However, serious discussions only commenced this year and very quickly led to the collaboration. We concluded the 9.99% investment in Laka recently in June 2018.
7. How does acquiring the London-based insurtech startup affect the industry and its consumers in the long run?
Laka model is believed to be able to shift the insurance landscape of Asia because it offers the first of its kind community or crowd insurance model which rivals traditional premiums model. It is more beneficial and appealing to consumers whereby one gets protection first without paying anything (except for a small sum of membership fee) and only pays for the true cost of cover whereby claims are split fairly between customers and premium capped at “market rate”. Consumers can expect huge savings compared to prices in the market. As it is better aligned with customers – fewer claims lead to lower premium costs for customers (cost effective), making it a fairer insurance product for all.
8. Are there any ongoing projects the Group is looking into?
The Group has been active in exploring into potential ventures, as well as in enhancing the existing ventures, for example with Laka, we hope to bring the business model to Asia in the near future to solidify our digital presence in the market. Whilst our existing dynamic pricing initiative has gained traction since its launch in 2Q2017, we are now moving forward with Dynamic Pricing 2.0 for AirAsia Travel Insurance where products offered are more customised to the varied travellers’ segments. The content messaging and layout are more personalised with greater algorithms and analytics which we hope would lead to an increment in take-up rates and revenue.
9. What about upcoming projects?
The Group is rolling out an enhanced customer experience model aptly named “Tune Protect’s 360 Wow Experience”. Aiming to provide near-instant answers to any queries, the new customer service model incorporates the use of live, instant and direct digital channels with the aid of chatbots, live chat and social spaces. In addition, other features to further empower their customer base will include a self-serve knowledge-based and pro-active recommendations for FAQs. We are also working on rolling out a mobile application for simple protection products and enhancement to our B2B and B2C channels for ease of getting protection for customers and businesses.
Additionally, with the recent launch (on May 2018) of our first Takaful Travel products in Bahrain via B2B channels, utilising our Retakaful window that was approved last year, the Group is looking forward to expanding the products in other Middle East countries and Indonesia within the year, leading to an anticipated growth of the travel insurance business for The Group.
Locally in Malaysia, we look forward to more corporate tie-ups focusing on retail lines of business as to how we have established with FOMEMA in April this year, where we are one of FOMEMA’s online insurance providers for foreign workers in Malaysia through FOMEMA’s online portal.