Innovation for Underinsurance in Asia-Pacific
Seven teams of university students across Asia Pacific presented a new insurance product for a disadvantaged community for the 2024 Actuaries Institute Innovation Challenge.
Hosted for the first time in 2022, this year’s Innovation Challenge was sponsored by Milliman and organised by the Young Actuaries Advisory Board (YAAB).
People, families and businesses in vulnerable communities have inadequate access to insurance because the coverage, flexibility, cost and distribution of existing insurance offerings do not meet their needs. These communities often rely on the safety net provided by local government; however, support can be limited or unavailable.
University teams from across the Asia-Pacific were asked to present a creative and effective insurance solution to this problem:
You are a young actuary at a multinational insurance company that is considering offering an innovative insurance solution to a disadvantaged community in Asia-Pacific as part of its product strategy.
Your manager has asked your team to prepare a pitch for the company’s Board.
You are tasked with designing an innovative product that will help this community and also ensure the product is sustainable and financially viable.
The finals on August 28th were facilitated by YAAB members Ryan Starkey (Quantium) and Sophia Songberg (Scyne Advisory) and a judging panel consisting of Erica Chan (Milliman), Victor Huang (Milliman) and James Aclis (KPMG) scored the solutions.
‘MinionMan’ from Singapore’s Nanyang Business School (NBS) were the winners of the Innovation Challenge for this year and received a cash prize from Milliman. Team members Toh Xian Hi, Jie Ming Tan, Ng Yong An and Lim Yu Shan presented AgriShield, a product for small scale, rural farmers in India to provide financial protection, allow for agricultural sustainability and build community resilience.
According to MinionMan’s research, only 9% of Asia-Pacific’s total agricultural losses are covered by insurance and 70% of rural income comes from agriculture in India.
Thus, making these farmers vulnerable to significant economics losses from climate change that brings more droughts and floods to the region. Existing products have seen policy number declines due to high premiums, inefficient claims processing and corruption, leading to the creation of AgriShield
AgriShield is composed of two base products and two supplementary products:
- Base 1: Peril coverage to protect crops from loss or damage caused by unforeseen events. This ensures that farmers can quickly recover livelihoods, reduce uncertainty and ensure they are compensated with market prices.
- Base 2: Weather index-based coverage to ensure compensation when weather conditions differ significantly from set thresholds. This builds trust through a transparent claims process and increases climate awareness within the community.
- Supplementary 1: material resupply coverage to provide replanting materials upon germination failure due to unforeseeable weather conditions, allowing farmers to salvage the season and fulfil any contractual obligations.
- Supplementary 2: loan reductions when base benefits are activated to ease financial strain, maintain creditworthiness and allow for continued farming operations.
AgriShield would be distributed through localised touchpoints including microfinance institutions and agricultural input providers; increasing trust, access and providing outreach to the community. It would be sold as a meso-insurance, where risks from multiple individuals would be aggregated onto a single policy to provide economies of scale and risk pooling.
The team at Milliman’s office in Singapore facilitated MinionMan at a specially organised lunch on October 10th, attended by the Dean of Business at NBS and faculty of the actuarial department. A few Nanyang Technological University (NTU) alumni working at Milliman Singapore and recently inducted actuarial associates were also present at the lunch.
The other finalists also presented innovative insurance products:
- ‘Actuarial Braintrust’ (Justin Cheng Cheuk Lam, Timmy Cheng Kam, Leung Pak Ching and Matthew Woo Muk Yan) from The University of Hong Kong presented Seni-care, which provides accident coverage for the elderly in Hong Kong and mental health services supported through partnering with NGOs.
- ‘Actually Actuaries’ (Alvie Nguyen, Jessie Khoek, Amelia Phi and Victoria Cheng) from Macquarie University in Australia proposed education insurance for single parents in Asia with an app for personalised support.
- The Institut Teknologi Bandung (Wilbert Alvin Arsa’ad, Juan Alexander Piero and Clarissa Tambunan) from Indonesia presented PATH, an AI-driven insurance platform that offers personalised solutions for the Asia-Pacific region.
- ‘Backyard Actuaries’ (Matthew Lim, Avinesh Bahadur Singh and Jun Zhe Ch’ng) from Curtin University in Australia also presented PATH – which in their case stood for Policy Assistance and Translations Help – to assist new migrants arriving in Australia.
- ‘Risky Business’ (Heidi Shaw, Bronte Sleath, Kurtis Castorina and Aaron Gold) from The Australian National University in Australia presented FijiBetterCare, an affordable health insurance product aimed at addressing diabetes issues in Fiji, with an app to find insulin and track wellbeing and appointments .
- The Institute of Actuarial and Quantitative Studies (Diya Lodaya, Mudita Gupta, Nihaal Verghese John and Hritik Kotadia) in India presented Scarlet Lee, a comprehensive insurance package (term life, health and income replacement coverage with financial wellness assistance) for sex workers in India.
You can watch the full recording of the final here.
We would like to thank Milliman for sponsoring the Innovation Challenge this year, with a special mention to Charles Carneiro and Erica Chan for their contributions to the process. We would also like to thank the Actuaries Institute for their support with running virtual sessions and finalising documents, our judges for marking and feedback during the final round, and the university actuarial societies/faculties for their assistance in running the preliminary round.
CPD: Actuaries Institute Members can claim two CPD points for every hour of reading articles on Actuaries Digital.
