A dialog with Raymond Lai, FSA, FASM, CFP, NLP, CBE, AI and threat administration skilled with Nicholas Actuarial Options, Malaysia
August 2024
Picture: Kret Sources
Raymond Lai, FSA, FASM, CFP, NLP, CBE, has expertise throughout many Asian insurance coverage markets, together with Bahrain, Myanmar, Vietnam, Malaysia, Labuan and Indonesia. On this Q&A, he shares classes discovered throughout his 30-plus-year (and counting) profession devoted to insurance coverage, answering why he turned an actuary and extra.
Inform us a bit about your self.
I attained my Fellow of the Society of Actuaries (FSA) in 1997 and have over 30 years of actuarial, monetary and threat administration expertise in life insurance coverage, normal insurance coverage, household takaful insurance coverage, medical insurance coverage and InsurTech startups.
Beforehand, I held appointed actuary, chief actuary and chief threat officer roles in Malaysia and Vietnam. I’m at present heading the chance administration follow for Nicholas Actuarial Options, Malaysia. I additionally held appointed administrative roles for a world international reinsurer in Bahrain and Labuan and a neighborhood InsurTech startup firm.
I used to be the Actuarial Society of Malaysia’s president from 2007-2008 and am at present a member of the SOA’s Greater Asia Committee.
Video Unique: Raymond Lai Discusses InsurTech in Asia
Why did you turn out to be an actuary?
After graduating from a neighborhood college (College of Science of Malaysia in Malaysia) with a first-class honor (Bachelor of Science, Schooling), having majored in arithmetic and statistics with schooling, I regarded for profession alternatives the place I might apply my information and expertise. After getting recommendation from mates and senior actuaries, I made a decision to problem myself and pursue an FSA via self-study, which most native graduates discovered to be unimaginable. It took me seven years to be the primary native college graduate to qualify as an FSA via self-study. I used to be the position mannequin for the native college graduates at the moment.
Why did you determine to affix the SOA’s Larger Asia Committee? How do you profit from being an SOA volunteer?
Previously, I actively promoted the actuarial occupation via the Actuarial Society of Malaysia, profession occasions and schooling festivals. I used to be invited to conduct profession talks at schools and universities for college kids and their dad and mom. I used to be additionally an Worldwide Ambassador Volunteer for Malaysia for numerous years, however I used to be not notably energetic as a consequence of a job dedication abroad in Vietnam. Nevertheless, I continued to advertise the actuarial occupation in Vietnam.
After I got here again from an abroad project, I continued to be actively concerned as a speaker at actuarial conferences, selling the actuarial occupation at native universities and networking with actuarial colleagues domestically and globally.
I made a decision to take the chance to volunteer with the SOA’s Larger Asia Committee to proceed my contribution to and participation inside the actuarial occupation. The advantages of being an SOA volunteer are many. Listed below are six that stand out to me:
- It’s a chance to symbolize the SOA and contribute to and promote the actuarial occupation to college students, their dad and mom and universities.
- It’s a chance to be taught from different SOA members concerning the challenges different international locations face within the actuarial occupation, schooling and insurance coverage industries.
- It’s a chance to share my experiences, expertise and information.
- It permits me to remain updated on the developments occurring on the SOA.
- It offers networking alternatives for future collaborations, partnerships and connections.
- I can reap the benefits of skilled improvement and ongoing studying.
Inform us about your present and most up-to-date roles. What motivates you to dive deeper into InsurTech in Asia?
Presently, I’m the appointed actuary for a neighborhood InsurTech startup firm that Financial institution Negara Malaysia authorised below the Monetary Know-how Regulatory Sandbox Framework. This framework offers a regulatory setting conducive to the deployment of monetary know-how and facilitates significant innovation within the Malaysian monetary sector.
There are thrilling issues about being concerned in an InsurTech startup. I get to grasp and be taught concerning the necessities of the Monetary Know-how Regulatory Sandbox and leverage the totally different applied sciences concerned within the front-end acquisition of shoppers. I even have the chance to be taught extra about proposals, “know your buyer,” premium funds, threat choice, underwriting automation, speedy issuance of insurance policies, administration and so forth. However challenges are at all times there, akin to develop the variety of insurance policies and management advertising prices successfully.
InsurTech was a brand new buzzword a couple of years in the past. These startup know-how corporations are attempting to disrupt the normal insurance coverage enterprise mannequin, however most nonetheless want to achieve information and experience of the insurance coverage enterprise. I imagine everybody ought to have insurance coverage protection, and insurance coverage merchandise must be easy and simple to grasp. Clients should purchase what they want, and the expertise must be great.
Claims must be paid inside 24 hours, if not instantly. I see a chance to be concerned in InsurTech in Asia due to my expertise as an progressive actuary, product designer and threat supervisor, and I’ve a deep understanding of insurance coverage corporations’ total operations.
How has InsurTech grown and affected the Asia insurance coverage market? What traits have you ever noticed recently?
The worldwide COVID-19 pandemic considerably affected the adoption of InsurTech’s digital transformation in Asia, accelerating its development and driving innovation within the insurance coverage business. There was a surge within the demand for digital options and a shift to a web-based channel. The InsurTech corporations capitalized on these calls for and launched their digital options, akin to a web-based platform for getting insurance coverage, product comparisons, auto underwriting, buyer engagement for customer support, submitting claims and extra.
Due to modifications in client conduct, prospects’ expectations even have modified. Clients love to do analysis and examine choices earlier than shopping for. Clients count on higher engagement and immediate and customized service. These modifications in buyer conduct and expectations even have led some corporations to make use of robotic course of automation, customized chatbots and generative AI (GenAI) to satisfy their wants.
Within the Asia insurance coverage market—particularly in Singapore, Hong Kong and Vietnam—my observations are that every one insurance coverage corporations are accelerating their digital transformations. Some are beginning to leverage applied sciences like GenAI via customized chatbots in buyer engagement and servicing, managing inner queries on coverage and procedures associated to human assets, compliance on anti-money laundering and countering financing of terrorism (AML/CFT), and so forth. Robotic course of automation has streamlined backend processing to cut back operational prices and enhance effectivity. Few corporations have used AI and machine studying to investigate huge quantities of information to grasp client conduct and assess their dangers extra precisely.
Blockchain know-how has been explored, however not many corporations have been profitable find good use circumstances for it. The explanations may very well be insufficient infrastructure, regulation and excessive implementation prices.
There are some observable traits for partnerships and collaborations amongst know-how startups, insurance coverage corporations and well-liked customer-based platforms. Bolttech, a world InsurTech firm, has partnered with Viettel Telecom, certainly one of Vietnam’s largest telecommunications operators, to supply a spread of insurance coverage merchandise together with well being, journey, residence, automotive and motorcycle insurance coverage. Standard apps like Seize, a ride-hailing startup tech firm, have began providing monetary merchandise to leverage their massive person base.
How have you ever seen InsurTech initiatives evolve? What’s your view on how actuaries might trip the waves of the InsurTech evolution?
Presently, InsurTech initiatives concentrate on buyer engagement, analysis, evaluating product platforms and gross sales collaboration as dealer platforms. They’ve began to evolve into a completely digital expertise, from frontend gross sales to backend platforms. Declare submission may be finished on-line.
Despite the fact that the main focus of InsurTech in Asia is on buyer engagement, akin to in gross sales, underwriting and claims, I imagine that the evolution of recent know-how will not directly have an effect on the position of the actuary. Historically, an actuary used statistical fashions for knowledge evaluation to cost merchandise. With the provision of quantum and cloud computing energy, huge knowledge from client conduct and engagement, and superior analytical instruments, actuaries might want to adapt their roles and purchase new expertise so as to add worth.
Actuaries might embrace knowledge analytics to determine market traits and buyer segments and develop progressive, customer-centric insurance coverage merchandise that meet their wants and preferences. They might incorporate buyer preferences and conduct to boost their modeling strategies, assess threat and develop extra customized product pricing fashions. These buyer engagement and conduct knowledge may be included into the valuation, enterprise and threat evaluation fashions.
Actuaries might collaborate with firm knowledge scientists to use superior knowledge analytics strategies and machine studying algorithms to achieve insights into datasets based mostly on buyer engagement and conduct. These insights can be useful for actuaries and administration.
I hope that actuaries may be trendsetters.
What do you are expecting will occur with InsurTech within the subsequent few years, and the way will modifications in know-how have an effect on actuaries? What are the challenges the market at present faces?
I anticipate that InsurTech in Asia will proceed to expertise speedy development, particularly with using GenAI and machine studying. The present pattern is making use of GenAI, and this know-how is in excessive demand from enterprise items in addition to from boards of administrators within the insurance coverage business. I imagine that GenAI will change the way in which we run the insurance coverage enterprise—it may make the business more cost effective and environment friendly and put extra concentrate on client expectations and desires.
With GenAI, machine studying and massive knowledge out there from all digital gadgets via the Web of Issues, actuaries might perceive and use knowledge analytics strategies or instruments and machine studying algorithms to investigate the huge quantity of information to evaluate dangers and acquire insights for enhancing buyer expectations and creating customized merchandise.
Nevertheless, regardless of InsurTech’s potential to disrupt the insurance coverage business within the close to future, the market at all times faces challenges. The principle problem is regulatory compliance with present insurance policies and tips. I count on that the rules and insurance policies must be reviewed rapidly to accommodate innovation.
Cybersecurity and privateness issues associated to knowledge assortment and storage and using delicate knowledge must be addressed. Failure to deal with these issues will end in reputational dangers and regulatory penalties. I imagine these issues may be mitigated via an efficient threat administration framework.
The excessive value of implementation involving preliminary upfront capital for know-how infrastructure, expertise acquisition and coaching can be tough to justify if an organization solely considers the quick time period. I imagine that corporations ought to take into account the long run to justify the return on funding in know-how infrastructure. A mindset shift from the board and high administration can also be crucial in adopting new know-how.
There are a number of knowledge out there in lots of types inside an organization. The problem is the shortage of obtainable high-quality knowledge. Poor knowledge will impression the accuracy and reliability of actuarial evaluation. I imagine that earlier than implementing an AI technique and utilizing analytics, an organization ought to have an information technique in place.
Along with your intensive expertise within the actuarial occupation and publicity to totally different markets like Malaysia and Vietnam, are you able to share some expertise actuaries might domesticate to help in profession development, no matter their area and geographical location?
The flexibility to proceed studying and adapt to modifications or traits are a few of the most essential expertise for profession development. Most actuaries have sturdy analytical expertise however poor communication expertise. These expertise are essential, particularly once we need to collaborate with others.
A robust understanding of the insurance coverage business, together with key traits affecting distribution, new know-how, operations, rising dangers, regulatory modifications and aggressive dynamics, can be nice to have. Additionally, be progressive and prepared to experiment.
your profession so far, what’s a very powerful lesson you will have discovered?
Crucial classes I’ve discovered are the worth of steady studying, having a development mindset in searching for new information and being adaptable. Professionalism, integrity and ethics are essential, particularly within the actuarial occupation.
Do you will have any normal recommendation for actuaries or others keen on InsurTech who need to begin making use of it to their work however need assistance realizing the place to start out?
The very first thing you would do is educate your self about InsurTech and perceive its potential functions. Then, community and join with others by attending and becoming a member of InsurTech communities and occasions, and work with InsurTech professionals at any time when you will have the chance.
Statements of reality and opinions expressed herein are these of the person authors and usually are not essentially these of the Society of Actuaries or the respective authors’ employers.
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