Neil Katkov

About Neil Katkov

Neil Katkov, PhD, is the Senior Vice President of Celent's Global Asian Financial Services Group, based in the firm's Tokyo office. His areas of expertise include the Asian financial services industry, financial services distribution channels, and compliance issues including anti-money laundering and business continuity planning.

Reporting from Celent’s Model Insurer Asia Summit

Reporting from Celent’s Model Insurer Asia Summit

If 2015 was the year of FinTech, 2016 will surely be the year that InsurTech comes into its own. Celent has been presenting our views on InsurTech and emerging technologies at insurance conferences throughout Asia for some time now, so naturally we see this as a welcome—and inevitable—development.

We held our 7th Annual Model Insurer Asia Awards event in Singapore last month, with presentations focusing on InsurTech and digital financial services. Celent Research Director Karlyn Carnahan set the tone with a keynote presentation on the challenges facing insurers as customers are increasingly seeking real-time, digital interactions tailored to their personal needs and channel preferences. Karlyn outlined the steps to becoming a digital insurer and provided many insights on how insurers can embrace the digital paradigm. In the afternoon session, Karlyn also led a peer-to-peer discussion on how insurers in Asia are responding to these significant changes in the digital landscape.

We were delighted to have GoBear, one of the stars of Asia InsurTech, on the program. GoBear is an online financial services aggregator with a decidedly digital offering that is expanding at a remarkably fast pace throughout Southeast Asia. In his keynote presentation, GoBear’s CEO Andre Hesselink discussed how his firm developed their product with the goal of better serving consumers while at the same time satisfying the business needs of their suppliers, the insurance carriers. Quite the balancing act I am sure.

Celent Analyst KyongSun Kong presented the results of Celent’s annual Asia Insurance CIO survey, revealing that nearly 80% of insurers surveyed are engaged in digital transformation initiatives.

Finally, we came to the heart of the event: the Model Insurer Asia Awards themselves. This year we celebrated best-practice technology initiatives at 14 insurers, including ICICI Lombard General Insurance, Taikang Insurance, multinationals Aegon and MetLife, and online insurance innovator DirectAsia, among many others. All winning initiatives are profiled in our report Celent Model Insurer Asia 2016: Case Studies of Effective Technology Use in Insurance.

Announcing the winners of the 5th Asia Insurance Technology Awards

Announcing the winners of the 5th Asia Insurance Technology Awards
Celent and Asia Insurance Review hosted the 5th Asia Insurance Technology Awards (AITAs) at AIR’s CIO Technology Summit at Le Meridien Hotel Jakarta on 1 September 2015. The AITAs recognize excellence and innovation in the use of technology within the insurance industry. This year we received over 30 nominations from Australia, Hong Kong, Taiwan, India, Sri Lanka, Indonesia, and Pakistan; as well as the Asia Pacific divisions of global insurers. There were many impressive submissions, from which our international panel of Celent insurance analysts selected the very best to receive the six awards. The Innovation Award recognizes innovation in business models or in the use of technology. The winner was MetLife Asia. MetLife Asia implemented Advanced Data Analytics to transform big data into customer insights and to deliver a more personalized customer experience – delivering the right products and services, for the right people, at the right time. They are using these insights to inform product and services development, and to deliver sales leads to agents. The company won the award because of the innovative usage of data analytics. The IT Leadership Award honors an individual who has displayed clear vision and leadership in the delivery of technology to the business. The recipient will have been responsible for deriving genuine value from technology and has demonstrated this trait with a specific project or through ongoing leadership. The winner was Girish Nayak, Chief – Customer Service, Operations and Technology at ICICI Lombard General Insurance. ICICI Lombard implemented a business assurance project to address the ever present gap between real business uptime on the ground vs technology uptime. The firm implemented an in-house customer experience center; and deployed an infrastructure as a service model in Microsoft Azure Cloud. These initiatives generate genuine value for the business. The Digital Transformation Award honors an insurer who has made the most progress in implementing digitization initiatives. BOCG Life was the winner. BOCG Life implemented the Electronic Commerce System to provide online needs analysis and policy services. Through a transparent, direct and needs-oriented process, it facilitates prospective customers applying for multiple products they need in one go, and allows customer to adjust the offer according to their budget. The company won the award because of the way it is building trust and developing long-term relationships with customers through digital transformation. The Best Newcomer Award recognizes the best new player in the insurance technology field. The winner was CAMS Insurance Repository Services. CAMS Insurance Repository Services launched the Insurance Repository to provide e- Insurance Accounts to maintain policies as e-policies. This brings new efficiencies and benefits across the stakeholders, including Policy Holders, Insurers, Agents and the Regulator. The company won the award because they demonstrated real, unique value to the ecosystem. The award for Best Insurer: Technology honors the insurer who has made the most progress in embracing technology across the organization. The winner was RAC Insurance. RAC Insurance implemented a series of projects to digitize the business between suppliers, members and RAC Insurance. These projects include Claims Allocation, Motor Repairer Integration, and a B2C platform. The company won the award because of the way technology transformed the organization’s capability by offering an exceptional, one-touch experience for their members through online channels. Finally, the New Business Model Leveraging Mobile Applications Award recognizes the insurer who has developed a new, perhaps disruptive business model involving the innovative use of mobile technology. Max Life Insurance won the award. Max Life Insurance launched mServicing and mApp which enable digital servicing of customers, sales force and operations. The company won the award because of the use of mobile technologies to increase agent activity and engagement, enable speedy issuance of policies, and enhance business quality and operational efficiency. Be on the lookout for the 6th Asia Insurance Technology Awards in 2016. We’ll post another blog when the nomination period opens, sometime around June 2016. You can also find information on Celent’s website: http://www.celent.com/aita.

On the cusp: regional integration in Asia

On the cusp: regional integration in Asia
It’s 2015, the mid-point of the decade and a good time to start looking at major trends in Asian financial services over the next five to ten years. One of the major themes will be regional integration, which is another way of saying the development of cross-border markets. There are at least two important threads here: the ongoing internationalization of China’s currency, and the development of the ASEAN Economic Community (AEC) in Southeast Asia. RMB internalization is really about the loosening of China’s capital controls and its full-fledged integration into the world economy. And everyone seems to want a piece of this action, including near neighbors such as Singapore who are vying with Hong Kong to be the world’s financial gateway to China. The AEC is well on its way to becoming a reality in 2015, with far-reaching trade agreements designed to facilitate cross-border expansion of dozens of services industries, including financial sectors. While AEC is not grabbing global headlines the way China does, we see increasing interest in Southeast Asia among our FSI and technology vendor clients. From Celent’s point of view, both trends will open significant opportunities across financial services. In banking, common payments platforms and cross-border clearing. In capital markets, cross-border trading platforms for listed and even OTC products. In insurance, the continued development of regional markets. Financial institutions will be challenged to create new business models and technology strategies to extract the opportunities offered by regional integration. It’s the mid-point of the decade, and the beginning of something very big.

Quotes from the Innovation Roundtable

Quotes from the Innovation Roundtable
They said it couldn’t be done, but we held the latest installment in Celent’s series of innovation roundtables in Tokyo recently. Our innovation roundtables put the focus squarely on interactive discussion among the participants. This is a relatively untried model in Japan, where events typically take the form of conventional conferences with presentations. We’re glad we tried it though, because we got a very interesting line-up of firms. Participants included the whole spectrum: banks, capital markets firms, and insurers; Japanese and foreign firms; traditional mega-institutions and alternative new entrants. The discussion was lively; below are some quick notes I took of some of the more interesting comments made, to capture a bit of the flavor of the day. Why Innovate? “Innovation is not the goal, it is a method and a tactic.” “We need to innovate because it has become difficult to differentiate us from our competitors.” “In today’s environment, innovation is necessary if you want to stay profitable.” Paths to Innovation “Incremental innovation is an axymoron. You can’t innovate by increments; innovation requires a big bang change.” “It might be possible to rearrange existing elements to create something new.” “When to innovate? If our clients think a new service is interesting, we try and create it for them and see if it succeeds.” “Innovation needs to be business driven.” “Financial institutions need to have an innovation division; an incubation unit that accumulates ideas from throughout the company.” IT and Innovation “IT is not the impetus for innovation, but because IT inevitably evolves, that creates need for innovation.” “Legacy is a barrier: it is hard to throw things away.” Cultural Challenges “We need to justify ROI on any investment each fiscal year. It is hard to show this on an innovation project.” “If you think about it, financial institutions don’t even have R&D departments.” Quote of the Day “Changing company culture is really about changing oneself. I personally enjoy innovation and change. Innovative culture is about getting a bunch of people together who enjoy change.”

Insurance and Japan

Insurance and Japan
One might naturally assume that the tragic events in northeastern Japan would also be devastating the Japanese insurance industry. By the beginning of April some 320,000 P&C claims related to the disasters had already been filed with insurers. After the Kobe earthquake of 1995, when many home and business owners discovered their policies did not cover the damage, people got in the habit of buying earthquake / tsunami insurance. So fortunately more properties were insured on 3/11 than may have been otherwise. In conversations with Japanese carriers, however, Celent has found that insurers are remarkably sanguine about the likely effect on the industry here. Firms say they have adequate reserves set aside precisely to cover an event of this magnitude, which has long been predicted. As a result, Celent expects that major Japanese insurers will continue to invest in strategic initiatives to boost competitiveness and lower costs in this very crowded market. IT spending growth at Japanese insurers, which has been close to flat for years anyway due to the maturity of the market, will suffer a modest dip in the short term. Smaller insurers are likely to put off renewal projects for a while. Pressure to merge will increase at some firms, but again the industry has seen a spate of consolidation activity in recent years already. The recent events are likely to encourage Japanese insurers to accelerate their international expansion efforts, which are already underway. Carriers have been looking abroad for growth opportunities, especially to the Asia Pacific region but further afield in the Americas and Europe as well. In Tokyo, along with the concern, there is a new competitive spirit in the air. April is the start of Japan’s fiscal year and businesses look determined to find ways to grow even as the economy is forecast to contract. The insurance industry would be no exception. For example, the past year has seen the emergence of new internet and mobile based distribution models and products, approaches which seem almost tailor-made for the post-3/11 era. Technology suppliers will want to know that amplified interest in business continuity is leading insurers to think seriously about cloud computing. The blooming sakura and early spring sunshine might be distracting me from some of the harsher realities of 21st century Japan. But certainly a little optimism is not misplaced in what is after all one of the world’s major insurance markets.

Celent's anti-money laundering vendor report: 2009 update

Celent's anti-money laundering vendor report: 2009 update
Celent’s AML vendor evaluation reports have become something of a de facto standard, referenced by financial institutions and regulators around the world. We began covering the sector in 2003, and are about to start work on our 3rd edition of the report. Although initially the insurance industry was not seen as a high-risk area for AML, in recent years AML has grown as a concern for insurers and regulators. The behavior detection technology that underpins AML software has also expanded its boundaries within the financial institution. Celent has been behind the “enterprise risk” approach, that is, consolidating AML and anti-fraud efforts, since our first AML report back in 2002. But until the last few years there were few real-life examples to point to. Recently, however, financial institutions have become increasingly concerned with fighting fraud, including fraud committed by customers as well as employee fraud. And a growing number of firms are beginning to take a wholistic approach to these issues. So this time around our report will take an enterprise risk approach as well, by including in our evaluation the anti-fraud products of the AML vendors. We’re calling it “Evaluating the Vendors of Enterprise Risk Management Solutions 2009.” We’ll be starting research on the report this month, beginning with qualifying vendors for inclusion in the report. The last edition evaluated 19 vendors and was 100 pages long. As the market has shifted, with new products emerging and others fading from sight, there may be some shuffling in order to keep the field of vendors representative of the marketplace. And although we are constantly looking at this space, we’d welcome any comments on vendors we should consider that we may have missed. As a reminder, the AML software providers evaluated in the 2006 edition of the report were: Accuity, Ace Software Solutions, ACI Worldwide, Actimize, ChoicePoint/Bridger Insight, Experian/Americas Software, Fortent/Searchspace, FircoSoft, LogicaCMG, Mantas, Metavante/Prime Associates, Fiserv/NetEconomy, Norkom Technologies, Northland Solutions, SAS Institute, Side International, STB Systems, Top Systems, Wolters Kluwer Financial Services/PCi

Japanese Insurers Poised for Technology (r)evolution

Japanese Insurers Poised for Technology (r)evolution

In Japan, Internet banking and online brokerage have been around for some time. The Internet revolution is taking a bit longer to come to the Japanese insurance industry. Currently, most insurers’ web sites are limited to providing information and some online tools, such as premium calculators or financial planning simulators. Customers who want to actually buy some insurance are directed to call a contact center, which will then mail application materials to the customer. In 2008, though, two firms–SBI AXA Life Insurance, a joint venture between Softbank Investment and AXA; and Lifenet Insurance, a greenfield firm– began to offer fully online insurance sales for the first time in Japan.

But for the most part, the insurance industry here has yet to realize the benefits of Internet-era communications in reducing processing cycles, supporting agents, or improving customer service. Here and there some new technologies have been adopted—some firms have built basic agent extranets and offer some online policy and claims information to their customers. The basic building blocks for a more integrated insurance infrastructure, however, are not in place. SOA is in its infancy in Japan, and the use of standards is limited. “Business intelligence” software generally takes the form of embedded Excel spreadsheets used by analysts and underwriters in lieu of more efficient assisted workflow solutions.

Change is on the horizon, however. Japanese insurers have seen foreign entrants succeed in taking large chunks of their market share, particularly in new product areas like retirement and health products. This has focused their attention on some of the techniques used by the foreign entrants, such as the BI used to support direct marketing, and more flexible core systems.

Due to a long-term trend towards declining market size—a result of the country’s shrinking population–Japanese insurers are also under intense pressure to reduce costs. This is driving even large domestic insurers for the first time to consider international vendor solutions and even outsourcing. As insurers move towards more modern, flexible PAS and claims systems, they will look to update their infrastructures, introducing more remote channel capabilities for their salesforce and agents as well as their customers. We expect the technology landscape at Japanese insurers will be transformed steadily, and in the end significantly, over the next few years.