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InsurTalks Podcast with Steve Tunstall: The Role of Insurance in Restoring SMEs

8 minutes, 40 seconds read

The impact of COVID-19 has disrupted the trade and supply chain across the world and brought the world economy into a tizzy. Small and Medium Enterprises are especially in a difficult situation. They are facing huge business loss, cash crunch, and some even bankruptcy. Insurance will have a crucial role to play within SMEs in the post-pandemic world. 

To understand the importance of Insurance for SMEs and how various industries should pivot their mitigation strategies towards long term sustainability, we have Mr. Steve Tunstall, CEO and Co-founder of, Singapore. 

The Inzsure platform is designed to transform the global commercial insurance industry by providing SME customers, initially in Singapore, Malaysia, and The Philippines. 

Steve has over thirty years of experience in owning, running, and future-proofing companies. He has been CEO, Managing Director, or equivalent in seven companies in four countries managing teams of up to 500 employees and based in Asia for over 20 years. Steve is also a contributing author to The InsurtechBook and author of “RISK and the Asian CEO” published on Amazon Kindle in 2016. He has deep domain knowledge in Insurtech, Fintech, commercial insurance, compliance, risk, and crisis management. He has been featured in the Top Global Influencer lists of Rising, InsurtechNews, Richtopia, and Onalytica in the areas of Insurtech, Fintech, and Blockchain. 

Connect with Mr. Steve Tunstall – LinkedIn

Here’s the excerpt from the interview:

The Impact of COVID-19 on SMEs in Asia

What’s the magnitude of the impact of COVID-19 in small and medium scale businesses — both globally and Asia specifically?

Steve: The entire world is facing the consequences of the current pandemic which is affecting everybody with no exceptions. 

Some sectors like the hospitality and travel industry have been hit the most. Along with these, service providers and manufacturers have also been affected. Oil industry unexpectedly also saw an all-time low in this crisis. The Global Supply Chain was an obvious sector to get disrupted. The supply chains have become shorter and duplicate. The whole concept of Just-in-time has gone for a toss. SMEs in those affected industries need to rethink their business and close down if necessary. 

The time is tricky and if there’s a short lock-down period, then it will have grave consequences to humankind. Massive spikes in infections will lead to a huge overload on the healthcare system. It’ll create a painful situation for medical professionals where they’ll have to make difficult life-death decisions based on the facilities available. 

However, on the other hand, longer periods of lockdowns will suffocate GDP and damage businesses. Most SMEs can survive if they are in the hot sectors. Once the lock-downs extend more than 2-3 months, it’ll be traumatic to the global GDP. We have already lost 25% of the global GDP. A lot of businesses might go bankrupt and the government cannot bail out everyone. 

These are gloomy times, but business managers and business owners need to think about how to pivot their business and find some sort of viable solution for this.  

The Rise of Digital Insurance Models

Insurers are taking the distribution process online. How are the Insurers adjusting to this new model and how has the customer response been in Singapore?

Steve: Transition towards online sales is a moving target. It has been happening for quite some time now and will accelerate all the more. In the UK around 70-90% of insurance policies are sold online before COVID-19 outbreak. If we split Life and Non-life and further split non-life into Personal and Commercial Insurance, there are three broad buckets-

Life Insurance- This line of insurance is not bought but rather sold. It’s a process to educate people and has a long sales gestation period. It involves a lot of interaction between insurance sales agents and an individual. Even big Life insurance companies are dependent on agents for sales. 

Personal Insurance- This line includes health, travel, motor, property insurance which is mostly sold online. Wealthier economics tend to have more online stuff than developing ones. It’s a bit patchy. But in personal insurance lines, many policies can be bought online in many countries.

Commercial Insurance- This line is the slowest of the three to adopt technology particularly the intermediaries. SMEs should be a good target for online but we have seen very little traction in Asia. Large companies are much slower in the adoption of digital technology and rely on face-to-face interaction with brokers. 

Covid-19 has become an accelerator for online especially for Life and Personal Insurances. Broadly speaking, 80% of the personal and life insurance are standardized. Only 20% need underwriting input. In Commercial lines, 20% is commoditized and 80% is bespoke. It is still a long journey. We have already seen insurance being sold online in the US and Europe and seem to go ahead in Asia. 

Many Insurers have been resisting online and commoditization for years. But giving customers choice, trust and transparency is the way to improve overall penetration in Insurance. 

The Importance of Insurance for SMEs

Since the pandemic started, fewer businesses (especially SMEs) are seeking insurance because of the loss of cash flow. How do you think your platform could help SMEs in this current situation?

Steve: It’s a common human tendency that you don’t need an umbrella during a light shower so you don’t buy one. But when the rain is hammering down, you go buy one only to find out that shops have run out of them. There are gaps in the knowledge about insurance. Not only within SMEs but also many businesses. 

In Asia, there’s less insurance required by the law and hence insurance does not tend to sell much. It’s the discerning and more naive one who gets sold insurance. The issue is that people do not know why insurance is a good thing and should be made a priority. Not all types of insurance perhaps, but businesses need to look at appropriate insurance which is tied to risks holding on their balance sheet. For example, fire is a big risk. Maybe not for a co-working space where data is on the cloud but for traditional businesses, you need to have insurance. 

Insurance in the New Normal

What are some new business models that Insurance Carriers are considering to meet the expectations of life in ‘The New Normal’? More specifically, where is the new business going to come from, for Insurance, over the next two years?

Steve: Around 30 years ago, businesses had their own properties for which they would need a cover, their machinery, they would operate out of a premise. But these days, most businesses do not own property, they are working in rented premises and have data on the cloud. 

There’s been a shift away from physical assets towards liabilities like loss of data, hacking, legal and regulatory obligations. All these different liability types are growing exponentially which creates a lower demand for property insurance. 

The traditional property and casualty insurance relies on historical data for calculating premiums. But for these emerging liabilities, it is difficult for insurers to get their head around its implications. Taking Cyber insurance policy for example. If businesses are not able to link the loss incurred due to cyber hacking, then insurers won’t payout. If an amazon web service goes down for the entire building, other businesses also have faced losses that accumulate losses to other companies as well. This accumulation of loss is worrying the CEOs now. This could be a huge opportunity for insurers to address these emerging liabilities in a meaningful way.

Speeding-up Claims during COVID-9 crisis

The pandemic has put a lot of pressure on health claims due to the increase in the volume of claims. What do Insurers need to do to speed-up their claims processes?

Steve: Out of all the processes in the insurance, claims appear to be the most painful and complained about. Surely, there will be an increase in claims related to COVID-19. In the US a typical COVID claim is looking somewhere between $20,000 to $100,000 but in Asia, it is much more bottom of that range. 

But on the other hand, another effect of COVID-19 is that since so many medical facilities around the world have seen a massive decline in regular doctor visits and elective surgeries. Therefore, there has been a reduction in the claims for other health ailments. We will see some of it coming in the upcoming months, probably in Q3 and Q4. For now, it has brought a balance in the number of claims.

Technology trends post COVID-19

How can technology help in sustaining the Insurance business and what are upcoming technology trends? Also, what industry will expect from technology service providers?

Steve: I believe that all the technology that is needed for insurers to work efficiently and perfectly online is already available. What is most needed is a huge change in mindset amongst the insurers. As an industry, people who build the products should not be separated from people who sell the products. 

On the customer side, insurance is not a product where you get instant gratification. Knowing the importance of insurance for SMEs, appropriate education about risk management can help. The change in mindset will impede the implementation of technology. 

Also read – 10 Most Impactful AI-based Insurance Innovations of 2019

Digitizing Insurance Processes

COVID-19 will propel insurers to increase the digitization of their operations and interactions with clients. We may also see insurers scaling back on their physical office networks and moving more people to remote working. More focus will fall on the automation of processes for greater cost efficiencies and resilience. What, according to you, are the crucial insurance processes where automation will disrupt first?

Steve: It depends upon where you are in the supply chain. The more insurers can automate their internal processes, the better. Underwriting is an area where AI plays a crucial role in making this process easy and cost-efficient. 

For insurers, when it comes to back-office functionality, cost-cutting will be a high priority due to the COVID-19 crisis. Technology can bring more efficiency to the intermediary processes making adoption of insurance for SMEs easier.

Also read – 5 Insurance Front Office Operations AI Can Improve

AI is going to be essential for Insurers to gain that competitive edge in the post-pandemic world. Check out FlowMagic— an AI-driven platform for Insurer workflows and Hitee — an Insurance specific chatbot for driving customer engagement. For your specific requirements, please feel free to write to us at 

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