Executive Chats with Edwin Sugianto, Chief Operations Officer, AXA Insurance Indonesia

Can you share a bit about yourself and your current role? 

I’ve been in the industry for 25 years. Today I’m working for AXA Insurance Indonesia; it is a general insurance company of AXA Group in Indonesia. We deliver general and health insurance services. I am currently leading multiple functions, namely operations, technology, marketing, digital, HR and the health insurance business. In this role, I am sitting in the driver’s seat for technology and process transformation, as well as running one of the business pillars of the company.

Could you share a bit about your journey for this? How did you first enter the insurance and digital technology space, and was there a defining moment that led you to this multidisciplinary leadership role?

For sure. My background is more in technology. I graduated with both a bachelor’s degree and a postgraduate degree in computer science. Starting as a web developer, I entered a junior managerial level before the age of 25, and a senior management role before 30, as the CIO and CFO of Indorent, the second-largest car rental company in Indonesia. From there, I entered the banking business, doing multiple roles as a product manager as well as a project manager.

I ended my banking experience at Commonwealth Bank as Head of Enterprise Project Services, leading all the project deliveries for the bank across the business, and in 2017 I entered the insurance industry. By mid-2018, I joined AXA as a COO and CMO with the mandate to ensure smooth operations of the company, as well as to innovate the customer experience and the business automation of the company.

The most interesting part is the dynamic of the company. Leading mergers and acquisitions in 2019, and the change of the company’s name in 2023 are two among my major accomplishments. Introducing the first e- commerce platform for B2C and B2B2C, slashing 20% of IT costs, and improving 14% of claim ratio in Health insurance are a few of my footprints. 

As you mentioned, you have been in the industry for more than 25 years, with nine of those years in insurance. Given that experience, what would you say is the most significant challenge? 

When I look back, leading the merger between 2 companies is a true challenge. Here you must integrate the people, processes and technologies of two different companies. When we had just finished the merger, I recall that we received a number of complaints from our distribution agents due to the changes we introduced.

But four months after the merger, I can proudly say that operations have been running smoothly, even without delays and without complaints.. But in order to completely merge the culture into one company, it took about one and a half years before people were truly blended.

At the 2nd place is what most health insurance players experienced in the new normal after the pandemic, namely balancing customer experience and profitability in the midst of ongoing medical inflation.  The industry in Indonesia has a very small penetration rate. We are about 0.5 percent for general insurance, and for the whole insurance sector, it is about 2.7 percent of the GDP. It is still very small.

From a business perspective, we need to really push in all directions, across all channels, in order to enlarge our market penetration. From an operational perspective, we need to be very efficient. We need to run the company in a highly efficient way, streamlining processes and automating. 

In terms of AI adoption, AXA Insurance has developed a robust governance framework and use cases. However, the development of AI in the market is moving very fast. Most companies are still trying to integrate LLM / GenAI into their processes, where people are already talking about agentic AI. This trend, which takes place everywhere across the globe, including in Indonesia, poses another challenge. 

With technology evolving so quickly, which emerging tools or trends are you most excited about for transforming insurance operations? 

Okay, before answering that question directly, I would like to emphasise first that when we talk about Al, we need to be really clear about the use case and ensure it is the best fit for the company’s needs. I see that a number of organisations adopt Al just for the sake of adopting it, following the trend because everyone else is doing the same right now.

In our company, we are very careful about which use cases we implement, and we are also very careful with governance, ethics, and customer data protection. How is the security being developed around Al, and how ready are the people to adopt Al? So, back to your question. In the insurance industry, especially for us in general and health insurance, I think the best use cases for Al fall into three areas. 

Number one is customer experience, where we can improve the level of engagement and satisfaction of customers by using Al in terms of speed, quality, and transparency of responses to customers.

Number two is on the underwriting side, where we can use Al to have better analytics of the situation of prospective customers. For example, in our insurance company, when we try to insure a building, before the era of Al, we needed to send a surveyor to visit the building, assess the conditions, the surroundings, and the potential risks such as flooding or fire.

Now, with Al combined with sensors, lot, and satellite data, we can accurately determine the potential risks of a building, which helps us quantify the premium we will charge. This improves the underwriting process. Similarly, in health insurance, the health underwriters used to review about ten pages of health declarations, which posed the risk of missing important information. 

 Now, with Al, all of this can be simplified. Al can provide predictions and summaries of customer declarations, helping us provide the best solutions and pricing for the customer. Number three is claims management, where Al can help analyse all the facts and evidence documents. For health insurance, this might include a doctor’s diagnosis submitted by the customer.

Al can provide thorough analytics on whether a claim is eligible, whether information is missing, and even flag potential fraud attempts. Al can provide initial analysis and recommendations, indicating whether further investigation is required or if the claim is accurate and can be approved immediately. 

So yes, I see these three areas where Al can play a pivotal role in the insurance industry. 

Looking three to five years ahead, how do you think this intersection of technologies will help the insurance industry evolve, and what major shifts do you anticipate will redefine leadership priorities as these changes take place? 

I see two possibilities. Number one, today, technology, including Al, is primarily used to streamline operations, improve efficiency and effectiveness, and implement automation. Apart from that, Al is used in technical excellence areas, where it helps with fraud prevention, predictive analytics, and similar functions.  What I see for the future is that emerging technology, including Al, can be used to create entirely new business models.

If you recall the era of the rise of startups around 2015 to 2016, with emerging technologies such as smartphones, connectivity, and IoT, people began creating new business models. That was the period when fintech, insurtech, and health tech startups were emerging. Now, I believe we are entering a similar trend, but in a different era with Al.

In the coming one to three years, we will likely see entirely new business models, perhaps even businesses that did not exist before, arising because of the capabilities of Al combined with other digital technologies.

Number two is that, as with other technologies, I see that in the next three to five years, Al will become an integral part of our daily lives. Al will no longer be something strange or highly sophisticated for people; it will be embedded in everyday living. For example, when search engines first emerged, we thought it was extraordinary that we could search for anything on the internet.

Now, everyone, young and old, simply searches online. With the era of video streaming and YouTube, people have shifted from searching on Google to searching on YouTube. I believe that with Al in the coming years, it will become an integral part of business operations. We will no longer be able to operate without Al, and it will no longer feel distant or unusual; it will be something we use on a daily basis. 

How do you approach mentoring and developing the next generation of leaders across IT, digital, and operational functions at AXA? 

I trust the technology advancement will create, again, two things. First, it will require new skill sets to adapt to the new normal with Al and advanced technology. These are skills that did not exist before, such as prompt engineering.

Five years ago, nobody talked about prompt engineering, and the term itself did not exist. Now, I believe it is a skill that students need to start learning in school and university: how to optimise the use of Al with the right prompts, detailed and smart enough so that Al can assist effectively in everyday work. 

It is not only students who need to acquire these skills; current members of the workforce also need to adopt Al in the way they work. They need to be more flexible and adaptive, using Al to assist with reports, dashboards, and other tasks. Second, as I mentioned, Al may create entirely new business models.

I think this will lead to new branches of study that did not exist before and will become popular in the coming years.  For example, consider quantum science and quantum computing. These fields were not widely studied in the past, but in more advanced countries, people are now beginning to learn about quantum technology. Similarly, cryptocurrency was not popular before, but it is becoming increasingly relevant.

In the same way, Al will create new fields of study and opportunities that were previously non-existent but will become important in the near future. People entering the workforce, as well as existing employees advancing in their careers, will need to learn these new skills to survive and to drive the next wave of transformation. 

What is one question you believe every insurance leader should be asking themselves right now? 

One question that every insurance leader should ask themselves is how to stay relevant in the current dynamic environment. In the face of constant changes in the industry, how do I remain relevant with what is happening today, including emerging technologies, Al, and new trends in marketing and branding? Consider the generational shifts as well.

Gen Z is becoming more mature and already entering managerial roles, while Gen Alpha is beginning to enter the workforce. How can I stay relevant with all of these changes? My leadership style is not fixed, as it has always been over the years. I continually adapt and change myself to stay aligned with current trends. I believe that is the most important question for leaders to consider. 

Is there anything else you would like to share that we did not cover, such as experiences that you believe might be valuable for others to hear? 

Yes, there is one important point. Having been in the industry for 25 years or more, technically, in terms of skills, the generation of leaders today may not be able to compete with the younger generations. They are, of course, more energetic, faster, and more accustomed to technology, as they are digital natives. However, what those of us already in leadership positions have, which the younger generation may not yet possess, are wisdom, experience, emotional stability, and mental resilience. 

If I could give one message to all leaders, it would be to make use of the experience and wisdom you have gained over the years, along with your communication and leadership skills, to remain relevant in the current environment. This will also help you develop the next generation of leaders who will succeed you in the future, allowing you to take pride in your legacy as it is carried forward. I believe that is my key message to all leaders in the industry.