Asia Pacific is one of the regions that may have the most to gain from advances in Insurtech.
That’s the view of a new report from Willis Towers Watson which is making waves within the industry. The global risk advisors’ latest Asia Insurance Market report highlights the accelerating take-up for advanced analytics in the Asian insurance and reinsurance market. This growth is found to be disrupting and rebalancing the global insurance market, offering new opportunities for APAC’s insurtech startups.
Naturally, big data underpins the APAC appetite for advanced analytics. IDC predicts big data/analytics revenue will reach $14.7 billion in 2018, a 14.1% year-on-year increase. However, this comes with the caveat that ‘most are yet to take-off with full scale implementation and the vast majority are currently taking an ad-hoc and opportunistic approach’.
Customer experience is a key driver for insurers, mirroring many customer-facing industries such as retail. Although with a population of over four billion, many operating in Asia Pacific marketing functions are still working out how to harness and channel customer insights buried within the data. Of course, this is changing – in 2017 the number of APAC people accessing the internet was approaching 2 billion. Or to put it another way, 2017 was the year when over half the world’s online population came from APAC.
Foundation for success
Hong Kong and Singapore are in pole position to take advantage of the advanced analytics demand.
Both have long-established and trusted financial and legal systems, within urban and smart city environments. Singapore’s long-established support for startups, exemplified by its governmental Monetary Authority of Singapore, means it can expect to attract fintech-fuelled opportunities.
While both are situated well for international trade, Hong Kong’s proximity to China gives it an advantage when attracting business.
Maintaining the insurtech boom
The insurance industry, like others that fall under the financial services umbrella, still has many obstacles around legacy systems and architecture to overcome.
Up to now, this has in turn meant obstacles for companies embarking on digital transformation programs. Many within the industry believe that this means a new approach is needed, to further accelerate insurtech adoption. For example, increasing partnerships with startups and disruptors, much like the banking industry has already done to great effect.
George Kesselman, President of the InsurTech Asia Association, says ‘until that happens, digital will always be marginalised under a ‘cost centre’ label.’. However, APAC may be in the best position to forge ahead. Returning to the Willis Towers Watson report, this because ‘While Asia may be in its infancy of financial development, the region may effectively serve as an incubator for InsurTechs that ultimately end up transforming more developed markets currently controlled by traditional incumbents.’
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