Three crucial questions for insurance’s digital future
Insurance is an industry at a turning point. Few could have predicted that “innovation” would become one of its watchwords, but as the digital revolution spurred on by insurtech gathers pace fundamental changes are beginning to take hold.
As we look forward to the launch of InsurTech Rising Asia in Hong Kong next month, when we’ll gather insurance’s digital trailblazers and insurtech innovators, connecting them around the most pressing industry challenges, here are three crucial questions setting our agenda and that of insurance across the region.
How are insurers responding to the customer and tech forces driving change?
With rapidly increasing smartphone use, growing middle classes in emerging markets, and the majority of the world’s population of millennials resident in the APAC region, responding to the demand for a seamless, digital-first service across multiple devices is now a business imperative.
To successfully position themselves in the insurance marketplace of the future then, insurers must ensure that these developments are informing their current strategies.
Yet several challenges confront any incumbent intent on enhancing their digital capabilities in response to customer demand for tech-driven solutions.
In a region as diverse as APAC, how do you gain a clear understanding of customers and their needs? Are customer analytics at the level required to play a role in serving customers better? And how do insurers strike a balance between targeting key segments for growth, such as millennials, and catering for the changing expectations of older consumers in Asia’s mature economies?
Where’s the biggest opportunity for insurtech innovation to deliver value?
While the first wave of insurtech has focused to a significant extent on distribution, and the low insurance penetration across Asia provides a strong argument for continued efforts, the core of insurance represents the next frontier for insurtech innovation.
It’s clear that the processes underpinning everything from product development through to underwriting and claims are ripe for change, so where should insurers be looking to partner with insurtechs to accelerate digital transformation and deliver value to the business? From robotic process automation to deliver efficiencies to the use of advanced analytics to effectively leverage internal and external data sources, there are opportunities right across the value chain.
How can industry players support the growth of the Asian insurtech ecosystem?
As most insurtechs are focused on enabling the insurance value chain, rather than disintermediating and disrupting it, the opportunities for start-ups in Asia are huge.
Insurers across the region are moving to introduce innovative solutions that will equip them with the tools to assess and serve customer risks quicker and at a lower cost, creating partnership opportunities for insurtech “enablers”. And with low insurance penetration, growing middle-classes, and increasingly tech-savvy populations in emerging markets, distribution plays remain attractive.
These are all reasons why many tip Asia for an insurtech boom, but despite the obvious potential we have yet to witness a quantity and quality of start-ups emerge that compares to Europe or the US.
If insurtech is crucial to the insurance industry’s future, what can be done to support the development of a more vibrant ecosystem both within and beyond the notable hubs such as Hong Kong and Singapore?
By Oisin Merrins, editor, InsurTech Rising Asia