Despite the challenges arising from the ongoing global pandemic, Hong Kong, with its expertise and massive capital flows in the insurance market, will always be the Asian hub for multinational insurers
Insurers in Southeast Asia are bullish about their growth prospects for 2022, despite lingering concerns about the potential impact of COVID-19 variants on overall business recovery and return-to-workplace strategies. But beyond ongoing efforts to adapt to the pandemic’s aftermath, insurance leaders are also confronted with multiple fundamental hurdles that could potentially derail their progress.
The impact of COVID-19 has exemplified the need to insure against individual and business risks of various kinds. At the same time, changing consumer behaviour is leading to varied demands of risk protection that are not limited to life, accident or health coverage.
The Asian insurance industry has shown strong resilience, despite the economic crisis brought about by the COVID-19 pandemic since the start of 2020. According to a recent Bank of Singapore article, China‘s GDP is expected to grow by 8.7% in 2021 whilst key Asian countries such as Singapore, South Korea, and Taiwan are expected to grow by an average 5%.
In recent years, Asian insurers have increasingly turned to data and analytics tools to drive growth and improve operational efficiency. Many have invested in starting up analytics teams or setting up insurtech partnerships to launch pilots. To date, some of the most popular use cases revolve around increasing new business by suggesting the next product to buy, improving claim-fraud detection, and increasing the straight-through processing rate of new life insurance policies.
When cities and countries across the world finally come out of lockdown, the society that emerges will be fundamentally different. Post COVID-19, people will continue to increase interacting with friends, family, businesses and governments via digital channels. For insurers, this new approach poses a significant transformation challenge and opportunity. Challenge because the industry is encumbered with numerous legacy systems that are hard to update and a distribution model that still relies mainly on face-to-face interactions and a product push model. Opportunity because this a time when customers seek advice and solutions from their insurers and are open to engage in new ways; also because some of the resistance to new ways of working and engaging has just been taken out by the new normal in a (post) COVID-19 world.
A banking revolution is sweeping across Asia as increasing numbers of countries introduce new regulatory frameworks for digital banking. Malaysia is next: Bank Negara Malaysia (BNM), the central bank, is currently seeking industry comments on a proposed framework for digital-bank licence applications.