Effective digital strategy a key to bancassurance partnership

Innovative digital approaches and partnerships are key drivers for bancassurance growth and competitiveness in the Asia-Pacific market.

Effective digital innovation and strategic partnerships will drive the transformation of the bancassurance sector in Asia-Pacific, with both developing and mature markets presenting opportunities for bancassurance providers.

Laurent Doucet, Partner and Head of Hong Kong Office at Roland Berger, said that around 93% of banks have some form of bancassurance partnership, with 56% involving joint ventures or sister companies. However, only 13% engage in exclusive partnerships with insurers.

He said that developing markets like Malaysia, Thailand, Indonesia, and the Philippines have shown promising economic roles and significant insurance penetration, making them ideal for testing innovative digital strategies.

“Those markets are actually very good test pits for innovative technological strategies, given the fact that way too low costs go to markets, and they enable like a good balance between the good market and the metrics,” he said.

He added that markets such as Hong Kong, Singapore, Japan, and Korea are seen as key battlefields for careful optimization and defense against disruptive players.

Doucet pointed out that digital channels are crucial in integrating within an omnichannel framework, especially given the competition from mobile wallets, comparison sites, and virtual insurers.

“Banks going digital is essential, focusing on lead and opportunity management, automating administrative processes, and enhancing sales strategies,” he explained, adding that the rise of native digital players, like virtual banks and insurers, offers new avenues for product-design tailored for virtual interactions.

Regarding product innovation, Doucet emphasized the importance of partner enablement and data sharing for targeted customer approaches. “The relationship between banks and insurers needs to be extremely close, in terms of both KPIs and data sharing, for effective product adaptation,” he said.

Doucet highlighted the need for banks to evolve from being mere distributors of savings products to managers of financial well-being. The implementation of digital strategies, while widespread, often falls short of expectations. “About 70% of digital investments do not deliver the expected payback, indicating a need for cautious investment and value assessment,” Doucet said.

Change management is another critical aspect, necessitating effective communication, training, and incentive alignment within and between banks and insurance entities. This approach, said Doucet, is essential for the successful integration and execution of digital strategies in bancassurance partnerships.