Insurance/Insurtech Trends in APAC!

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Today, our insurance world tour continues with a look at trends in Asia-Pacific. This Regional Profile on Asia-Pacific is drawn from our inaugural Insurance Nexus Global Trend Map, an in-depth quantitative-qualitative account of Insurance & Insurtech trends in all four corners of the globe.

Access all seven Regional Profiles straight away by downloading the full Trend Map here!

This Asia-Pacific profile combines quantitative insights derived from our global survey, some of which we alluded to in our previous post introducing our Regional Profiles, and qualitative perspectives from three in-region commentators:

  • Steve Tunstall, CEO at Singapore-based Insurtech start-up Inzsure
  • João Neiva, Head of Innovation, IT and Business Change at Zurich Topas Life in Indonesia
  • David Piesse, Chairman of IIS Ambassadors and Ambassador Asia Pacific at the International Insurance Society (IIS), based in Hong Kong

Before we move on to our more general thematic discussion, firstly: a quick overview of the salient stats from our insurance trends survey, as they manifested themselves in Asia-Pacific.

Key Stats: a Quick Recap

--- i) The External Challenges: Asia-Pacific

In Asia-Pacific, the top external challenges facing insurance as a whole follow the global trend familiar from our earlier post on Industry Challenges, with ‘Technological advancement’ and ‘Changing customer expectations’ taking first and second place respectively, except that, as in North America, in third place we find ‘New emerging risks’(by way of comparison, this challenge only makes 6th place in Europe). 

One possible explanation for the higher ranking of ‘New emerging risks’ is to be found in the related challenge of ‘Catastrophe risk’ – which also results one place higher in Asia-Pacific than was the global trend.

While natural catastrophes are not emerging risks, in the sense that they have always occurred, their consequences are becoming more multifaceted as a result of the massive growth in urban areas and the rife interconnection of business in today’s globalised economy. This has introduced a new class of accumulation risk which could justifiably be called ‘emerging’.

We know anecdotally that this phenomenon is particularly pronounced in the APAC region, which boasts some of the densest urban and business conglomerations in the world, in and among noted catastrophe zones, and the trend towards urbanisation and megacities is only set to continue.

Another detail we notice with the external challenges is the relatively high position attained by ‘Increased competition’ (two places up on the global trend), and we believe this is a natural consequence of the expansion opportunities on offer in the region. As we will uncover as we move through this Regional Profile for Asia-Pacific, this uneasy marriage of high growth and high competition is in many ways APAC’s defining market characteristic: to win is only ever to win big.

Get the full Regional Profile for Asia-Pacific straight away by downloading the full Trend Map free of charge here ...


--- ii) The Internal Challenges: Asia-Pacific

The internal challenges highlighted by APAC respondents exactly replicate the global trend we staked out in earlier post on Industry Challenges, with a top three constituted by: ‘Lack of innovation capabilities’, ‘Legacy systems’ and ‘Finding and hiring talent’.

--- iii) Insurer Priorities: Asia-Pacific

The following 6 priority areas are those on which insurers in Asia-Pacific lead our other regions, out of our shortlist of 15 priority areas introduced in our earlier post on Insurer Priorities:

See also: Insurance Nexus Global Trend Map #3 Insurer Priorities


--- iv) Asia-Pacific Top Trumps

The table below is in the style of Top Trumps, with a regional score for each characteristic — we have tables for Europe and North America in their respective profiles too. A full explanatory key is included within the full Trend Map, which you can of course download for free whenever you like.

In our conversations with our in-region commentators – Steve TunstallJoão NeivaDavid Piesse – we identified 5 key discussion points, the first two of which we cover in today's post:

  1. The high-growth, high-competition dynamic inherent in the Asia-Pacific insurance market
  2. The new calling for customer-centricity and the related question of disruption
  3. Using data and analytics to create more customer-centric products, such as personalised, on-demand insurance
  4. APAC distribution landscape, and what insurers are doing to scale their products
  5. How to successfully manage back-office digital transformation

Chapters 3-5 will be presented in Part II and Part III of our Asia-Pacific Profile; and, if you don't want to wait, then simply access everything straight away by downloading the full Trend Map here ...

Get your full copy of the Insurance Nexus Global Trend Map, free of charge, straight away!


1. Asia-Pacific: Large Pie, Many Forks

We begin with a high-level characterisation of the APAC market, which is very different from the others we present in the course of this series (EuropeNorth America, LatAm, the Middle East, Africa and Central Asia). 

First and foremost, we must emphasise its sheer size and diversity: we are considering an arc from Pakistan in the West to Japan in the East, incorporating on its way all of Australasia and taking us to a total population well in excess of 4 billion people, many of whom find themselves in high-growth emerging markets. As Singapore-based Steve Tunstall, CEO of commercial-line Insurtech Inzsure, aptly summarises:

‘You’re talking about a region with more than half the world’s population now, you’re also talking about a region with probably three quarters of the world’s GDP growth for the next 50 years… North America and Europe are probably going to stay pretty flat, and Asia is going to go gangbusters between 3 and 6%. So in terms of growth, all the opportunities are here. In terms of technology penetration, some of the countries here are already world-leading.’

This growth (made up of both new and existing business) will fundamentally be driven by two things: the continued development of an already burgeoning middle class and hundreds of millions of people coming onto the insurance radar for the first time. By comparison, the West is relatively saturated from an insurance perspective – penetration is higher and the underlying wealth of those with policies is not drastically changing, nor is it projected to change a huge amount over the coming decades. 

Multinational insurers are looking to Asia-Pacific to be the key engine for growth in their global business ...

Multinational insurers are therefore looking to Asia-Pacific to be the key engine for growth in their global business, and they are seeking to achieve this by providing more value to customers for less cost and by boosting policy distribution; insurers don’t just need affordable, value-adding products to sell, they need a low-cost way to get them in front of potential customers without destroying their margins.

"The biggest challenge for Asia is the riskaverse mindset of people, who really need to adopt faster, and be more dynamic and agile in delivering solutions. This impacts the ability to deliver flexible changes in Asia at a reasonable pace."

Ash Shah, Regional CIO and Chief of Staff Property and Casualty at AXA Asia

A large prize necessarily invites takers, and the APAC insurance market is no exception. We already noted the prominence of the ‘Increased competition’ challenge above ... Furthermore, of our three key regions, Asia-Pacific had the greatest number of insurers indicating lost market share (a stat we termed our ‘disruption score’ in our Insurtech Perspectives post).

See also: Insurance Nexus Global Trend Map #18 Europe Part II

This eroding market share reflects both the rapidly growing APAC market – you must grow just to stay the same in terms of market share – as well as the disruptive approach of non-traditional entrants who are challenging the traditional insurer-customer relationship. Indeed, we have characterised Asia-Pacific as the most disrupted of our three key regions, something we explore in greater detail below, and which we also touched on in our dedicated profiles on Europe and North America.

See also: Insurance Nexus Global Trend Map #21 North America Part III

"Through innovation and use of AI and machine learning, startups are already challenging the leaders on the low levels of trust and satisfaction of their clients. Incumbents have to follow the trend, by building partnerships, with these startups for instance."

Minh Q Tran, formerly General Partner at AXA Strategic Ventures

In addition to its enormous size and growth potential, another key characteristic of the APAC market is the variation between the different national markets it comprises, which is perhaps greater than what exists in any other global region, and this is often as cultural as it is economic.

‘Individual markets over here are at very different stages of development,’ comments Tunstall. ‘HK, Singapore, Japan, Taiwan and Korea lead the world in technology penetration — HK has the highest penetration of smart phones in the world. But if you go to Indonesia, a lot of China in the West, Vietnam, Cambodia, Thailand, large parts of Malaysia, and certainly when you get as far across as India... The technology is penetrating through but whether the population would ever buy insurance is another matter entirely.’

The peculiar dynamic of the Asia-Pacific market – where, crudely put, insurers are attempting to meet the needs of both new customers in underdeveloped markets and existing customers in developed ones – is reflected in the lower focus we found in the region on customer loyalty, relative to more saturated, stable markets like North America (see our earlier post on Marketing and Customer-Centricity).

Product diversification on the other hand is a key component of chasing new customers, and we see this accorded substantial importance by APAC (re)insurers, a large majority indicating that diversification informed their organisations’ growth strategies (see our earlier post on Product Development).

Get the full APAC profile by downloading your complimentary copy of the complete Insurance Nexus Global Trend Map here!


2. Fulfilling the Customer Covenant

As we have outlined, the market opportunity in Asia-Pacific consists firstly in the millions of current customers (typically in the emerging middle class), whose ties to traditional insurance models are perhaps not as strong as we find them in the West and who are therefore susceptible to the offers of new market entrants — and secondly in the millions of new customers, generally on low incomes, who have not had insurance before and whom existing business models may be totally incapable of addressing.

Insurance has for some time now been on the sleepier side of financial services, and insurers have perhaps taken their steady business for granted. However, this is changing fast with the advent of Insurtech and the entrance of dynamic new players into the insurance market.

For example, 2013 saw the formation of Alibaba-backed digital-only insurance firm Zhong An, which underwrote over 630 million policies and serviced over 150 million clients in its first year of business alone.

"If insurance works openly on data not to follow but to generate the wave there is a lot of opportunity out there. Pay-per-use has a lot of applications. Companies like Zhong An have a huge knowledge of the customer and are using all that intel to provide appropriate services and products. As a result, they’re growing every month. A lot of companies go online and open a shop but it’s just a version of the shop they have offline. The behaviour of customers in a marketplace for example, is very different."

Marco Buccigrossi, formerly Business Development Director at Mapfre

Such a sudden change of pace, with new entrants quick to recognise and exploit what makes today’s consumers tick, regardless of which market category they are in, makes it more important than ever for insurers to re-evaluate their relationship with the customer and the value proposition they are offering. However, Tunstall for one believes that the incumbent insurance market has been slow on the uptake and is still not putting together products that meet customer needs, in commercial and personal lines alike.

‘The big issue is that, if it’s not careful, the insurance sector is becoming less and less relevant,’ Tunstall elaborates. ‘10 years ago as a risk manager, you’d sit down with the CEO and work out what all the big risks were across the organisation, and perhaps as much as 20% of those risks would be insurable. That’s probably down to 15% or perhaps even 10%. The business world is moving incredibly fast and insurance isn’t.’

One key commercial area where insurers are failing is cyber protection, and given that commercial customers’ businesses are only going to move more online – and not less – this represents a considerable missed opportunity on the part of insurers.

‘They just don’t have the capability or the skill-set to produce things that customers want to buy, particularly with so-called cyber products that mostly don’t cover the specific risks that the clients are concerned about,’ explains Tunstall. ‘There’s a total disconnect there between the reality of business for all the Fortune 500 companies in the world and what insurers think they’re going to provide them by way of services and products.’

See also: Insurance Nexus Global Trend Map #12 Cybersecurity

This lack of readiness is reflected also, Tunstall believes, in the personal lines, where he foresees the rapid onward march of peer-to-peer (P2P) platforms. This is by no means to signal total doom and gloom for incumbents seeking to adapt to this huge customer-driven shift, which after all enfolds far more than just insurance. But it is clear that insurers, now more than ever, must work harder to ensure relevance to consumers.

Despite this, it does seem insurers in the region are heeding the message and waking up not just to the market threat but also to the sizable market opportunity. Across our stats, we see a veritable obsession with the customer in Asia-Pacific!

Access the full Regional Profile for Asia-Pacific here! ...

Let us quickly review the different ways that (re)insurers here are prioritising the customer:

  •  A greater proportion of APAC respondents indicated that they would be seeking third-party services relating to Customer-Centricity than was the case with Europe & North America (see also, Services, Investments and Job Roles)
  • When we look at new job roles being created within insurance organisations, Chief Customer Officer is particularly prominent in Asia-Pacific, standing out alongside Chief Digital Officer & Chief Information Security Officer (see Services, Investments and Job Roles)
  • Asia-Pacific leads on Digital Innovation as a priority area (over our other major regions), and comes second to Europe on Customer-Centricity by only 1 point (see our earlier Insurance Priorities Table)

As we pointed out in our Marketing and Customer-Centricity post, measures of customer priority and measures of customer performance stand in stark contrast to one another (respondents in all our regions highlighted the importance of the customer but expressed dissatisfaction in relation to current levels of customer-centricity).

Corresponding then to the higher prioritisation of the customer we found in Asia-Pacific are the deficiencies we detected in customer performance: while only a small minority of insurers globally reported that their customer experience was consistent across channels, Asia-Pacific trailed our other regions on this important performance measure (see our earlier post on Distribution).

See also: Insurance Nexus Global Trend Map #9: Distribution

With its current deficiencies but firm stated aims around the customer, it is clear that the insurance industry in Asia-Pacific is going somewhere – but it has not arrived yet. As their efforts prioritising the customer begin to bear fruit over the next 2-3 years, we expect the relatively negative self-assessment of APAC insurers regarding their customer performance (including their cross-channel consistency) to right itself. 

"Many APAC carriers are in the process of establishing transformation teams and incubators in order to fast-track customer-centric innovation both within, and without, their four walls. A good example of this is IAG’s recently announced Insurtech hub in Singapore (Finmark Labs)."

Mariana Dumont, Head of New Projects at Insurance Nexus

Throughout this content series (get the whole thing as one PDF here), we have tended to see in this combination of high customer priority and low customer performance the hallmark of market disruption; the more unwanted competition insurers face, the more forcefully they will prioritise customer-centricity initiatives.

In accordance with this, out of the three main regions that this Content Series explores in the greatest depth (Europe, North America, Asia-Pacific), we have tentatively characterised Asia-Pacific and Europe as the more disrupted markets on account of their strong prioritisation of the customer, leaving North America as a (relative) laggard.

Access all seven Regional Profiles straight away by downloading the full Trend Map here!

In our Regional Profile on Europe, we further categorised Europe as the longest-disrupted of our markets and Asia-Pacific as the most disrupted. By this we meant that the ‘wave’ of disruption is right now breaking over Asia-Pacific, having broken on Europe some short time ago. 

In support of this (and you can read more in our Europe profile), we pointed to Asia-Pacific’s trailing score for cross-channel consistency. In light of what we know more generally about disruption in Europe, the higher level of cross-channel consistency we found here could be interpreted as European insurers beginning to see some material fruit from omnichannel initiatives already being implemented.

Similarly, we noted that Chief Customer Officer was not a significant recent appointment in Europe and suggested that the issue was not so much with the significance of the role but with its recency, concluding that the first wave of appointments in this field had already passed.

"Carrier perceptions of market-share loss in Asia-Pacific may well adjust down over time, even as Insurtechs continue steadily to gain traction. While carriers may have 'priced in' the potential for a rout, new entrants still face numerous issues, scale and regulation being just two. It may be a couple of years before we have a mature assessment of where the market is headed."

Alexander Cherry, Head of Research and Content at Insurance Nexus

What all this means is that European (re)insurers have had time to take some small steps towards a 'new normal', or to at least adjust psychologically, while their APAC counterparts are at the point of maximum panic. This is reflected ultimately in the divergent ‘disruption scores’ for the two regions, first introduced in our post on Insurtech Perspectives: only a small minority of insurers in Europe (23%) reported losing market share to new entrants, while in APAC this figure rose all the way to 47%.

See also: Insurance Nexus Global Trend Map #2 Insurtech Perspectives

We emphasised at the end of our Europe Profile that the journey through disruption is not going to be linear, and it is near-certain that the material level of disruption will rise in all our markets. Also, different markets will likely move along different trajectories, so it will be interesting to see whether European (re)insurers retain their early-adopter in the face of the on-going transformation efforts of their counterparts in APAC.

In our next post, we continue our exploration of Insurance and Insurtech trends in Asia-Pacific, with more discussion from Steve TunstallJoão Neiva and David Piesse. Key discussion points will include:

Check out our earlier Regional Profiles on Europe and North America, and stay tuned for our forthcoming ones on LatAm, the Middle EastAfrica and Central Asia, which you can of course access straight away by downloading the full Trend Map (it's free!).

For any inquiries relating to the Insurance Nexus Global Trend Map, this on-going content series or next year's edition, please contact:

Alexander Cherry, Head of Research & Content at Insurance Nexus (



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