The insurance industry in the East is heating up. Multinational insurers and successful insurtechs from around the world have their attention trained on APAC as countries across the region see significant projected growth in the years to come.
While much of the focus is trained on China, which is expected to surpass the US as the largest insurance market in the world by the mid-2030’s, there’s plenty happening in other areas of the market as well.
Big trends in the APAC insurance market
Right now, there are a number of market trends that are cropping up around the APAC region. These will be key areas of consideration for any insurtech or insurer looking to expand into or increase their activity in these markets.
Numerous markets are experiencing significant growth
While China is an obvious market to watch, markets like Indonesia, Malaysia, and Vietnam are all following this trend and expecting rapid growth and industry development over the next few years. In these and other mature markets, like Japan and Australia, there’s also a significant hunger for insurtech and digital solutions.
Digital solutions are helping insurers connect to more potential customers
The rapidly changing, and aging, populations across APAC, particularly in Asia, are increasing the need for new, comprehensive insurance products. Digital insurance products and platforms are helping insurers reach more customers, especially those who are new to insurance. This is also true when it comes to different kinds of insurance, including small-item, travel, renters, and more.
APAC markets are opening up to foreign insurers in a way they haven’t in the past
This is true in markets like China, where EY notes the financial supervisory authorities are continuing to promote the opening of the insurance sectors to foreign insurers. There are also new markets, like Myanmar, that just last year opened up to foreign insurers for the first time ever.
The number of networking and industry events in the region is increasing
While Eastern and Western industry professionals become more open to finding new ways to collaborate and exchange ideas, the number of opportunities they have to meet is increasing. Large insurance and insurtech events, some of which originated in the US and Europe, are popping up across the APAC region, affording insurers, insurtechs, VCs, professionals and consultants even more chances to meet, discuss ideas and solutions, and work collaboratively to push the global insurance industry forwards.
Increased collaboration means a better insurance industry for everyone
This opening up and growth that APAC countries are experiencing, both in terms of insurance and insurtech, has meaningful and positive implications for the industry. As industry, market, competitor, and customer data becomes more fluid and readily available across large insurance companies, insurers can adopt technological solutions with increasing ease. Developing more robust communications and collaboration between insurers around the world can help the global insurance industry develop more cohesively and productively in the years to come.
As a global industry, insurers have many questions to answer right now:
- How do insurers respond to and prepare for an increasingly volatile climate, particularly in high-risk areas?
- How do insurers in countries like China and Japan respond to the needs of a large, aging population as well as the new needs of millennial customers?
- How can insurers make the most of their data in order to become more agile and responsive while simultaneously keeping their data secure?
- How do insurers respond to new threats to corporate clients, like cyber security, climate risks, or event pandemic risks (like the spread of coronavirus)?
- How do insurers adapt their products, in terms of pricing, development, and distribution, to fit the needs of a different generation of customers?
These are just a few of the big questions facing the global insurance industry today. With increased collaboration and interaction between Eastern and Western insurers, in addition to partnerships with insurtechs, the industry has a better chance of moving forwards and finding answers to some of those questions.
Preparing to enter an APAC market
“Asia is the place to be [for insurers],” says Jerome Haegeli, Swiss Re Group’s chief economist. “The region and its engine of growth are driving different sectors of the industry.”
Depending on your company’s profile, as well as which APAC market(s) you’re looking to enter, these are a couple of things to consider:
- It’s vital to understand the market that you’re entering very well. There are a wide variety of variables affecting each different market and it’s important to consider this before entering.
- APAC markets, particularly Asian markets, have different preferences when it comes to products, agents, platforms, distribution methods, etc. This is particularly true when it comes to digital.
- It is all about the customer, as with every other market, so understanding what customers want in these markets is always the key to success.
- Finding your place in the market alongside domestic insurers is important, especially in markets like China, where domestic interests and businesses are staunchly protected.
- Business cultures and customers, particularly in markets like China and Japan, can vary dramatically than those in Western markets. It’s important to understand these nuances before entering into business deals and partnerships in order for there to be mutually beneficial communication, strategy, and approach going forwards.
“Chances are the relationship building process [in markets like Hong Kong and Japan] will take a good deal more time than one might be used to markets like the US, UK, or even in some APAC markets, like Australia,” explains Geoff Keast, Co-CEO of NZ-based insurtech Montoux.
Given all of these things to consider, there are a number of steps companies can take to improve their approach to the APAC region’s various markets:
- Speak with companies and professionals in the market and conduct market research to ensure there is a valid business case for your product in that market.
- Partner with domestic insurers and companies in order to gain a better understanding of how your unique product and value proposition will resonate with businesses and customers in that market.
- Participate in events, contribute to publications, or invest in thought leadership that’s geared towards relevant trends and topics in the market.
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