The inevitable disruption by insurtech may be more profound in emerging Asia than in the rest of the world.
Asia is one of the most underpenetrated insurance markets in the world. In 2016 emerging Asia held 43 percent of the world’s population but only 13 percent of total premiums.
Traditional distribution models are costly and inefficient in emerging Asia due to its large populations and its extreme geographic contrasts.
Technology Leap is Here
Connected devices, advanced data analytics, artificial intelligence (AI), and digital distribution channels should all result in accelerated market penetration.
Technology will also provide more accurate risk assessment and pricing, more personalized solutions, more efficient operations and processes, and most importantly, improved customer experience and satisfaction.
Savings and Profits
The Swiss bank in its report «Insurtech Shifting Asia» believes insurtech could spur total cost savings of around $300 billion a year for the Asian insurance industry by 2025.
Competitive pressures should drive insurers to pass on a majority of the cost savings to customers, however UBS still expects the overall profits of Asian insurers to increase by around $55 billion a year.
Pressure on Jobs
Competition in Asia’s insurance industry will likely intensify as customers demand greater transparency and convenience, more tailored products, easier claims processes and better customer services.
As with many technological advances, insurtech could put jobs at risk, UBS estimates 1.5 million in the Asian insurance industry in the medium term, primarily in the operations and administrative support areas.
As digital distribution becomes more prevalent in emerging Asia agency forces will gradually shrink.
End User Wins
Customers will be the biggest winners of insurtech, benefiting from better services, greater convenience, cheaper premiums and more personalized solutions.
Insurers will gain not only greater cost savings but also enhanced perception and reputation.
Incumbent insurers slow to adapt to digital transformation could see rapid market share erosion.
Incentive-based Products
As these products become more prevalent, leading to positive shifts in customer behaviour, lifestyle changes could potentially occur en-masse and have far reaching implications.
Even marginal changes in the prevalence of fire and car accidents, healthcare costs and employee productivity will yield immense benefit to society.
