21-05-2021

The Insurtech Race Is on for Asian Insurers

Insurance Alertss
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21-05-2021
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The Insurtech Race Is on for Asian Insurers

Someone who was able to identify this growing shift from early on was Declan O’Neill, the Executive Vice President of Product and Data at Munich Re Automation Solutions. Having formerly held significant positions covering business analytics and software development, Declan offers an extensive insight into the complexities of Asia’s insurtech race.

Here he discusses the digitisation journey insurers in the region are on, why the adoption of services remains vital to their success, and how the incorporation of emerging technologies continues to shape the future of this extremely niche landscape.

Pioneers throughout time have opened the floodgates for new movements, eras, and even revolutions. When, in 1957 the Soviets successfully launched the first-ever satellite into space, they kicked off a space race that would just 12 years later see America put the first man on the moon. Today, countries from every continent are pushing further into the great unknown to take space exploration to new heights, showing that once a revolution is ignited, the speed at which it develops is exponential.

Life insurance in Asia finds itself in a similar situation. What started with simple automation of paper-based process – that is, making what was already possible more efficient – has snowballed into exciting new innovations making the impossible possible by leveraging previously untouched treasure troves of data and implementing advanced analytics.

The space race is well and truly on for insurers, who are racing for technological superiority both locally and worldwide. Historically, insurance has been the most conventional in the financial services sector, but the last ten years have been a rollercoaster ride as the industry rushes to not just catch up with, but overtake the fintech wave. Today, the trend towards digitisation of services is accelerating faster than in many other sectors, with insurers of all sizes trying to join the insurtech race.

The newest generation of insurtech – what we call the ‘5th generation’ – has introduced predictive modelling to break through traditional barriers and vastly improve speed-to-decision. There are now demonstrable examples that have produced significant improvements in the straight-through acceptance rate for Asian insurers, and importantly, with quantified and minimal increase in risk. These AI models automate unnecessary referrals in real-time.

Taking this to the next level means developing a predictive model, and implementing it so that when someone applies for insurance with a client, an AI-enabled engine will make the decision about that person’s risk. This frictionless, straight-through-processing will see dramatic improvements in efficiency, accuracy, customer experience, lead conversion rates, product development and prospect targeting.

Yet while leveraging existing and third-party data for predictive modelling might seem like an obvious choice, it’s not necessarily for the faint-hearted insurer. There’s still an element of fear in Asia around the Cloud and cross-border data sharing. It requires an understanding of data governance, underwriting teams with enhanced skills in data analysis, and an insurtech partner that is able to navigate the complex, ever-evolving web of regional data privacy legislation.

It is also important to recognise that digitalisation is not a one-time investment, it’s a journey. Any insurtech partner must provide a technology and workflow roadmap that helps insurers navigate and absorb the risks of data sharing and leverage the benefits, so that when new AI and digital solutions arise that use customer images, video and behavioural data, they’re ready and confident to make the most of them. For companies that don’t shy away from innovation, the investment of money and data will be worth it many times over, as they’ll be able to progress in the insurtech race much quicker and more sustainably than their competitors.

With new innovations arising all the time, the Asian insurtech race is anyone’s to be won. Covid-19 has starkly highlighted those who are pulling ahead and demonstrated why it’s important to digitise sooner rather than later. With the unknown always around the corner, the ability to operate flexibly is more important than ever. The next decade will see insurtech continue to revolutionise not just how the insurance industry functions, but how it is perceived. Those caught resting on their laurels in the space race of insurtech will soon find themselves falling painfully back to earth.

Source: The fintech times