Asia is ahead of game in use of open architecture platforms for insurtech
The development of collaborative open architecture platforms in the insurtech space has the potential to offer insurers huge growth—and the maturity of this concept is ahead of the game in Asia, Paul Mang, global CEO of analytics at Aon and Aon Benfield, told SIRC Today.
Mang believes that the development of technology with the potential to revolutionise the insurance industry is occurring more quickly in parts of Asia than in many more developed economies.
This is due to a number of factors including a more digitised economy compared with other regions, an abundance of capital willing to invest in this space and a willingness on the part of regulators to support and the development of new technologies.
“Technology is developing quite rapidly here in Asia in the insurtech space,” Mang said. “Part of this is down to the injection of capital and the fact that existing models are very digitised in this region already. This has fostered more energy in the risk space.”
Mang explained that some of the regulatory regimes in Asia-Pacific have been very supportive and flexible in supporting new developments. He noted that open architecture platforms exist everywhere, but Asia has generally developed at a faster rate.
Some of the examples he cited were Alibaba, which started as an e-commerce platform and is now developing financial services risk-type products; and Ping An, a traditional risk-bearing entity in China which has moved on to leveraging digital platforms.
“The concept of platforms are very well developed here, I think for the insurance industry, “We can learn from these models; they are big emerging areas for growth.” he said.
He believes that as an industry, developing these collaborative and co-development opportunities represents the next big step forward; he sees it as one of the most important technological developments, even in comparison to blockchain.
“The big term now is ‘sandbox’, which we are seeing in Australia, here in Singapore and also China,” he said.
A regulatory sandbox refers to an environment created with the supervision of regulators that provides firms with reduced time-to-market at potentially lower costs but with appropriate consumer protection safeguards built in to new products and services. In essence it represents regulatory relief granted in a controlled environment to provide a proof of concept.
“The combination of digital platforms that have permeated through from other industries, the capital available here, and the regulatory stance is leading to very interesting developments,” Mang said.
He went on to say that Aon is using open architecture innovation to help develop platforms with its partners. These platforms enable scalable solutions for clients and offer flexibility that encourages entrepreneurial innovation.
Some of the areas where Mang sees insurtech having a big impact include through gains in efficiencies; shortening or collapsing the value chain in some sectors; and through the developing new technology that in turn is creating new types of uncertainty or emerging risk.
He also cites the development of new business models—such as the on-demand economy—that create different types of risk, along with the emergence of more seamless transactions that also generate new business interruption risks.
“As an industry we can create new products to address that,” he said.
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