Emerging Asian markets embracing insurtech faster than developed peers
Insurers in emerging markets - such as China and other Asian markets - are introducing innovative insurtech solutions at a faster rate than those in more developed markets, according to a Willis Towers Watson study.
The study suggested that advances in insurtech are making it easier, quicker and cheaper for insurers in these markets to accurately assess customer behaviour, needs and risks, thereby opening the door to new business models.
For example, there are new insurance products being introduced to meet demand for coverage on risks associated with China's 'booming' e-commerce sector.
Free-return insurance helps retailers to increase sales by providing additional security to consumer via free shipping for product returns. The study noted that some even allow buyers with good credit to receive refunds immediately, showing how data can transfer to credit, build trust, innovate insurance models and facilitate business.
Willis Towers Watson also said that new technology-based entrants to the insurance market can now compete with traditional players by offering a greater range of products from a variety of carriers to a larger target market than insurers distributing traditional products through captive agency and bancassurance channels.
Furthermore, it is suggested that tech giants with big data capabilities are playing a growing role in developing the insurance value chain.
Yunfeng Financial's acquisition of MassMutual Asia and Tencent's purchase of Aviva Hong Kong are examples of these tech giants partnering with multinational insurers to leverage their insurance and risk management capabilities.
“Existing products in China are highly commoditised with limited variation. The market is dominated by leading insurers that have minimal incentive to innovate. Technology advancements now enable smaller players to compete with established ones by offering all kinds of new products through new distribution models,” said Selina Hu, executive director at Willis Towers Watson Securities. “Technology development has also enabled entrants outside of the insurance industry. As Internet giants join the sector, the market has become more diversified and efficient.”
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