Technology high on the agenda for south-east Asia
Various countries in south-east Asia are taking steps to facilitate insurtech business, following the route of Singapore and easing regulation to allow more innovation, Athistha Chitranukroh, partner in law firm Tilleke & Gibbins’ corporate and commercial group, told SIRC Today.
“We see a lot more insurtech, fintech and tech players, who are playing a more significant part in the insurance industry,” Chitranukroh said.
Singapore is the leader in this region in terms of the number of new insurtech and fintech startups, followed by Vietnam, she noted.
In Thailand earlier this year, the Thai Office of Insurance Commission set up the Center of Insurtech Thailand to promote the use of technology in the insurance industry, and to help promote collaboration between insurers and tech startups.
Vietnam will follow the route of Thailand and Singapore later this year by establishing a regulatory ‘sandbox’—a mechanism for developing regulations that can keep up with the speed of innovation.
In August 2017, Cambodia welcomed its first fintech association launched in the country, which also covers insurtech.
Chitranukroh said that for the past 12 months, a number of regulators have adopted the concept of a risk-based approach as opposed to a rule-based one.
“This is because there is awareness that one set of regulations does not fit all the players in the country. Regulatory sandboxes in Singapore and Thailand, and the upcoming one are good examples,” she explained.
Instead of insurers buying new technology or distribution channels, Chitranukroh sees a number of insurers investing in potential startups, and setting challenges for insurtechs in order to choose the right technology for them.
She also noted there is greater collaboration between Asian tech companies and local insurers.
“We are starting to see more involvement of Alibaba, LINE, Grab and Go-Jek in the insurance industry particularly for jurisdictions that would need tech transfer to make the market more tech-sophisticated, for example Cambodia,” said Chitranukroh.
Against the backdrop of a more digitised region, there have been an increasing number of cyber breach incidents. Singapore suffered its largest breach last year when the government health database was hacked, and two of Thailand’s major banks were hacked, with the data of hundreds of thousands of consumers compromised.
“Businesses in this region are in need of cyber production, and local insurers need to be able to underwrite these risks appropriately,” Chitranukroh concluded.
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