There are still multiple "pots of gold" to be found in Asia, according to a panel of insurers and reinsurers at the 18th Asia CEO Insurance Summit.
One such pot is the age protection gap, and the challenge of insuring the “100-year life”, said Mr Victor Kuk, Head, Client Markets Southeast Asia, India, Korea, Hong Kong and Taiwan P&C reinsurance Asia, Swiss Re. He was sanguine about the region as a whole, with a third of the reinsurer’s business coming from Asia, and it expects 50% of future growth in the next decade to be from Asia too.
South Korea is an example of an ageing society. While everyone sees its life insurance market as saturated and mature, people also look for new ways and products to manage living risks, said Ms Kumjoo Huh, Managing Director of Kyobo Life Insurance. Other opportunities lie in new products for the growing number of one-person households, and the growing insurance assets placed by Korean households.
Having observed meaningful growth in Japan, a similarly ageing market, Mr Ken Mohan, Executive Officer & Vice President, head of Distribution Strategy Administration & Direct/Digital business, MetLife Japan, said that there is a pension gap. That is challenging in a low interest rates environment, but launching forex solutions and campaigning for young people to change their savings habit, in order to change their retirement outlook, have helped. He added that products which “unbundle risks” like savings (from protection) will help customers.
“If we know how to service the middle class in a modern way, so that they buy and trust insurance, that’s the biggest pot of gold,” said Peak Re CEO Franz-Josef Hahn. In highlighting this underserved APAC segment, he referred not just to the ageing and mature markets but the young, educated and still underinsured middle class in Indonesia, Philippines, Malaysia and Thailand.
Besides the life sector, there is also under-penetration in P&C and legal and regulatory changes which drive the industry to support them, he said. And pointing out the major CAT events last year, Mr Kuk noted that Nat CATs and climate change provide opportunities for the industry to offer products at the right price points. Regional developments like the Belt and Road Initiative and ASEAN Economic Community also provide opportunities in infrastructure building and financing.
Getting to the pots of gold lie not just in the right products, but how customers are served. “What we’re looking at is really the frictionless experience for the customer… whoever can provide that is going to be the disruptor and win the pot of gold,” said Mr Alex Kimura, Chief Strategy Officer, Aviva Asia. “It may not be insurers today, it may be technology firms, or any firms which provide that experience,” he said, citing Google and Amazon as examples.
He added that the real strategy is not one size fits all, but getting to a micro level understanding of the customer. This requires data, and often working with ecosystem partners to get this data.
Technology is a tool which not only brings efficiency; focusing artificial intelligence and data analytics can help in the dimension of predictability, which will help clients and consumers manage risk better, said Mr Kuk.
Other factors the speakers discussed to reach those pots of gold are the use automation, mobile platforms, clean data warehousing, web-based platforms, and the use of blockchain.
Mr Mohan said the importance was to remain continuously relevant to customers, whatever major disruptions faced: “As their behaviour changes, as the mechanism to access them changes…the pot of gold is going to be there, it’s whether you are going to be able to serve your customers in a way that makes sense to them.”
The panel discussion was moderated by Mr Jose Ribeiro, Managing Director, A.M. Best Asia-Pacific Ltd.