The total transaction volume of InsurTech M&As in Asia hit US$460 million in 2017, more than three times that of 2016, as industry incumbents and new entrants to the market pushed towards greater digitalisation, according to the fourth Quarterly InsurTech Briefing from Willis Towers Watson, a leading global advisory, broking and solutions company.
The new research, produced by Willis Towers Watson Securities and Willis Re, in collaboration with CB Insights, shows that InsurTech transactions continued to focus on capabilities related to digital distribution, consumer models and data analytics, while claims management and other back-end processing applications also became top business priorities, as insurers and reinsurers seek to enhance efficiency and engagement throughout the value chain.
China and India, home to much of the innovation in InsurTech, accounted for a significant 73% of transactions in 2017. Hong Kong, Singapore and other Asia markets continued to build on the momentum from 2016 and accounted for 27% of the transactions, representing a much more conspicuous contribution than in 2015 when they only amounted to 4% of the regional sum.
“As companies seek InsurTech transactions to tap new technologies, they are looking mostly to Asia, and in particular to Hong Kong and Singapore, amid low growth and even lower interest rates in the US and European economies,” Mr Kevin Angelini, Head of Strategy for the Insurance Consulting and Technology business in Asia Pacific at Willis Towers Watson, said.
“Hong Kong and Singapore have well-regulated free markets, mature insurance customers, and access to international capital markets. These make it easier for investors to integrate resources.”
An example is online insurer Singapore Life, which received a capital injection from China Credit during 2017. Singapore Life is the first local independent life insurance company in Singapore to be granted a licence since 1970. Singapore Life markets life products directly through a state-of-the-art digital underwriting engine licensed from UnderwriteMe. It announced the acquisition of Zurich Life’s Singapore run-off business in January 2018.