With the great rise in business development and industrial growth in Asia, asset values are generally enabling insurers to pay higher premium for increased protection levels. Not that the risk is higher but people have been slowly realizing the importance of private insurance. Life and non-life insurance have high number of patrons across the continent with the highest of mobile insurance policies provided in Jakarta, Indonesia and Bangkok, Thailand; life insurance in Singapore and health insurance in Seoul, South Korea and Vietnam.
Review of this past 6 months activity shows that regional gross domestic product (GDP) growth is projected to remain solid at 5.4%-5.5% this year and rebound to 5.5% – 5.8% in 2015. Inflation is also expected to remain benign across much of the region, except in India and Indonesia, where monetary policy will remain tight to fend off inflationary pressures.
For the next 6 months remaining of 2015, major developing countries are expected to grow by 5% more. Consequently, the region’s continuing appeal to foreign insurers seeking growth opportunities remains strong.
The opportunity to offer private health insurance in Asia is also expanding, due to rising individual income levels and government budget constraints. In China, the health insurance market is growing strongly as consumers turn to the private sector to fill in the gaps left by inadequate government schemes while everyone waits for the success of Indonesia’s own insurance scheme. India is another promising market for personal health insurance; only 15% of the population is covered by government health insurance and 2.2% by private health insurance.
In this evolving environment, insurance has also expanded to dominate online sources and this method has slowly been integrated to all operations in Asia. However, it would take time for Asians to adapt as there are also a lot of cyber insurance scams which pose as threat to insurer’s data and privacy. Insurers in Asia will need to consider the following adjustments to their service, products and compliance efforts in 2015:
- Streamline the value chain via the cloud and traditional business process outsourcing (BPO)
- Expand products and services to address the growing needs of the high-net-worth (HNW) market
- Adapt product strategies to the changing regulatory environment
- Increase compliance to respond to growing sales and consumer protection regulations
- Develop capital and Merger and Acquisition (M&A) opportunities
- Reposition investment strategies
- Enhance data controls and metrics