It is “a very good time” for insurance businesses to expand across Asia as “fruitful opportunities” await those across the market, a regional leader has said.
Scott Guse, Asia Pacific Insurance accounting leader at
KPMG, told
Insurance Business that consumers and clients have caught up with the market and new opportunities exist throughout the region.
“The opportunities are more fruitful for other companies to enter the Asian markets because they can deploy their IP with a lot more success than they have in the past,” Guse said.
“Many companies thought of it as a golden opportunity 10 or 15 years ago and got burned. There were a lot more failures than successes in terms of venturing to Asia.”
Guse suggested this may have been due to foreign insurers believing their model could be easily duplicated in these new markets, but they failed to factor in cultural differences and various other factors.
Now, 10 years on, he feels Asia has developed and evolved both from a demographic, sociographic and technological perspective. “The technologies that insurance companies use in the United States, and Europe and Australia are today more along the lines of digitalisation that will work in Asian countries,” he said.
With international firms such as
Swiss Re recently increasing their footprint in the region, alongside the expansion of Chinese and Japanese insurers throughout the region, Guse backed joint ventures or M&As as the best avenues to growth across the region as some areas of the industry are “a minefield” in terms of regulation and legislation, making organic growth hard to come by.
With certain territories throughout Asia implementing regulation that limits the ownership of foreign companies in the insurance industry at 24% or 49%, Guse said that those looking outside of their home country will need to weigh up their options before taking a leap.
“There is no easy answer as to where you should start, it depends on what your strategy is,” Guse continued.
“If you want to say you are a global player and want a foothold in Asia, then Singapore is a good place to start because it has good rules and regulation. However, if you want massive growth opportunities you are going to have to go for those countries that have the biggest population.”
Guse referenced China, India and South Korea as markets to keep in mind for foreign expansion as Singapore remains the “safest” market but also the “most competitive.”
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