Insurance executives operating in the ASEAN markets are adopting a tempered approach to digitisation, according to a study by Malaysian Reinsurance Bhd (Malaysian Re) and Dr Schanz, Alms & Company.
The ASEAN Insurance Pulse 2019 found that the surveyed insurance leaders expect digital technologies to have a modestly positive impact on their premium growth in the next two to three years. Only in the longer term is a more sizable contribution to growth being anticipated, the study said.
Against this background, most ASEAN insurers concentrate on digitising their existing value chains, investing about 1% to 2% of their overall revenues into digital initiatives.
Executives spot quick wins in digitising their distribution and marketing processes as personal lines products exhibit a higher transactional frequency and standardisation than commercial
lines, the survey found. Fundamentally, the ASEAN insurance markets continue to profit from the region’s strong economic growth momentum. Driven by technology-savvy populations with low median ages, insurers are seen to benefit from the region’s growing middle classes and their appetite for personal lines products.
“ASEAN insurers are faced with a dilemma,” said Zainudin Ishak, president and CEO of Malaysian Re. “Our consumers’ behaviour is increasingly shaped by digital technology. They expect immediate transactions, access to transparent information and instant gratifications. The increasing sophistication of their purchasing behaviour presents opportunities for insurers as product offerings can be efficiently customised and scaled up. While digitisation will boost revenues and reduce costs, the region’s insurers need to upgrade their legacy systems and improve their access to data to transition to the sophisticated technologies essential to sustain their long-term competitiveness.”
