The growing use of e-commerce and digital wallet apps in emerging markets such as India, Indonesia and Malaysia represents an opportunity for re/insurers to make progress in closing protection gaps, Swiss Re says.
A new survey by the Swiss Re Institute found that supportive government policies and a COVID-enforced spike in digital activity have increasingly pushed consumers online this year, with 68% of respondents in these three countries using digital platforms at least once per week.
Of the 1,800 respondents to the survey, an average of 70% expressed interest in using online channels to purchase insurance.
Among the different types of digital platforms, consumers in India and Indonesia showed a stronger preference towards purchasing insurance through digital wallet platforms, such as Google Pay in India, OVO in Indonesia, while Malaysians prefer to purchase from bank or insurer websites or apps.
“Health and safety measures intended for curbing the spread of COVID-19 have now driven a clear paradigm shift towards digitalisation in the post-virus era,” said Marianne Gilchrist, Managing Director, Head of Globals and Life & Health South Asia, Swiss Re.
“With an increasing number of digital platforms extending their business reach into financial services, insurers need to adapt their business models to become more relevant and responsive to the latest customer needs.”
Based on the survey results, Swiss Re contends that partnering and working with digital platforms and ecosystems will give insurers access to millions of consumers that are often under-protected, especially in markets across Southeast Asia.
In particular, the reinsurer noted potential benefits in life and health insurance, which could leverage data from platforms such as health tracking apps.
Meanwhile, digital platforms could benefit from business diversification and stronger customer loyalty by offering financial services online.
“In 2021, it will be a priority for insurers to carefully calibrate their digital strategies to capitalise on the opportunities offered by digital platforms. Leveraging Swiss Re’s underwriting expertise and risk management experience, insurers and platform partners can not only learn but also apply their consumer insights to enable more customers to narrow their protection gaps,” Gilchrist.