New research by Swiss Re Institute projects that the digital property and casualty (P&C) personal lines market could reach a cumulative $7.5 billion in premiums over the next five years in South and Southeast Asia.
Survey results on attitude to buying personal lines insurance in these regions highlighted a unique opportunity for insurers, Swiss Re says.
South and Southeast Asia has seen its number of digital consumers grow exponentially over the past few years, and this a trend has been accelerated by the COVID-19 pandemic.
Low digital P&C personal lines market penetration estimated at 1-2% in the region shows strong growth potential, but to capture this opportunity via digital distribution channels P&C insurers need to better understand consumer preferences, analysts said.
Swiss Re’s findings show that across all markets, resistance towards buying insurance online stems from a lack of an individual or agent to help explain what is perceived to be complicated policy wording and to offer guidance through the claims process.
Nevertheless, 40% of consumers would prefer to buy personal lines insurance online, with India topping the list of markets ready to embrace digitalisation.
“The first step for insurers looking to extend their digital reach is to foster greater trust and familiarity with digital insurance offerings among customers,” said Victor Kuk, Head P&C Reinsurance SID at Swiss Re.
“Insurance is about trust, and digital insurance is no different,” he added. “To encourage consumers to make the switch to digital channels when purchasing P&C cover, the industry must first focus on developing simple, modular products and streamlining digital onboarding processes to strengthen consumer trust and confidence.”
Grace Li, Team Lead Innovation at Swiss Re, also commented: “Consumers’ evolving preferences provide useful information on how insurers can expand their existing risk pools and break into new ones. Social behaviours are evolving and as a result we see opportunities to tailor new and more flexible solutions to meet evolving needs – for example additional protection for consumers’ increasingly online transactions.”
Raquel Gonzalez, Chief Marketing Officer at iptiQ Asia Pacific, further stated: “Today’s consumers demand flexibility, simplicity, relativity, and the ability to be in control. Digitalisation unlocks solutions and opens potential to meet evolving consumer needs and accelerate adoption of insurance. However, the promise of digital can only be achieved by building digital trust.”
“The onus is on insurance leaders to innovate and uphold a culture of integrity and customer centricity, with a commitment to providing trusted platforms and solutions that address genuine concerns.”
