Significantly increased and timely investment in technology is critical for insurers to further grow their business in Asia Pacific, according to a new study.
The study – Platforms for Growth: Technology Innovations in the Insurance Business – was produced by State Street Corporation and based on a global survey of more than 300 insurance executives.
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It found that targeting new customer segments in existing markets is the top strategic priority for more than 30 percent of respondents in Asia-Pacific, (APAC) followed by strengthening distribution models (20 percent), enhancing product offerings (10 percent), entering new geographic markets (10 percent) and optimising investment portfolio returns (10 percent).
The report said to meet that demand and access new customer segments, APAC insurers are investing in customer relationship management systems (52 percent), digital distribution and customer servicing channels, including mobile platforms (42 percent) and tools to strengthen risk management (43 percent).
However, only 36 percent of APAC respondents believe there is complete alignment between their technology strategy and the top strategic priority of their business. Often this is due to the burden of legacy systems which silo data, a major impediment to digital transformation, said the study.
Richard Fogarty, senior vice president and head of Insurance Sector Solutions for Asia Pacific, noted: "Although distribution channels are vastly diversified across the region, giving customers an individualised and consistent experience must remain a core focus.
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By GlobalData"Eighty-four percent of those interviewed in APAC said that investment in technology would be driven by changing customer demands. Accessing new customer segments will require fresh insights from data, which can only be mined if you have the right systems."
Fogarty added: "Failure to fully align IT and the business will weaken insurers’ ability to counter the threats already coming from nimble technology-and data-savvy rivals."
"New market entrants are eying the sector, especially as increasingly mobile and tech-savvy customers become more knowledgeable about products and want to transact on the internet."
A total of 36% percent of respondents to the survey were from Europe, the Middle East and Africa. Some 34 percent were from the Americas and 30 percent were from APAC. A total of 82% of respondents represent firms having US$1 billion or more in annual revenue.
