Covid-19 accelerates digitalisation in insurance
An accelerated pace of digitalisation in the financial sector across the Asia-Pacific (APAC) region due to the pandemic is expected to support the growth of online life bancassurance
GlobalData’s latest report, Global Bancassurance Market to 2025 – Analysing Key Performance Indicators, Key Trends, Drivers and Challenges, and Competitive Landscape, reveals that in APAC, prolonged period of low interest rates aggravated by lacklustre credit growth due to the pandemic highlighted the need for banks to diversify their revenue options.
As a result, banks and insurers are leveraging technologies such as artificial intelligence, robotic process automation, open finance and blockchain to understand customers preference and provide personalized solutions in real-time.
Consequently, the digital accessibility of insurance services gained traction as social distancing norms restricted functioning of traditional distribution channels like brokers and agents, which was mostly face-to-face.
Intensified competition due to aggregators
Deblina Mitra, Senior Insurance Analyst at GlobalData, commented: “Traditionally, agencies and brokers account for the largest distribution share in APAC insurance. In China, agencies’ share in life insurance new business DWP was 63.6 per cent in 2020 while in Taiwan, Hong Kong and Singapore, it was above 30 per cent.”
The emergence of aggregators and cross-selling platforms have intensified competition causing loss of business to banks.
Mitra concluded: “Digitalisation in the insurance value chain to improve operational efficiencies gained momentum during the last five years. This, in turn, has provided an impetus to the online bancassurance sales.”