Digital P&C market in Southeast Asia could reach $7.5bn in 5 years

Swiss Re Institute research projects the digital property/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.

That was one of the findings of a survey by Swiss Re Institute undertaken across South and Southeast Asia to understand attitudes towards buying personal lines insurance (home, personal accident and employment) online.

The first research of its kind, Digital adoption in personal P&C insurance in South and Southeast Asia estimates the digital P&C personal lines market could reach a cumulative $7.5 billion in premiums over the next five years, highlighting a unique opportunity for insurers.

South and Southeast Asia has seen its number of digital consumers grow exponentially over the past few years; a trend 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. To capture this opportunity, understanding consumer preferences will be key to help P&C insurers expand their reach through digital distribution channels, the report suggests.

Its 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.

Victor Kuk (pictured), head P&C Reinsurance SID, Swiss Re, said: “The first step for insurers looking to extend their digital reach is to foster greater trust and familiarity with digital insurance offerings among customers. Insurance is about trust, and digital insurance is no different. 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, Swiss Re, added: "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, iptiQ Asia Pacific, added: “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."

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