Macau positions itself as an innovation hub

The Macau insurance market is experiencing a period of dynamic growth, driven by emerging trends and increasing integration with the Greater Bay Area (GBA), executives from QBE Insurance Group said as they highlighted innovation, technology, and a strategic focus on emerging risks as forces shaping the future of this “competitive” market. 

Paul Li, general manager of QBE Macau, outlined a positive trajectory of the insurance sector in the region to EAIC Today. “The market’s gross written premium (life and non-life) reached $4.5 billion in 2023, and the Macau insurance market is expected to grow steadily with a compound annual growth rate (CAGR) of more than 5 percent from 2024 to 2028,” he said.

This steady growth is underpinned by several key factors. “The integration of Macau, Hong Kong, and mainland China through initiatives such as Insurance Connect is fostering cross-border activities and opening up new opportunities in the insurance sector,” Li explained.

However, alongside these growth prospects comes intense competition. Lei Yu, chief executive of QBE North Asia and regional head of distribution, reflected on the competitive environment. “The Macau and Hong Kong insurance markets are always going to be very competitive, but we see opportunities, particularly in emerging risks,” she said.

One of the most significant opportunities in the Macau insurance market is cyber insurance, an area that remains largely underdeveloped. “There’s a huge gap in cyber insurance globally, and Macau is no different,” Li pointed out. “Many industries here, including hospitality and banking, haven’t fully adopted cyber insurance despite the high risks they face. We see this as a key area for growth.”

Yu echoed this sentiment, noting that as the region becomes more mature, awareness of emerging risks such as cyber threats will increase, opening up avenues for insurers to provide much-needed coverage. 

“We see opportunities in these areas as the region continues to mature and businesses recognise the need for more comprehensive risk management,” she added. 

Despite the opportunities, one of the major challenges facing the Macau insurance market is a shortage of skilled professionals. “One of the biggest challenges is the lack of insurance talent,” Li noted. “Not many people are entering the industry, and that’s something we need to address.”

To address this challenge, QBE advocates partnering with universities and offering internship programmes to attract young talent. Yu emphasised the importance of changing perceptions about the insurance industry, particularly among younger generations. 

“Insurance is often seen as less attractive than other financial services such as banking or consulting, but there’s so much more to it than sales. We need to showcase the variety of career opportunities available, from actuarial science to risk management and claims services.”

A tech hub 

A key driver of growth and transformation in the insurance industry, particularly in Macau, is the adoption of advanced technologies. 

“Macau is positioning itself as an innovation hub, especially in artificial intelligence (AI) and machine learning,” Li explained. “At QBE, we’re leveraging these technologies to improve efficiency. For example, we use AI to assist in underwriting employee compensation, significantly improving accuracy and processing times.” 

“We have a responsibility to protect consumer data and privacy and to use AI responsibly.”

Yu highlighted the broader potential for technology to reshape the industry. “In the next five to 10 years, we’ll see more insurance companies using technology to improve efficiency and collaborate with partners across different sectors, such as e-commerce and financial services. 

“This will help distribute products more effectively to different segments, from SMEs to individual consumers.” 

Beyond internal improvements, technology is expected to drive the development of entirely new, customer-centric insurance products. “With the increasing use of generative AI, blockchain, and cloud technology, we’ll see products that don’t exist today but will meet emerging consumer needs,” Yu added.

While the adoption of technology is essential for growth, Li and Yu both stressed the need to be mindful of the risks it brings. 

“Innovation is great, but we must be cautious about the potential downsides,” Yu warned. “As we adopt new technologies, we have a responsibility to protect consumer data and privacy and to use AI responsibly.” 

Li concurred, adding that an over-reliance on AI could pose challenges. “While AI improves efficiency and accuracy, we must not lose sight of the importance of human intelligence and expertise in making important decisions.”

For more news from the East Asian Insurance Congress conference (EAIC) click here.

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