In 2024, the insurance industry faces challenges due to rising property and auto rates due to inflation, geopolitical uncertainty, and increased regulatory scrutiny. Technology is emerging as a key driver for insurers navigating the turbulent landscape.

Oh Survey 58% of insurance respondents have allocated increased funding to digital innovation, according to Gartner. This ongoing trend towards digitization and business automation, accelerated by COVID-19, is likely to continue through 2024, with insurtech playing a key role in enhancing the efficiency of insurers through advanced technologies. .

According to industry stakeholders and experts, a number of technological trends will shape the insurance sector in Asia Pacific (APAC) and globally later this year. These trends include the use of artificial intelligence (AI)/machine learning (ML), natural language processing (NLP), and cloud-based services to improve operational efficiency and allow for hyper-personalization. Embedded insurance is also expected to continue to grow due to the rapid pace of digitalization, changes in consumer behavior, and more collaboration between traditional insurance firms and tech companies.

Hyper-personalization of the insurance value chain

In APAC, hyper-personalization is driven by increasing customer expectations for tailored experiences. CapcoA recent insurance survey by , found that nine out of ten policyholders in Hong Kong (94%) and the wider Greater Bay Area (GBA) (90%) are encouraged to share additional personal data with insurers. will be done which includes many benefits. Personalized services, cheaper premiums and better claims processes. The results are similar in other surveyed markets such as Singapore, Thailand and Malaysia. Respondents also say they are open to new ways of sharing personal data, such as wearing wireless smart devices and using smart devices at home.

According to NeutrinoInsurers, a Singaporean finance software provider, is responding to this demand. A quick turn Machine learning (ML) algorithms and gen AI to analyze customer behavior data and customize insurance products in real-time.

AI powered chatbots and NLP

Another trend is the use of NLP and gen AI-powered chatbots to improve how insurers engage with customers.

Gen AI allows insurance companies to automate tasks across the value chain. This includes assisting customers and advisors in understanding policy coverage and assisting sales agents in recommending appropriate products.

NLP, meanwhile, streamlines the process by analyzing vast amounts of text data from sources to accurately assess risks, detect patterns that indicate fraudulent activity, and ensure policy compliance. This technology can also be used to help with customer preferences, market trends and competitor strategies, data-driven decisions and targeted marketing campaigns.

Interest in AI and NLP is growing in the insurance sector as consumers become more comfortable using chatbots. Some research shows that 74% of consumers prefer When using chatbots to find answers to simple questions, 64% of users cite 24/7 availability as their most helpful feature.

Drive for operational efficiency

In the current economic environment, insurers in APAC are under pressure to operate more efficiently while delivering value to consumers. Previously, they focused on growth and customer acquisition, often outsourcing back-office functions to save costs. But this dependence on cheap labor hinders technological progress.

However, recent years have seen insurers prioritizing operational overhauls, leveraging technologies such as automation and AI to reduce costs and increase efficiency.

A 2023 study by Clearwater Analytics highlights the keen interest of insurers and insurance asset managers in Hong Kong and Singapore in innovative technologies. 86% of professionals polled in both locations said they predicted an increase in technology spending in the coming year. The C-suite prioritized the implementation of AI, ML, and cloud-based solutions, reflecting a proactive stance to leverage advanced technology for improved operational efficiency and decision-making.

Insurance everywhere

Another trend highlighted by Tata Consultancy Services And McKinsey & Company There is embedded insurance, an approach that is seen as a major opportunity for both insurers and consumers.

For consumers, embedded insurance offers convenience and a simple process. Consumers access personal insurance coverage when needed with a quick sign-up process and hassle-free claims. For insurers, embedded insurance holds significant market expansion potential by offering additional distribution channels and facilitating access to new and broader customer segments.

According to Tata Consultancy Services, embedded insurance offers an effective way to address the lack of insurance coverage in Asia. It does this by providing express insurance products at the point of sale for other goods or services.

For global consultancy McKinsey and Company, insurers in Asia benefit significantly from participating in embedded insurance, particularly by gaining access to new customer segments through fully integrated partnerships with non-insurers.

The consultancy predicts that by 2030, the embedded insurance market in Asia could grow to US$270 billion in terms of gross written premium (GWP). 66% of this growth is expected from GWP shifting from traditional channels such as agency and bancassurance to embedded channels.

From 04 to 06 June 2024, InsureTech Connect Asia (ITC) AsiaOne of the largest insurance ecosystem conferences in the region, an inclusive and global gathering of insurance industry executives, tech entrepreneurs and investors will come to Sands Expo and Convention Center in Singapore.

Over three days, the industry will share its insights and trends in the insurance market, learn how to increase productivity and reduce costs through innovation and digital transformation.

Industry experts and leaders will examine the biggest opportunities and most pressing challenges facing the sector, focusing on topics such as embedded insurance, AI and ML for digital transformation, and innovation across Asia. Creating an enabling environment, and the rise of general AI. .

Participants can expect a rich experience tailored to their specific interests and goals. They will connect with insurtech entrepreneurs and interest in potential commercial relationships, network with investors and fellow innovators, and get a prominent look at young insurtech companies.

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