Developing micro-insurance products which could potentially be sold in 7-Eleven shops and improving financial literacy are the keys to growing protection insurance markets in Asia, according to experienced insurer CEO Angela Hunter.
Hunter, who has led major insurers across Asia and Australasia for more than 20 years, argued the sector needed to do a better job of designing products and distribution to fit population needs in the region, instead of relying on banks, agents and detailed underwriting.
Speaking at the Comarch User Group conference earlier this summer, she noted that while insurance take-up in Singapore and Hong Kong was relatively strong, other nations were at around 2% and these populations did not see the need or value of insurance because it was not appropriate for them.
Hunter (pictured) highlighted that there had failed to be a surge in interest in insurance across many countries in South East Asia which has been witnessed in many other parts of the world post-Covid.
As a result, Hunter suggested several remedies, including developing more relevant products such as simple micro-insurance plans with limited underwriting.
“These types of micro insurance products, there’s no or very simple underwriting – just one, two or three questions and done,” she said.
“Of course there’s a price for that, we all know that when someone is fully underwritten you can price the risk more accurately, so there is a bit of a premium for that.
“But you’re making the product much smaller and simpler coverage, and that means you’re addressing affordability and simplicity, which are two of the issues you have.”
7-Eleven distribution ‘a winner’
In terms of distribution, Hunter recalled conversations noting how in-demand it is in some countries, such as Thailand, to live near 7-Eleven convenience shops.
“So if you can find a way of distributing very simple products via a 7-Eleven that’s a winner,” she continued.
“And obviously digital, although there are some challenges in some countries in South East Asia with internet access. I’m not saying technology is the total answer and that we should be digitizing everything, but it’s a combination.
“Digital for me is more about how to find ways of addressing education, financial literacy and also product design because a lot of insurers have legacy systems.
“That means long lead times for product development and long approval processes depending on the regulator.”
Hunter added that she had seen some attractive ideas with product development technologies allowing segmentation of every element of coverage.
This then allows insurers to launch a product picking just a couple of the coverages which have already been pre-approved by the regulator and pre-approved internally.
“Some of that sounds really easy, but for insurers it’s super, super hard to do,” she added.