Vietnam, Indonesia, Thailand, and the Philippines face unique emerging risks, resulting in distinct nuances within their insurance sectors, says the Singapore-headquartered regional InsurTech company, Igloo.
Additionally, the combination of rising income levels and growing digital and financial literacy in these countries is influencing a shift in insurance preferences among their consumers.
Tapping insights into the preferences and trends among consumers in the four Southeast Asian markets, Igloo uses technology and collaborates with leading digital enablers to address the changing preferences of Southeast Asian consumers.
While these countries together account for over 97% of the region's GDP per the IMF, insurance penetration in each of these countries remains below 3%.
Regarded as one of the world’s next big digital economies, Southeast Asia has seen a rapid uptake of digital insurance over the past few years. With digitization, consumers have become used to a speedy and seamless experience when purchasing insurance. This has led to an expansion of distribution channels, which Igloo expects to continue into the coming years.
This digital shift is also driving the need for innovative products that specifically address risks inherent to today’s digital-first consumers. In the Philippines, where according to GlobalData almost 90% of the population shop online, there is a growing demand for secure shopping experiences. With this in mind, Igloo and GCash partnered to offer Online Shopping Insurance providing coverage from undelivered goods, uncontactable sellers, partial delivery, and fake goods.
Meanwhile, consumers in Indonesia express concerns over data privacy and protection. A report by Ensign InfoSecurity states that a significant portion of the personal data stored online in Indonesia is continuously released for sale. Cyber insurance, a product offered solely to businesses in the past, has gained popularity among Indonesian netizens looking to protect themselves online against data breaches, cyberattacks, and financial losses associated with cybersecurity incidents.
Across the different countries in the region, sustained economic growth is seen to positively impact sectors such as transportation, travel and tourism, and property and real estate. As the government continues to improve the nation’s infrastructure, the general insurance sectors tend to benefit because improved infrastructure often leads to increased property value which requires more insurance coverage. In countries like the Philippines where there is heightened susceptibility to natural calamities, Filipino consumers place a premium on insurance products that protect their assets against phenomena such as typhoons, earthquakes, and volcanic eruptions.
Climate change has also brought about risks such as extreme/irregular weather and crop failures which has drastically affected agricultural output for many countries in Southeast Asia.
With agriculture accounting for 10.3% of the region’s GDP, farmers need protection for both their benefit as well as the economy’s. In 2022, Igloo launched its parametric Weather Index Insurance in Vietnam to protect rice farmers against irregular rainfall and later extended it to protect coffee farmers.
When it comes to transportation, Southeast Asia sees the second highest road traffic fatality rate among all WHO regions. Among the countries analyzed Thailand ranked second in traffic-related mortality — creating demand for personal accident and motor coverage. Similar sentiments are also echoed in Vietnam. Igloo recently addressed this by collaborating with AirAsia Ride in Thailand to offer protection to riders against theft, vehicle damages, accidental death, and injuries which may arise during the journey.
Igloo is the first full-stack insurtech firm to emerge from Singapore. It has offices in Singapore, Indonesia, Thailand, The Philippines, Vietnam and Malaysia and tech centres in China and India. With a mission of making insurance accessible for all, the firm leverages big data, real-time risk assessment, and end-to-end automated claims management to create B2B2C insurance solutions for platform companies and insurance companies.