The best strategy to bridge the insurance protection gap in Asia depends on many factors, but it is crucial to understand it with a customer's lens on according to EY Asia-Pacific insurance sector leader Anita Sun-Young Bong.
Speaking with Asia Insurance Review, Ms. Bong said, “When we talk about the protection gap, it’s typically from the insurer’s perspective, trying to convey a message to customers about what they lack or should have and prompt them to purchase insurance policies.”
She said, “What is really needed is for insurers to adopt a different line, putting customers at the center of their transformation strategy.”
Swiss Re has estimated this enormous protection gap at $83tn in Asia alone, providing a big growth opportunity for insurers that can establish meaningful relationships with new customers and increase their value over time. This is a huge untapped market of individuals and small businesses that have no insurance or insufficient coverage.
Ms. Bong said, “During the last several years, the urgency around customer centricity has intensified as leaders outside the insurance industry put customers at the heart of rich, personalized experiences.
“Insurers are making progress too, with more leaders recognizing how customer insights drive improvements in products, services and experiences. In that sense, changing consumer needs and expectations are both an invitation for insurers to innovate and a blueprint for their transformation programmes.”
She said, “Specifically, customers are looking for more flexible, personalized and accessible protections for how they live and work today. They want to be confident that they are sufficiently protected, their premiums are fair and reasonable, and their insurers share their values, particularly as people put more and more emphasis on ESG principles, for example.”
InsurTechs and other financial services startups have gained traction with on-demand and niche coverage, proving that consumers are willing to buy new and non-traditional insurance that more closely meet their needs.
Ms. Bong said, “To satisfy new demand, engage new customers and retain existing ones, insurers will have to overcome their reputation for delivering sub-par experiences and emphasizing standardized policies and traditional channels over customer needs and preferences. That requires fully operationalizing customer centricity, embedding it deeply in every function and promoting teaming across the organization, as leaders in other sectors have done.
She said, “Insurers that take an open-minded, proactive approach to change and remain agile in their innovation efforts will enjoy sustainable growth and secure market leadership in the decade to come, despite challenging economic conditions.”