IR 4.0 offers big competitive advantage to insurance firms

Last update: 28/11/2018

By Zairina Zainudin

KUALA LUMPUR, Nov 28 (Bernama) -- Insurance providers should not be afraid to embrace the fourth industrial revolution (IR 4.0); instead, it should be viewed as a huge competitive advantage that will spur the growth of the companies and industry as a whole, said Life Insurance Association of Malaysia (LIAM) President Anusha Thavarajah.

She said digital technology would enable insurance companies to improve the customer experience and make it easier for consumers to understand their products.

Digitalisation in daily operations could also bring down the operational cost, thus lowering the cost of insurance as well, she told Bernama on the sidelines of the 3rd ASEAN Insurance Summit 2018 here today.

"When we look at digitalisation, the biggest key to success is accessibility as it opens doors for insurance (companies) to create awareness among customers and address the biggest problems of market penetration and protection gap.

"You can use technology, such as financial technology or fintech, to make the payment of insurance premium easier," said Anusha, who was one of the plenary session speakers.

Total gross written premiums recorded in ASEAN increased by 6.5 per cent to US$86.6 billion last year, and the overall insurance penetration rate rose from 2.8 per cent to 2.9 per cent.

Thailand, Singapore and Indonesia have the most developed insurance markets in the region, contributing 29 per cent, 28 per cent and 22 per cent of insurance premiums, respectively.

The ASEAN life insurance market recorded a 9.3 per cent increase to US$64.4 billion in net written premiums in 2017, with the top contributors being Singapore (21 per cent), Thailand (18.1 per cent), and Indonesia (14.4 per cent).

The general insurance market also registered significant growth with a 5.3 per cent increase in its gross written premiums, led by Thailand (30 per cent), lndonesia (21.2 per cent), and Malaysia (18.4 per cent).