With a host of challenges and opportunities on the horizon for insurance in 2017, one CEO has said that he believes insurers need to re-focus.
As soft market conditions, increased competition and a surplus of capital in the market continue to make their presence felt in the industry across the region, Jon-Paul Jones, president and CEO of AIG
Indonesia as well as head of the firm’s agency business in Asia Pacific, said that insurers need to be aware of their niche.
“Generally over the last few years we have seen an enormous amount of pressure on lowering rates and that is across most areas of the business, both commercial and consumer,” Jones told Insurance Business.
“At the same time, we have seen more entrants coming into the market.”
Jones stressed that with this increased competition, businesses, including AIG
, will have to make moves to streamline their efforts as “we cannot be everything for everyone so we have to focus down on what is the niche and narrow our focus to where we can really differentiate and add most value to our customers.”
A streamlining effort from the insurance industry may seem counterintuitive to growth. With the pressure of insurtech also breathing down the neck of the industry, could a narrower focus lead to a smaller business?
Jones thinks not and sees the streamlining of businesses as an opportunity. He also believes that competition will begin to “dry up naturally” as companies come to decide on their specialty.
Companies throughout Asia Pacific have expanded rapidly over the previous years.
With Chinese and Japanese firms taking the headlines for their global M&A activity, it remains to be seen if the right course of action is to spread wider or focus on already successful geographies and product lines.
One thing is for sure, only one attitude will prove right and that will be a great boon for whoever backs the winning horse.
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