Supportive government policies in India, Indonesia and Malaysia, coupled with an increase in digital activity due to COVID-19 are pushing consumers – and their insurance needs – online, according to a study by Swiss Re.
Research by the global reinsurer said that the growing presence of e-commerce and digital wallet apps presents opportunities for innovative partnerships between insurers and digital platforms to bridge the US$498 billion health protection gap in the three emerging Asian markets.
Titled “Going Digital – Insights to Optimise Consumer Appetite for Online Insurance”, the study surveyed 1,800 consumers in India, Indonesia and Malaysia in June. It aims to understand their attitudes toward digital platforms and perceptions of buying insurance online.
The survey also tested their acceptance of selecting and purchasing six life and health insurance products tailored to fit digital platforms. The three countries have a combined population of over 1.5 billion people, with a middle class growing in both number and digital savviness.
Restrictions to slow the spread of COVID-19 have pushed consumers to begin looking digitally for solutions that may not have been there prior to the pandemic, the report said. 68% of respondents used digital platforms at least once a week, while an average of 70% expressed interest in using online channels to purchase insurance.
Due to consumers’ familiarity with digital wallet and e-commerce apps, these have been found as suitable avenues for online insurance distribution, especially in India and Indonesia. Meanwhile, Malaysians tend to favour bank or insurer websites and apps.
Among the six hypothetical insurance products, consumers showed a strong preference for simpler critical illness and medical reimbursement insurance on digital platforms. Critical illness pay-per-use insurance had the highest chance of success for digital distribution in Indonesia and Malaysia. Nearly 80% of Indian consumers opted to purchase hospitalisation cash and critical illness pay-per-use insurance through digital platforms, but interest in the other types of insurance was also high.
“Health and safety measures intended for curbing the spread of COVID-19 have now driven a clear paradigm shift towards digitalisation in the post-virus era," said Marianne Gilchrist, managing director, head of globals and life & health South Asia, Swiss Re. "With an increasing number of digital platforms extending their business reach into financial services, insurers need to adapt their business models to become more relevant and responsive to the latest customer needs.”