Digital P&C personal lines market projected to reach $7.5bn in five years | Insurance Business Asia
The digital P&C personal lines market in South and Southeast Asia is expected to record a cumulative US$7.5 billion in premiums over the next five years, a survey by Swiss Re Institute found.
The survey, titled Digital adoption in personal P&C insurance in South and Southeast Asia, looked to gauge the markets’ attitudes towards buying personal lines (home, personal accident and employment) insurance online.
The South and Southeast Asia region has seen exponential growth in the number of digital consumers over the past few years, with the trend further accelerated by the COVID-19 pandemic. Low digital P&C personal lines market penetration, estimated at 1% to 2% in the region, shows strong growth potential. To capture this opportunity, understanding consumer preferences will be key to help P&C insurers expand their reach through digital distribution channels, Swiss Re said.
Across all markets, resistance towards buying insurance online is often caused by the lack of an individual or agent to help explain what is perceived to be complicated policy wording and to offer guidance through the claims process. Nevertheless, the survey found that 40% of consumers are open to buy personal lines insurance online. India topped the list of markets ready to embrace digitalisation, with 53% of consumers open to purchasing insurance digitally. On the opposite end was Singapore with 34%.
More than 20% of respondents said they were concerned about receiving fake or poor-quality goods purchased on digital marketplaces. Gadget risk is also a key concern, with 77% of respondents indicating they had experienced damage to their devices in the past three years.
With regard to cyber risks, more than 20% of respondents viewed personal information and data loss as the most serious risk. Thirty percent of respondents desired protection from phishing or hacking attacks and from the illegal use of e-wallet transactions arising from loss or theft of a device. Meanwhile, 21% percent of respondents said they would like insurance to cover losses arising from identity theft involving the illegal use of personal information.
According to the Swiss Re Institute, the region’s insurers have a unique opportunity to close the protection gap by developing simple and modular insurance products, streamlining the digital on-boarding process and educating the consumers to boost trust and familiarity with digital distribution of insurance.
“Consumers' evolving preferences provide useful information on how insurers can expand their existing risk pools and break into new ones,” said Grace Li, team lead for innovation at Swiss Re. “Social behaviours are evolving and, as a result, we see opportunities to tailor new and more flexible solutions to meet evolving needs – for example additional protection for consumers' increasingly online transactions.”