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Going digital: insights to optimise online insurance in Asia

COVID-19 has been a catalyst for greater uptake of online insurance among consumers in south and southeast Asia.

The pandemic has increased consumer awareness of the utility of insurance, particularly of healthcare covers. It has also accelerated the trend of digital transformation, with many more consumers moving online to manage day-to-day needs.

The digital economy in Asia is booming, driven by young demographics, smartphone adoption, mobile data accessibility, and investment in online infrastructure and government support. Digital platforms are reaching across industries including insurance to create broad-based ecosystems. We surveyed consumers in three markets – India, Malaysia and Indonesia – in June 2020 about their attitudes to digital platforms and perceptions of buying insurance products online.

In all markets, survey respondents agree that ease of making applications is the major advantage of buying insurance online (see Figures 1a, 1b and 1c). Respondents in India prefer online channels for all steps on the insurance buying process. However, respondents in Indonesia and Malaysia value traditional offline channels for access to assistance and to gain a better understanding of policy terms.

Figure 1a: Consumers' perceptions towards buying insurance (online vs offline)

Figure 1b: Consumers' perceptions towards buying insurance (online vs offline)

Figure 1c: Consumers' perceptions towards buying insurance (online vs offline)

A number of respondents in all markets, including in India, express concern about lack of assistance vis a vis online purchases (see Figure 2). This underlines the value of supplementing online sales with offline support options.

Figure 2: Consumers' concerns towards buying insurance digitally

In all markets, the survey found that consumers are increasingly turning to familiar digital platforms for information about insurance (see Figure 3). Respondents expect to make greater use of aggregation sites and payment apps in the future.

Figure 3: Consumers' search behaviour is shifting online

Similar trends are observed with respect to insurance purchases. (see Figure 4). Consumers trust a range of digital channels and a growing number of consumers indicate that they would prefer to use online channels to buy risk protection covers. The gaps between preferred and used channels indicate unmet demand and potential growth for the insurance industry.

Respondents find payment/ digital wallet apps most credible, but banks and insurers' websites and apps, e-commerce apps and insurance aggregators follow closely, likely due to familiarity. In Malaysia respondents still prefer traditional channels such as agents and bank branches.

Figure 4: Consumers' purchase behaviour is shifting online

How should insurers respond? Our surveys suggest that many consumers in the three markets are ready to go more digital, including for their insurance needs, but still want offline touchpoints for advice and education about the insurance products on offer online. Digital platforms have access to millions of consumers, offering insurers a route to increase insurance penetration. With a mix of online and offline touchpoints, insurers can plug into platforms to connect with already online-savvy consumers and those who may be under-insured.

Personalisation can drive product innovation. Partnering with digital platforms can enable insurers to better target and reach consumers with personalised covers through multiple touchpoints. Digital technologies such as artificial intelligence, data analytics and cloud computing also offer insurers an opportunity to transform business models and reduce their operational costs.

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