The region has quickly emerged as an international hub for insurtech innovations, but maintaining momentum will require a deeper appreciation for collaboration and integration

By David Lynch, Group Chief Technology Officer, bolttech from Money 20/20 Asia

Amid a sustained boom in private sector investment and proactive government support over the last decade, cities across the Asia Pacific (including Bangkok, the home for Money 20/20 Asia this year) have quietly climbed the ranks of leading global fintech hubs, steadily overtaking many of their Western peers in recent years. While the region's rise to prominence has been nothing short of inspiring, it is also not surprising.

This is especially so considering the fertile ecosystem that has come to flourish here. Take, for example, the fact that over the last ten years, APAC has accounted for 52% of the global growth in technology company revenues, 43% of startup funding, 51% of spending on research & development (R&D), and 87% of all patents filed, according to research from the McKinsey Global Institute (MGI)[1].

The Insurtech Sector: Where Are We ‘Now’? What’s Now and What’s Next was the theme of Money 20/20 Asia 2024. Insurtech has featured in no less than four sessions and has been a notable beneficiary of the region’s broader fintech ecosystem development. Over the years, this industry subsector has rapidly increased in breadth and depth as ambitious founders and innovative corporate leaders have sought to transform the traditional insurance market. Insurance as part of the financial services sector has been criticised for being slow to adapt and embrace digitalisation – characteristics that have meant significant untapped opportunities for early movers.

Today, the insurtech sector has truly come into its own. While estimates differ across sources on the size and growth of the market here in the region, the consensus is decidedly positive. The global insurtech market – to which APAC is a significant contributor as the fastest growing region – was estimated to grow from US$10.5 billion in 2022 to $14.37 billion in 2023, registering an impressive compound annual growth rate (CAGR) of 36.52%.[2]

Similar to the fintech space, the expansion of Asia’s insurtech industry can be attributed to favourable demographic shifts, technological advancements, and supportive regulatory initiatives that have encouraged greater collaboration between new entrants and incumbents alike. Adding to insurtech’s growth story, increasing disposable incomes have expanded the demand for various insurance products, and with it, a young, tech-savvy population has established a clear need for better digital solutions to close a widening coverage gap.[3]

Institutional investors have recognised the compelling investment case for the region, readily seeking out promising startups in various segments of the insurtech market. According to data from PitchBook, private equity and venture capital firms have invested more than US$45 billion in Asia-based insurtech companies across 1,185 deals from 2013 to 2023. More recently, despite 2023 being a somewhat challenging year for venture funding around the world, APAC showed particular resilience, with insurtech investments in the region up 59% in the first half of the year.

Fuelling the ‘Next’ Decade of Growth The conversation about what’s next was everywhere at Money 20/20 Asia 2024. As we look toward the next decade, it is easy to assume that the only growth trajectory for the region is up. While Asia is most certainly well-positioned to ride on its past momentum and holds all the ingredients for further success, insurtech is at a critical inflexion point – one driven by a new wave of accelerating technological innovation.

It is important to note that modern insurance firms have come a long way from their perceived roots as risk-averse behemoths weighed down by outdated legacy systems. Years of intensifying competition have seen incumbents double down on digital transformation strategies, investments, and partnerships, which have worked together to meaningfully lower the barriers to adopting many emerging technologies today. This was a key theme at one of the dedicated insurtech panel sessions at Money 20/20 Asia 2024. Our Group CEO, Rob Schimek, was joined by Tokio Marine and Ascend Money to discuss the power of partnerships and how players in the insurance space are increasingly collaborating as much as they are competing. The main takeaway was clear – partnerships are crucial to creating a new future for the insurance industry, one where innovation is rife and customer experience is enhanced.

The increasingly pervasive application of AI, cloud computing, and predictive analytics in insurance operations and across the value chain has set the stage for incredibly transformative changes in the coming years. This future, however, demands not just adaptation but a careful rethink of how insurance products are fundamentally designed, delivered and managed for customers. I had the opportunity at Money 20/20 Asia to join fellow industry experts from Tune Protect and Finatext to dive deeper into the future trends ahead. How will risk management evolve within the insurtech industry in years to come? On the one hand, this will mean a profound opportunity for insurers of all sizes and their partners to unlock value in ways they never thought possible. On the other hand, it will also mean a slippery slope toward irrelevance for those who fail to shift their mindset to meet this new reality.

We strongly believe that, amid all these promising innovations, the real catalyst for sustained growth will be the broad adoption of embedded insurance models, where coverage can be seamlessly accessed at the point of customer need. This outside-in approach to insurance distribution enhances the benefits of close, digitally-enabled collaboration between partners, empowering more personalised products, innovative insurance propositions, and easy customer experiences.

Over time, collaborative relationships will become more powerful as the technology behind them advances. We expect the next frontier for insurance will be a deep focus on prediction and prevention. The insurance industry has traditionally developed products looking in the rearview mirror, leveraging historical data to perform trend analysis and develop pricing and underwriting models that maintain financial stability. As we head into the AI-enabled reality of 2024, the convergence of massive volumes of unstructured ecosystems and real-time data paired with advanced analytics capabilities will lead to a “shift left” epiphany for the industry.

We have a real chance as an industry to actively shape a future of insurance where Asia remains at the forefront of the global insurtech revolution, built on a firm foundation of deep collaboration and integration that sets us apart for decades to come.

[1]https://www.mckinsey.com/mgi/overview/in-the-news/what-is-driving-asias-technological-rise

[2]https://www.researchandmarkets.com/reports/5939289/insurtech-global-market-report

[3]https://www.pwc.com/bm/en/press-releases/insurance-in-2025-and-beyond.html