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The insurance industry must practice the preparedness it preaches in order to keep pace with accelerated growth in Asia.
Published on August 15, 2023
By Gordon Lam, senior underwriter, professional and financial risk
Markel, Hong Kong
Acceleration is a familiar concept in Asia. The challenging post-pandemic economic conditions are beginning to regulate in the region, as food and oil prices fall and China’s economy rebounds. Improving conditions are underpinning predicted growth of 4.7% in 2023, up from 3.8% in 2022. According to the IMF1, these growth rates – combining growth in established economies such as China and India and the expansion of emerging and developing Asian economies – put Asia head and shoulders above other regional economies in the current global economic growth trajectory.
Whether economic growth is fuelling acceleration in areas such as technology and financial services or vice versa, the fact remains that advancements are happening at an astonishing pace.
At the World Economic Forum (WEF) in June 2023, China’s Premier Li Qiang said China is “willing to work with all parties in the push to develop cutting-edge technology” and, in a similar display of intent, the Hong Kong Stock Exchange is due to launch an initial public offering (IPO) settlement platform in October that will shorten the time between the pricing of a new listing and the trading of shares to two days.2
These recent examples, symptomatic of the region’s growth ambition and technological advancement, raise some critical questions regarding preparedness in the insurance industry. Are we preempting the possibility of an evolving risk landscape? And are we prepared to meet the insurance needs of our clients in a sustainable way?
Endorsements added onto standard miscellaneous wordings may offer quick fix solutions, but they are neither sustainable nor sufficient in the longer term to meet the needs of commercial clients. To ensure future proof and fit for purpose insurance is available, we need to dedicate attention and effort to the development of products befitting of today’s heavily tech influenced risk landscape.
The good news is that the insurance industry has a long track record of creating new and exciting markets around emerging risks and consumer demands.
Markel’s Fintech and Comtech policies are examples of this innovative spirit, offering insurance for financial technology companies and technology and telecommunications companies respectively. Both products offer cyber coverage as standard, which is symptomatic of the technology boom and the way in which insurance has adapted to the associated risk of cybercrime, data breach incidents and business interruption.
Investment in technology has broader implications for the insurance industry, including the shift towards digital platforms in response to evolving broker and customer demands for a more efficient online user experience. Markel has several success stories regarding the implementation of online portals in Hong Kong -including a brokerage-specific professional indemnity quote system that went live earlier this year – that are designed to enhance efficiency and, ultimately, to make brokers’ lives easier.
As Asia continues to accelerate, the insurance industry needs to keep pace. We are in the business of managing and mitigating risk, and we counsel our customers to be educated, aware and prepared. As carriers we must lead by example, but acceleration does not equate to rushing. Quality and sustainability of coverage are key, and a culture of innovation is to be encouraged if we are to meet the continually evolving needs of our customers.
For innovation to deliver sustainable value to insurers, brokers and customers, it must extend beyond product offerings and become embedded in the behaviour of our industry. Through continuous collaboration, corroboration and careful consideration we too can accelerate.
1 Asia’s Easing Economic Headwinds Make Way for Stronger Recovery (imf.org)
2 Hong Kong Stock Exchange to shorten IPO settlement period to two days, Companies & Markets - THE BUSINESS TIMES
About Markel International:
Markel International is a division of Markel Group Inc, a US-based holding company trading on the New York Stock Exchange (NYSE: MKL). Markel International writes insurance and reinsurance business through six divisions and through offices across the UK, Europe, Canada, Latin America and Asia Pacific. Markel International’s insuring entities include Syndicate 3000, Markel International Insurance Company Limited, Markel Insurance SE., and Markel Resseguradora do Brasil S.A. Its UK national markets business also provides legal and professional fees insurance cover as well as legal and tax consultancy services.