APAC leads the way in open insurance
The exponential growth in digital transactions and data is reshaping how organizations conduct business. In a post-COVID environment, the improved use of data has become essential for understanding consumer demands. Financial services firms are seeking new revenue streams to maintain relevance in a market that increasingly values hyper-personalization, and insurers are following suit.
To stay competitive, many insurers are adopting “Open Insurance.” This approach allows for improved data sharing, enabling companies to generate new revenue and build stronger relationships with customers. The emerging trend relies on the effective use of Open APIs to meet digital demand and promote innovation.
While open banking regulations like PSD2 in Europe forced the issue, insurance is moving differently. There is currently no regulation forcing insurers to share data. However, a report from Willis Towers Watson estimates that 67% of insurers will modify their business models by 2025.
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A Shift to Service-Based Models
Insurers are consequently building digital ecosystems to offer Insurance-as-a-Service (IaaS). Consumers can purchase pre-built elements of insurance on a subscription basis depending on their individual needs. This shift lets customers select specific services from an insurer and its partners within a digital platform.
AIA’s partnership with WeDoctor illustrates this model effectively. The collaboration connects AIA with WeDoctor’s vast network, which includes 2,700 top-tier hospitals and 220,000 doctors. It also spans 15,000 pharmacies. Consequently, WeDoctor’s 110 million registered users gain access to AIA’s protection solutions across 30 provinces in China.
The technical infrastructure relies heavily on APIs. These tools facilitate the integration of service offerings between insurers and third parties. Some APAC insurers are already ahead of the curve in implementing this architecture.
Investment and Strategic Partnerships
Global investment in insurtech reached $6.37 billion in 2019. That year saw a 63% year-on-year increase in funding. The rising number of insurtechs has introduced new technology and propositions, prompting traditional insurers to partner rather than compete.
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AXA Singapore launched AXA Affiliates in 2017 to bring an IaaS platform to partners worldwide. The move made them the first insurer in Asia to deliver end-to-end insurance transactional APIs.
One example is the partnership with Tencent’s WeChat. The “AXA Go” program offers travel insurance fully integrated into the messaging ecosystem.
Ping An is also a major player in the region.
