8 minute read 22 Apr 2021
Young man staying connected in the city

How Southeast Asia’s insurers can seize growth in the next decade

By Brandon Bruce Sta Maria

EY Asean and Malaysia Insurance Sector Leader

Passionate about assurance and insurance. Diversity and inclusiveness warrior. Husband to a lovely wife and father to three wonderful boys. Avid dog walker and runner.

8 minute read 22 Apr 2021

Winners will be those who rethink their offerings, increase digitalization and embrace new skills to offer personalized services.

In brief
  • Insurers will need to create different value propositions focused on health and financial well-being and remix their distribution models.
  • Ecosystems will be essential to help insurers make the shift to proactive, personalized offerings and cross-channel experiences.
  • Hybrid human/machine operating models will increase customer engagement, lower costs and improve career options in the industry.

Insurance markets usually take a long-term view and lag others in transformation. But the impact of the pandemic, combined with economic, social, technological and competitive shifts mean Southeast Asia’s insurers are facing an urgent need for an immediate, proactive change.

Interest rates have remained too low for too long for past strategies to be effective now. The product-driven business models of the past will not be sustainable in the future, primarily because they can’t adapt quickly enough to changing customer needs.

NextWave life insurance and retirement


Asia-Pacific customers consider end-to-end online policy processing when selecting an insurer after COVID-19.

Singapore aside, life insurance penetration for Southeast Asia is low, at approximately 1.2% to 3.4% of gross domestic product (GDP) across the different countries.¹ This presents significant untapped potential for the industry to increase its impact and feature more prominently in the region’s growth story. But potential alone is not enough. The industry needs to step up its game and understand the strategic role it can play, especially in reaching the underserved and innovating to meet the needs of a new breed of customer.

The COVID-19 pandemic has created new openings for insurers in general. According to EY 2021 Global Insurance Outlook, the enormous health care, savings and protection gaps represent a huge opportunity for insurers to translate their purpose into meaningful action, and provide value for individuals and society.

Addressing critical societal issues, starting with the protection and retirement savings gaps, will be good for business and will encourage innovation and transformation. After all, what industry is better positioned to understand and deliver the financial security that consumers in this part of the world need?

Last year, the rapid shift to remote working and all-digital customer touch points revealed how quickly insurers could adapt to changing circumstances. Many Southeast Asian insurers have shifted successfully to digital sales platforms and remote signatures. Nevertheless, much more work remains to enhance and integrate digital channels and to become truly customer centric. To win in the coming decade, Southeast Asian insurers will need to:

1. Meet new consumer demand for financial health and wellness

COVID-19 crisis renewed interest in protection products, but it also emphasised the importance of health and financial well-being to many of the region’s consumers.

Looking ahead, insurers will need to create different value propositions focused on helping people live the lives they want, with high degrees of financial security and physical and mental health. Such offerings will be more flexible, forward-looking and “goals-based,” with an emphasis on proactive preparation rather than downside protection. They will employ advanced data analytics, such as customer identity graphs and customer journey maps to create profiles based on needs and life stages.

We anticipate these redesigned and flexible “goals-based” offerings will reflect that more people work for themselves or participate in the gig economy and harness the fact that more consumers are willing to share sensitive data.

77%-80% of consumers are comfortable sharing genetic test results for disease management support or discounted premiums.²

Once consumers are convinced to share personal data in return for clear benefits, with permission, Southeast Asian insurers will be able to make proactive offerings and tailored recommendations for next-best actions.

We can imagine an AI-powered digital avatar catering to individual goals and preferences, with prompts to exercise, for example, or to save a little extra money to meet a long-term financial objective. The avatar could track behavioral patterns and adjust its messaging as customer needs change, applying behavioral economics to drive engagement and better outcomes for customers.

Some insurers will also offer a range of solutions aligned to life events, such as a home purchase, as well as accelerated benefit riders and broader policies for health and long-term care.

As a result, through better financial and health outcomes and reduced premium payments, customers will see more and clearer value from their insurers.

Creating these offerings will require heavy investment in advanced analytics and AI. Insurers with the necessary digital and analytics capabilities will be able to combine simpler components into personalized solutions. In the next decade, it is expected that insurers to more than triple their overall technology spend while deriving much greater value from their data assets. We also anticipate them engaging with regulators to work through the data privacy and adverse selection challenges created by new, personalized products.

76% of outperforming insurers leverage advanced analytics solutions.³

2. Harness the power of ecosystems and omnichannel engagement

The region’s insurers cannot make the shift to proactive, personalized offerings alone. Ecosystems will be essential – allowing insurers to focus on their strengths while using external expertise and capability to orchestrate future insurance offerings, and offer complementary services.

By offering access to application programming interfaces (APIs), microservices and data fabrics, ecosystems will become increasingly critical to help insurers engage consumers with compelling propositions and cross-channel experiences. They will also help the region’s insurers to modernize their distribution and shift to hybrid advisory models that balance robo-advice with human interaction.

In particular, ecosystems will be essential to help insurers offer subscription models, which we predict will attract a large proportion of the region’s Gen Z population. In future, holistic subscriptions delivered via ecosystems will offer access to a range of products and services – from life and health insurance to savings to investment and income products.

Subscriptions will be embedded in consumers’ daily lives, creating continuous engagement with regular interaction and proactive offerings keyed to major life events. The most successful will function as personal financial operating systems. Rather than having only a few touchpoints during the customer lifecycle, insurers will constantly interact with consumers, learning more about them and finding new ways to add value and monetize the relationship.

Governments and regulators are likely to encourage these models, recognizing that traditional social security systems may be insufficient to meet future retirement income and health care needs.

3. Create a blended human/machine workforce

As digitalization advances to support new offerings, insurers must find ways to boost productivity, enhance operational agility and reduce technology debt and maintenance costs. We expect agents and intermediaries to embrace digital selling, using lead management tools and connecting effectively with customers via chats and video calls. This will both increase customer engagement and lower distribution costs.

Productivity gains will also be made by automating many back-office processes and cultivating a more flexible cost base by adopting software-as-a-service (SaaS), platform-as-a-service (PaaS) and other cloud-based computing models.

As hybrid human/machine advisory models gain traction, advisors will be able to capitalize on the productivity gains to serve a larger segment of the population, offering advice to those who might not have been able to afford it previously.

Insurers will also need to bring on board new capabilities, including data scientists, technologists, customer insight and experience specialists, and actuaries adept at harnessing the power of analytics, AI and machine learning. Traditional insurance skill sets will sit alongside, or blend with, these newer capabilities; for example, actuaries will embrace the possibilities of data science. Career paths will become more varied, with more skills transferable between sectors.

By using technology and data in more sophisticated ways, life insurers will offer more rewarding work and connect with their customers in more personal ways. This will increase the profile of Southeast Asian insurance companies as solid career options, challenging the banking industry for the best talent in the marketplace.

Imperatives to prepare for the next decade

In the coming decade, we expect significant new products, services and value propositions, as well as richer, omnichannel experiences for all customer segments. Insurers will make much more sophisticated use of advanced technology, with increased digitalization helping to reduce costs at the same time as it enhances customer experiences. Workforces will be considerably leaner and feature new skills and talents. Distribution networks will be remixed.

Decisions made and actions taken in 2020 will go a long way to determining the results of 2030. The following actions now will help insurers seize the most compelling opportunities ahead in the next decade.

  • Embed a customer-centric product strategy shifting toward more holistic, simpler, flexible and personalized solutions with subscription models
  • Accelerate and expand digitalization initiatives and align them for holistic transformation
  • Critically assess and automate middle-and back-office functions that are repetitive and of low value and consider outsourcing what can’t be automated or is too expensive to digitize
  • Use acquisitions, divestitures and reinsurance to reduce risk and find opportunities
  • Develop or engage in others’ ecosystems to access new customers and increase engagement and retention
  • Consider options to work with government to reach the underserved, formulating innovative, yet simple and affordable, insurance solutions with a view to bridge the significant protection gap faced by many Southeast Asian countries

Identify future skills needs and where current workers can be upskilled or retrained and draw on technology experts to accelerate transformation and innovation.


The biggest growth opportunities in Southeast Asia’s insurance market will be seized by institutions that embed a customer-centric product strategy and shift to more holistic, simpler, flexible and personalized solutions with subscription models.

About this article

By Brandon Bruce Sta Maria

EY Asean and Malaysia Insurance Sector Leader

Passionate about assurance and insurance. Diversity and inclusiveness warrior. Husband to a lovely wife and father to three wonderful boys. Avid dog walker and runner.