The total transaction volume of insurtech mergers and acquisitions (M&As) in Asia reached US$460 million in 2017, over three times that of 2016, according to findings from Willis Towers Watson.
The fourth Quarterly InsurTech Briefing, produced in collaboration with software producer CB Insights has found that insurtech transactions have continued to focus on capabilities related to digital distribution, consumer models and data analytics, while claims management has become a top business priority.
“Investments have picked up especially in the areas of artificial intelligence, automation, process enhancement and customer engagement as companies hope to drive further efficiencies in business operations,” said Vincent Lien, managing director, Willis Towers Watson Securities, Asia Pacific. “Insurtech certainly plays a significant role in those areas through the use of data and analytics. They are still to reach prominence across Asia Pacific, so the opportunities are huge.”
According to Kevin Angelini, head of strategy for the Insurance Consulting and Technology business in Asia Pacific at Willis Towers Watson, the popularity of data and analytics is the result of the natural connection between data, peoples’ lifestyles, and their insurance needs.
“Thanks to advances in technology, now a growing abundance of data is available enabling insurers to use sophisticated data analytics to reward people who live a healthy lifestyle,” he said. “This is a growing trend within insurers and the next challenge is to gain alignment from the wider ecosystem such as regulators and reinsurers.”
Markets in China and India accounted for a 73% of transactions in 2017. Hong Kong, Singapore and other Asia markets continued to build on the progress of 2016 and accounted for 27% of the transactions.
“As companies seek insurtech transactions to tap new technologies, they are looking mostly to Asia, and in particular to Hong Kong and Singapore, amid low growth and even lower interest rates in the US and European economies,” Angelini added. “Hong Kong and Singapore have well-regulated free markets, mature insurance customers, and access to international capital markets. These make it easier for investors to integrate resources.”
Among the high-profile transactions was Yunfeng Financial’s acquisition of MassMutual Asia. In August 2017, Jack Ma’s Alibaba-backed Yunfeng said it would buy Hong Kong-based MassMutual Asia for US$1.7 billion.
Meanwhile, last February the Monetary Authority of Singapore announced its intention to introduce the ASEAN InsurTech LaunchPad, which aims to bring in high-growth insurtech start-ups to Singapore and facilitate collaboration between locally-based insurance corporations and start-ups.
View the Willis Towers Watson InsurTech Briefing Q4 2017 report here.
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