Insurance companies in Asia set to leverage big data in push for smarter, cheaper products
Insurance companies in Asia including the biggest players in Hong Kong have been adapting new technology to cut costs and better manage risks related to car accidents as well as extreme weather and other natural catastrophes, according to the head of Nasdaq-listed data centre company Equinix.
“Asia has a big population and cultural attitudes are to place great importance on family. These factors are feeding an increased demand for insurance in the region. Asia is set to become the fastest growing insurance market worldwide,” said James Maudslay, global head of insurance of Equinix.
To capture these growing business opportunities, he said many insurance companies are looking towards big data in developing new products and risk management models, which would allow insurance companies to operate at a lower cost.
“Big data helps traditional insurance companies to develop new models and move into the digital age,” Maudslay said in an interview in Hong Kong.
Equinix, a California-based company, provides a platform to connect financial firms with their business partners and customers. In the insurance sector, Equinix has a platform that simplifies the sharing of data between stakeholders, enabling interconnection in the global insurance market which can help improve the performance of risk modelling.
Maudslay said when insurance companies want to use big data to develop products or risk management modules, they draw heavily upon the company’s data exchange ecosystem.
As an example, Maudslay said insurance companies can use data on motorist behaviour to reward those who have fewer accidents by slashing their premiums.
The data collected from the network also allows insurance companies to develop new risk management models for typhoons or other natural catastrophes.
Hong Kong had five major storms last year which resulted in record insurance claims of HK$1 billion (US$127.39 million).
“Following a typhoon, we receive calls from insurance companies seeking more data for developing new modelling for risk management,” said Gareth Bridges, director of digital business of Asia-Pacific of Equinix.
The Hong Kong Insurance Authority in September issued a range of measures to encourage insurance companies to develop insuretech, which has prompted HSBC, MetLife, AIA Group, and Manulife to announce their fintech plans over the past few months.
For its part, Manulife has implemented an online claim platform for amounts up to HK$3,000. Meanwhile HSBC Insurance expects to draw a third of its new business from digital channels by the end of 2019, compared to 8.2 per cent last year.