Committed inclusion strategy key: AFF 2020January 14 2020 by Yvonne Lau
At the Asian Financial Forum on January 13, market leaders discussed grasping the Asian opportunity alongside ensuring inclusive growth.
Winnie Wong, chief executive of Asia Insurance, moderated the session.
Though Asian growth potential moving forward is robust, there is a long way to go for the market in improving inclusiveness, said Clarence Wong, chief economist, Asia at Swiss Re Institute. Wong noted that protection for consumers is not yet adequate — in particular for low-income households in emerging Asia. Affordability is the key hindrance to purchasing life products, according to surveys from emerging Asia.
For primary insurers like Axa, Prudential and Sun Life – ensuring their company strategy is genuinely committed to an inclusive growth strategy and its proper implementation, is crucial.
Gordon Watson, Axa Asia’s chief executive, commented: “CSR is great, but we must put it at the centre of [the company’s] strategy and make it a reality, otherwise it won’t happen as it should.” In 2016, Axa Asia established a team dedicated to financial inclusion for customers in emerging markets — aiming to raise protection awareness and trust in the firm.
What has made insurers successful is a diversified strategy that includes an Asia portfolio, said Kevin Strain, executive vice president and chief financial officer at Sun Life. Strain highlighted that Asian growth is about its middle class emergence — and the protection needs of this class. He cited three elements in furthering inclusiveness — proper protection for the middle class; agency and awareness for consumers; and integrating digital initiatives to provide better service and access to customers.
Sun Life’s operations in developing markets such as the Philippines and Malaysia, has focused on its partnerships with telecommunications firms in order to provide better access to its products and improved service in a digital age.
James Turner, chief risk officer and executive director at Prudential, agreed with these themes. Turner added that a burgeoning middle class may see increased wealth — but on the health side, also a surge in chronic diseases such as type two diabetes. For Prudential, inclusion means both financial and protection inclusion. The company therefore launched protection products in Singapore which offered tools for critical illness — providing protection for those who were previously uninsurable.
Franz Hahn, chief executive of Peak Re, touched upon the importance of ILS and how Hong Kong is well placed to build up an ILS market in the city. He added that not enough has been done to increase P&C penetration in emerging markets. All of this has a common purpose of supporting the emerging middle classes in Asia and Hong Kong – and finding enough capacity for these societal needs and protection – which is why the establishment of an ILS market matters.
As Moses Cheng, chairman of the Insurance Authority noted in his opening remarks, it is imperative to address the uneven distribution of wealth and include all sectors of the community. He said that only when society is protected, can it collectively best respond to financial shocks and crises.
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