The fragmented nature of Asia’s insurance markets combined with the large protection gap means the region can offer lucrative opportunities for technology companies with the ability to help close that gap.

That is the view of Stephan Tan, group chief strategy officer and chief executive officer of insurance solutions at bolttech.

Launched in Singapore in 2020, bolttech is deemed an insurtech “unicorn”, with a global footprint and a valuation of approximately $1.6 billion. It is backed by insurers including Tokio Marine and Metlife, and recently secured $246 million in funding, marking the largest equity series B for an insurtech. It plans to use the funding primarily for expansion into emerging markets.

In line with its growth strategy, in 2022 the company acquired Singapore-based insurance intermediary and specialist broker AVA Insurance Brokers and AVA Insurance Agency.

Tan is particularly bullish about the opportunities in Southeast Asia, where he sees a gap in the market due to the low adoption of insurance.

“There’s tremendous growth opportunity, especially within insurance distribution and infrastructure, and also on the underwriting side, because it’s not a harmonised market,” he said.

“In contrast to the US and Europe, Asia is different. It is still very fragmented, from country to country, and that builds many opportunities,” he explained.

According to Tan, some of the industry’s business models and mindset need a refresh. But some of the transformative shifts required cannot be championed by a single entity. “We need many more at the frontier to bring about a change. No one player can do that alone,” he said.

Overcoming resistance

Challenges do exist. One of them is the traditional mindset within the insurance sector. Tan explained: “The industry from a traditional underwriting perspective can be slow to change, and the regulatory environment is not making it easier, which means to make a big change we need to show distribution partners what can be done with insurance, educate the market about new ways and products to increase customer engagement.”

Not everything needs an overhaul, however. “I don’t think the entire underwriting system is broken. Insurance underwriters in Asia have a long track record of experience in pricing and risk assessment,” Tan said.

“I believe the focus should be on getting closer to the end consumer, aligning with evolving business needs.”

Despite technological advancements, Tan points out that digital insurance sales are still a novel concept in many parts of the region.

“People haven’t yet become used to purchasing insurance as part of the digital journey,” he said, adding that this is a big risk for companies developing the technology that might not gain immediate traction with users.

In terms of strategy, Tan believes that reinvention isn’t always the answer in the insurtech domain. Strategic alliances, mergers, acquisitions, and tapping into existing industry expertise can all be helpful.

“We are not trying to disrupt the industry, or the traditional insurance carriers, or compete with them. We’re here to enable new ways to reach the customer through collaborative efforts.

“We are not looking to build everything on our own. It’s difficult to achieve everything organically, and would take many more years to get there,” he said.

“Instead of multiple entities building similar structures, why not collaborate and build collectively?”