Friday 15 March 2024 edition
• Embedded insurance still has sizable growth opportunities, including high transaction volumes in areas like e-commerce and SMEs.
• But experts warn that too many simple integration offerings could lead to consumer fatigue.
• Success will require relevance, clear customer value, and the right 'hook'.
• Cyber and high-value items are seen as examples of segments with huge growth potential but present unique difficulties.
• Gen AI and machine learning could personalise and improve embedded insurance offerings.
• New law, effective from July 2024, aims to curb anti-competitive practices in bancassurance.
• Amendments prohibit bundling non-compulsory insurance products with other financial services.
• Change follows consumer complaints about mis-selling of insurance, which led to a drop in consumer confidence and sales
• Life insurance premiums saw a drop of 12.5% in 2023, while non-life premiums saw a modest 2.4% increase.
• AM Best believes regulatory changes will initially slow bancassurance growth but ultimately restore policyholder confidence.
• AIA Group delivered 33% VONB growth to US$4.03bn in 2023.
• Net profit expanded 15% to US$3.76 billion in 2023.
• Hong Kong saw an 82% increase in VONB, driven by Mainland Chinese visitors.
• Mainland China's VONB grew 20%, with a 28% increase from February to December 2023.
• AIA Thailand and AIA Singapore reported VONB increases of 21% and 10% respectively; AIA Malaysia saw 7% growth.
• Negative consumer sentiment in Vietnam impacted AIA's 'Other Markets' segment, though excluding Vietnam the segment grew 15%.
• APRA and ASIC issued a letter to help insurers prepare for the Financial Accountability Regime (FAR), effective 15 March 2025.
• FAR aims to boost responsibility and accountability in financial institutions, including for senior executives and directors.
• In the letter, regulators outlined steps insurers should take to prepare.
• They also published an information package with guidance and templates and opened a consultation on a draft amendment.
• APRA and ASIC will support insurers with webinars in April to help clarify new requirements.
• NSW introduces legislation requiring insurers to share specific data.
• NSW is only mainland Australian state funding emergency services through an insurance tax, which is believed to be a key contributed to high premiums and low uptake.
• Government announced Emergency Services Levy (ESL) reform in November.
• Latest move aims to allow government to access anonymised data on insurance premiums and ESL component to help redesign emergency services funding.
• Fitch Ratings affirms Nippon Life Insurance Company's IFS rating at 'A+' and IDR at 'A', with a stable outlook.
• Post-Covid-19 recovery improved insurer's core profit margin to 13% in 1HFYE24.
• Company set to acquire nursing company Nichii Holdings for JPY210bn, with manageable integration risks.
• Insurer's statutory solvency-margin ratio (SMR) stood at 1035% and consolidated economic solvency ratio (ESR) at 240% as of September.
• However, significant investment in domestic equities presents a risk, with a risky assets ratio of 163% as of March 2023.
• Bolttech partners with Back Market, a marketplace for refurbished devices, on embedded insurance in Japan.
• 'Back Up', provides cover for breakage, corrosion, and liquid damage for devices, as well as free data recovery and dedicated repair for phones.
• This marks bolttech's second embedded partnership announcement this week, following Middle Eastern partnership with stc, a telecommunications firm.
Bryan is Lloyd’s incoming General Representative for Australia.
