Liem Phan, Head L&H Re SEA & India at Swiss Re, highlights important trends and developments in life and health insurance in APAC:
Smriti Pandey: What are the key trends in life and health insurance in the APAC region that contrast with global trends?
Liem Phan: APAC is a diverse and dynamic region with markets at various economic conditions and stages of development. In general, the trends in life and health insurance in APAC are in line with the global ones, but we have also seen some developments that are more prominent in APAC, given the significant demographic shifts and societal changes across the region.
Swiss Re Institute (SRI) projects that the retirement savings gaps for India and China will grow at faster rates annually (10% and 7%, respectively) in the years until 2050, compared with advanced economies like the US (4.7%) and Japan (2.5%), due to rapid population ageing and the growing middle class. The gap for 6 advanced economies (Australia, Canada, Japan, Netherlands, UK, and the US) and China and India was estimated at $106 trillion in 2022, and is expected to reach $483 trillion by 2050.
Insurance plays an important role in building resilience for people’s retirement. The surge in interest rates to 15-year highs will provide life insurance and pension products a tailwind to much better tackle the retirement savings gaps. We expect the life savings market in APAC to expand significantly as a growing middle-class adopts retirement planning and incomes in emerging markets rise. SRI forecasts the life savings premiums of 8 markets (Australia, Hong Kong, India, Japan, mainland China, Singapore, South Korea, and Taiwan) in APAC will reach $1.4 trillion by 2034.
The Indian market will see the highest annual growth rate of 9.5% (CAGR 2024-2034), followed by mainland China (7%), Hong Kong (6.2%), and Singapore (5.8%). Reinsurers can help life insurers seize these opportunities by freeing up capital, boosting underwriting capacity, and focusing on product innovation for capital-light growth.
In contrast with the higher interest rates environment globally, the Chinese government’s decision to lower interest rates for life insurance products will have a varied impact on the life and health insurance business in China. It may temporarily pressure premium growth as the new products may be less attractive. However, in the long run, this aligns with the goal of reducing systematic risks in a low-interest-rate environment, vital for the sustainability of China’s life insurers. Swiss Re is well-prepared for the challenges of a low-interest-rate environment. We have a history of success in diversifying our investment portfolio, innovating new products, and maintaining a strong capital base to weather potential challenges.
What are some of the most significant life and health insurance product innovations that have recently emerged in the APAC region?
The evolved consumer attitudes towards health and lifestyles, combined with the digital transformation, will shape the (re)insurance industry’s role today in a consumers’ life tomorrow. We are no longer just reactive protectors, but future-ready partners accompanying consumers on their life journey.
The focus of insurance has shifted from protection to prevention. Programs that empower people to take control of their health and well-being create a win-win situation, for people and for insurers. Swiss Re works with clients to build prevention strategies such as early cancer detection, smoking cessation, nutrition-driven metabolic health programs, and health optimisation programs.
Early this year, Swiss Re collaborated with the iAPPS Health Group (iHG) and Singlife to launch a new group insurance plan in Singapore – iSure – designed to incentivize individuals to proactively manage their health and wellbeing. It offers a 50% fee refund for the Health Optimization Program if normal health results are achieved after the optimization program, thus promoting proactive health management.
How has consumer behavior towards life and health insurance in the APAC region shifted in the last 3 years? What factors are driving these shifts?
Swiss Re’s consumer survey found that the covid-19 pandemic has lifted people’s risk awareness. Respondents indicated rising intentions to buy insurance or augment existing policies, to prepare for future challenges. Insurance buying intentions are also higher among younger populations, with one in three people aged 18-29 and 30-39 saying they would do so.
One notable trend is that mental health’s importance has surged as people re-assess priorities. One-third of respondents reported deteriorating mental health, and respondents in most markets cite a rising awareness of mental wellbeing.
Consumers also call for digital engagement. Findings indicate a steady rise in the proportion of APAC consumers turning to digital health management touchpoints such as health and wellness apps, or online portals to research or manage insurance policies. Around half (46%) of regional consumers expressed openness to purchasing coverage from insurers’ apps and websites. Consumers in emerging Asia are also among the world’s most willing to share their personal data with insurers, with 58% of those in Vietnam and 48% in India open to doing so even without explicit incentives.
These trends represent opportunities for insures to innovate and narrow the insurance protection gap. Insurers should consider adapting to digital-first innovations that offer more personalized and engaging customer experiences. By utilizing new data sources, insurers can improve accessibility and innovate product offerings that meet the evolving needs of today’s consumers, including helping improve consumers’ mental resilience.
What are the 3 most impactful regulatory changes in the APAC region on life and health insurance?
APAC is going through rapid regulatory changes, where majority of the APAC markets have adopted new regulatory solvency regimes or are planning to do so in the coming years, such as South Korea’s introduction of the Korean Insurance Capital Standard (K-ICS), Japan’s new economic value-based solvency regime in 2025, India’s risk-based supervisory (RBS), and upcoming Risk-Based Capital (RBC) rollouts in various markets. Meanwhile, many markets are also working towards adoption of new accounting systems like IFRS 17.
These regulatory changes create challenges for optimal capital reserving and new operational considerations. We expect to see more opportunities for reinsurers to support life insurers. As a powerful capital management tool, reinsurance not only helps insurers meet regulatory requirements more efficiently, but also supports both in-force portfolio optimisation and new product innovation. Reinsurance can assist in these objectives by stabilising a life insurer’s balance sheet, reducing earnings volatility, increasing capital efficiency, and simplifying risk management operations.
In which countries are governments giving the maximum push to boost life and health insurance? In what ways?
India is one of the markets that have seen strong regulatory support. In 2022, IRDAI launched ‘Insurance for All’ – a target to ensure that every Indian person and enterprise will have appropriate life, health, property, and other insurance protection by 2047.
The Indian regulator is also actioning other initiatives to raise insurance penetration, including extending ‘use-and-file’ procedure to individual and Group Unit-Linked products, putting together a taskforce with representatives from banks and insurers to make the bancassurance channel more efficient.
According to Swiss Re Institute’s Life & Health Insurance Inclusion Radar study, which considered the degree of inclusivity based on the Availability, Accessibility, and Affordability dimensions, India ranked 6th most inclusive among the 16 markets covered, led by the US, Japan, Canada, South Africa, and UK. India’s inclusivity strengths relative to other markets are high use of financial services and strong regulatory support. With the initiatives from the IRDAI to increase insurance penetration, India should become more inclusive over the medium term.
Give 3 recent examples of the impact of AI and data analytics on L&H business in APAC.
Digital technology is enhancing the efficiency across the insurance value chain, enabling better risk insights for decision-making, accelerating product development cycles, and improving customer journeys.
As one of the key technology advancements, AI is becoming an increasingly important backbone for innovation. One tangible example is Swiss Re Life Guide Scout, a Generative AI-powered underwriting assistant, developed by Swiss Re, that integrates Microsoft Azure OpenAI Service. It combines trusted and dependable insights from Swiss Re’s Life & Health underwriting manual Life Guide with the ease-of-use of Gen AI. It aims to help increase the efficiency and quality of underwriting by generating swift answers compiled from curated expert knowledge in response to questions asked by the underwriter in natural language. Swiss Re Life Guide Scout is launched as a pilot programme in English. A wider roll-out is planned for later this year.
With the support of innovative technologies and powerful data models, Swiss Re also helps insurers evolve their businesses and improve their performance. Swiss Re partnered with Wysa to launch Wysa Assure, an AI-driven mental health support app. It combines Swiss Re’s risk knowledge and proprietary scoring with Wysa’s AI mental health tools, catering to insurers and their clients. This innovation promotes proactive mental health management and early intervention, potentially reducing claims for insurers. Wysa Assure is available to existing and new MLC Life Insurance retail customers through its Vivo program. To help more customers improve the efficiency and quality of underwriting, Swiss Re and Appian extended partnership to introduce Connected Underwriting for Life Insurance in APAC in early June. Integrated with Swiss Re’s automated life insurance underwriting solution, Magnum, the Appian Connected Underwriting Life Workbench accelerates the life insurance underwriting process and improves underwriters’ productivity and experience on one system, while connecting data from any source to provide 360-degree analysis of individual and portfolio policies with different risks profiles and tolerance levels.
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