The last few years have been difficult for almost every industry, including insurance. Despite the challenges posed by the pandemic and other regionally impacting headwinds, such as China's extended economic slowdown or the war, emerging Southeast Asian (SEA) markets are experiencing tremendous growth in insurance. Based on research by Infosys consulting, we anticipate that there will be a 9-11% year-on-year growth in Gross Written Premiums (GWP) across the region until 2025, contributing to an additional USD $34-$40 billion in GWP.

Factors influencing the growth of insurance:

• Accelerated economic and GWP growth in emerging SEA: We examined five rising Southeast Asian nations that account for 97% of the region's GDP: Indonesia, Thailand, Malaysia, Vietnam, and the Philippines. Overall, insurance spending decreased because of the financial difficulties brought on by the global pandemic. Prior to the pandemic, the total GWP increased by 7.1% yearly (in USD) between 2016 and 2019. It decreased by 1.1% between 2019 and 2020. In 2021, the cost of insurance climbed 6.8% after the pandemic. Vietnam and Indonesia are anticipated to be the development engines, accounting for almost 50% of the five countries' combined growth.
• Increasing insurance awareness and penetration: The pandemic's persistence, with its multiple waves and a growing number of variants, has kept health issues, including insurance, in the public eye. Except for Vietnam, we forecast moderate growth in insurance penetration. The current low baseline, strong economic recovery, legalisation of online insurance, urbanisation, growing middle-class population, and easier access to insurance, particularly through the bancassurance channel, are expected to drive a 30% increase in insurance penetration in Vietnam by 2025.
• The advent of the digital insurance consumer: In many ways, emerging APAC markets have surpassed developed APAC markets in terms of digital adoption. In 2022, for example, 43% of people in emerging markets managed their policies digitally, compared to 23% in developed markets. Consumers in emerging Southeast Asia expect digital interactions that are integrated with human interactions with an agent or a broker. While many survey respondents express an interest in purchasing insurance through an online channel, only 25% of those who express an interest in purchasing insurance online actually do so.

Our analysis of the success stories in the region highlights three high-impact opportunities for insurers to grow at a market-beating rate: personalised customer experience, distribution, and the ecosystem. Even product innovation has a play. In addition to the three high-impact opportunities, we identified several other opportunities to improve their market position.

• Personalised customer experience is a digital and analytics-driven approach to increasing insurance income, GWP, customer satisfaction, and cost-to-income ratio. Targeted and tailored messaging from marketing through sales, underwriting, claims, and the rest of the customer journey has proven its value in the region. Emerging Southeast Asia is generally favourable in sharing their data for personalised experiences, and they have adopted mobile and digital technologies to match or even beat the developed APAC. A leading life insurer in Malaysia implemented computer vision, face recognition, and video call technologies to bring down its customer onboarding timeline to just 5 minutes on its agents' platform. The life insurer was able to capitalise on the Covid disruption and outgrew its competitors to become the fastest-growing insurer in Malaysia. 
• Distribution and sales in the region are largely driven by agencies and brokers. Individual customers still want a human to explain the relatively complex insurance products. Companies can train and provide digital tools to agents and brokers and a digital customer experience through an intermediary to drive growth. For instance, a major life insurer in Thailand used artificial intelligence (AI) to identify high-potential agents early and created customised development paths for them. This program identified agents that were four times more active than other agents, which led the insurer to increase its market share by 383 basis points. Ecosystem participation, including bancassurance, is prevalent throughout the region. Providing the right offers and tools for the right partners and through the right ecosystems is critical for growth.
• Product innovation provided two growth opportunities in the insurance sector to improve response to market changes and relevancy. The most agile insurers were able to release new products covering Covid-related risks. Financial and insurance literacy has not kept pace with the rate of digital technology adoption; targeted, customer-friendly products have been a successful driver for insurers to penetrate the previously uninsured segments. We expect that the product portfolio requirements will increase substantially, in the future, from modularisation, disaggregation, parametrisation, and personalisation. Hence, insurers must create an innovation pipeline with an industrialised approach for each stage, from idea incubation to prototyping, market testing, market launch, and scaling. A unique example of an innovative product offering includes the "Drive Less, Save More" add-on for motor insurance in Malaysia, which allowed customers to accumulate up to 30% cash rebates for driving less than 5000km per year during the pandemic. Consequently, the insurer was able to grow 14 times the average industry growth rate. 

To outperform the market in emerging Southeast Asian markets, insurers must focus on personalised customer experience, digital omnichannel across the end-to-end customer journey, and customer-friendly product innovation. Success stories from these countries bolster the recommendation supported by global and regional trends.

We have seen tremendous growth for insurers that have taken action to capitalise on these opportunities. The requirements and prioritisation are determined by the insurer, the market, and, most importantly, the ambition of the leadership. For insurers seeking transformations, they will need laser-focused interventions and enterprise-wide step changes, which may be through internal resources or via partners who bring specialised skills to realise those capabilities.