Greater use of technology and third-party support is significantly enhancing risk visibility for insurers in the Asia-Pacific (APAC) region, according to new research by Clearwater Analytics. The study, which surveyed insurance asset management executives managing a total of $3.82t in assets, found that 75% of respondents reported improved risk visibility over the past two years, with 95% rating their firm’s risk visibility as excellent or good.
The improvement is largely attributed to platforms that integrate data from multiple sources and the ability to adapt models and analytics to changing market conditions. Regulatory compliance demands are a major driver of technology spending, making enhanced risk visibility a business imperative for APAC insurers.
Executives from life and health insurers, general insurers, and third-party investment firms in Hong Kong, Singapore, and Australia highlighted the role of specialist third parties in improving risk visibility. Over the next 12 months, 73% of APAC insurers expect significant increases in risk/reward levels for private equity and venture capital.
However, 18% of firms reported a decline in risk visibility, citing sophisticated investment strategies and a broader range of asset classes as contributing factors. Notably, 40% of third-party firms experienced a decline, compared to just 6% of life/health firms and 2% of general insurers.
Shane Akeroyd, Chief Strategy Officer and President of Asia Pacific at Clearwater Analytics, stated, “APAC insurers are working hard to improve risk visibility with technology and support from specialist third parties key to the improvements over the past two years.” The study underscores the importance of technology and data integration in navigating regulatory pressures and expanding investment portfolios.
