Aisan insurers to play insurtech catch-up with mergers, JVs
Asian insurers are likely to buy out or sign more joint-venture deals with insurtech firms as the region's carriers play technology "catch-up" with their financial services peers, according to law firm Baker McKenzie. The fintech transformation is leaving Asia's insurers "lagging behind" those in the rest of the world, said Stephanie Magnus of Baker McKenzie member firm Wong & Leow. "We expect to see insurtech incubator and accelerator programmes to produce key acquisition and JV targets for our big insurance clients, and expect this to remain an exciting space for business tie-ups over the next 18 to 24 months," Magnus said.

Global law firm Baker McKenzie expects to see a jump in potential acquisitions and joint ventures between large insurance players and tech start-ups in Asia.

Asia Pacific-based insurance companies, from established players to new entrants, are increasingly looking to acquire or partner with non-insurance tech players to understand and harness the new opportunities that insurtech can unearth.

The ever increasing margin pressures means insurance companies need to join and utilise the insurtech innovations to stay a relevant player in the game.

In addition to regulatory challenges, particularly in areas such as telematics, biometrics and big data, insurance companies are challenged by other considerations in relation to data privacy, cross-border data transfer and intellectual property protection around insurtech investment.

A Labyrinth of Regulations

With heightened activity expected in the Asian insurtech hemisphere, Baker McKenzie has produced the «Asia Pacific Guide for Investing in Start-ups», a new guide the firm hopes will be a comprehensive handbook for insurance companies when contemplating an acquisition, partnership or joint venture in the insurtech space.

As the insurtech sector continues to heat up, wide variations in regulatory approach to insurtech investment and utilization exist. Insurance companies in Asia Pacific are facing a labyrinth of regulations as they increase investment in the insurtech space.

«Insurance companies are playing catch-up, they are lagging behind their financial services peers in technology implementation. We expect to see insurtech incubator and accelerator programmes to produce key acquisition and JV targets for our big insurance clients, and expect this to remain an exciting space for business tie-ups over the next 18 to 24 months,» said Stephanie Magnus, a Principal at Baker McKenzie Wong & Leow.