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Subha Veluchamy

The APAC region is a combination of economies at various levels of development in terms of income demographics that have distinctive prospects. Insurers need to reimagine insurance and see it in a new light rather than use conventional policies that target the mass market. Personalization and pricing at just the right time will be the key to success for APAC insurers to integrate in their product development process in 2021.

Curating products with a unique value proposition

Sustaining microinsurance

Asia-Pacific is one of the largest markets for microinsurance, primarily driven by the increasing demand for microinsurance products and services in developing countries. This uptake in demand for microinsurance is due to the small installments of premium amounts from the economically weaker section, the digital native generation, and the favorable government initiatives, that are set up with an aim to further increase micro insurance penetration in the country. In 2020, the global microinsurance market attained a value of nearly USD 68.6 billion and is forecasted to reach about USD 100 billion by 2026.

Insurers need to leverage new channels, partners, and cutting-edge technologies for innovations in microinsurance to capture the untapped market segment. Here’s an example: A bite-sized, stackable insurance coverage integrated certain everyday activities, like taking the bus or going for a walk. These triggers activate a microinsurance purchase from as little as 30 cents and stack up over time to determine the coverage amount for an insurance period of 360 days. Also, microinsurance applicable to the new-generation lifestyle, such as e-wallet theft and loss, device protection, and data breach is becoming increasingly popular.

Future for UBI (usage-based insurance) is gleaming

According to a recent study by Ptolemus, Asia-Pacific, led by China, will account for more than half of the forecasted 60 million mobile UBI subscribers worldwide by 2025. The COVID-19 pandemic can indeed become a stimulus for customers to consider UBI, and insurers can expect a considerable shift in customers’ needs from traditional insurance to UBI in the future.

Usage-based pricing era for insurance is enabled with the advancement of IoT, telematics, 5G, AI, and big data analytics. These top-notch technologies have the potential to transform the property and casualty (P&C), life, and health insurance industries.

Here’s an example worth highlighting- Thaivivat, an insurance company based in Thailand, has chosen AIS NB-IoT motor tracker to introduce the world's first insurance policy that turns on coverage when the car starts, and turns off when the engine is shut down.

A lifeline for the gig workers

As per a survey conducted by Zurich Insurance in 2020, nearly 40% of full-time workers in Malaysia are looking to enter the gig economy. People with secondary education and women, especially with family responsibilities, tend to join the labor market through gig employment. As the number of gig workers has risen exponentially in the recent years, Asia-Pacific countries have started nudging insurance companies to provide personal accident and savings insurance for the new workforce structure (e.g., Uber, Grab, Food Panda, and more).

We witness regulatory initiatives underway across Asia to safeguard the rights of the gig economy workers. For instance, the PenjanaGig program in Malaysia is a government assistance initiative to ensure the social security and welfare of self-employed persons in the gig economy.

Benefits to insurance providers

Here are the benefits of curating products with a unique value proposition:

  • Portfolio diversification by entering a new market with new products and processes can positively impact the overall business health.
  • Improve market penetration and reputation for low-income group population, and a new generation of digital natives will bring positive associations to the brand name and value.
  • Taking on sustainability by improving the practice of pay-per-use business models and adding value to them.


To sustain and grow in the future, it is imperative for insurers to tweak their current product structures, portfolios, and insurance value chain processes to introduce innovative microinsurance or usage-based insurance products. Insurers must leverage the latest technology to addresses the needs of the emerging segments of consumers. The future insurance industry will bring more curated products with a unique value proposition to the market, that seamlessly adjust coverage based on the evolving needs of their customers and uncover untapped market segments.

About the author

Subha Veluchamy
Subha Veluchamy is an insurance domain consultant, part of New Growth Markets business unit focusing on Asia-Pacific. She works closely with TCS Industry Advisory Group to serve business growth. She has over 17 years of experience in IT consulting, advisory, and has worked with several of TCS’ insurance clients around the world. Her areas of focus include new business and underwriting excellence, speed to market, product development, business process re-engineering, and core system transformation. She holds a Master's degree in Engineering from the College of Engineering, Guindy, Chennai.
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