Four ways insurance businesses can succeed in emerging markets in 2023

In 2023, the insurance industry has a real opportunity to adapt, innovate & thrive to meet consumers.

Four ways insurance businesses can succeed in..

In 2023, the insurance industry has a real opportunity to adapt, innovate & thrive to meet consumers.

Date: 09 February 2023
Author: Janthana Kaenprakhamroy

According to research by the Swiss Re institute, the market share of global insurance premiums in emerging markets is forecast to increase by 50% over the next decade, making them an attractive prospect for insurance companies looking for new opportunities to grow globally. 

With access to potentially millions of new customers, the possibility of a sizable increase in sales and the opportunity to capitalise on previously untapped new and thriving economies, the benefits of expanding into emerging markets should not be underestimated.

However, there are a host of novel challenges to be overcome when working in new markets, as well as a list of potential pitfalls for consideration in 2023. 

It’s likely that many of these will be issues not faced before, as doing business abroad is significantly different to doing business in the UK. 

The rewards are extensive so if you’re ready to take on the challenge here are four things to do to ensure business success this new year. .

1. Research the latest local regulations

As we all know, the insurance industry is a highly regulated one, with many different legal and compliance rules varying between products and sectors. 

The compliance burden is compounded further when looking to launch products in emerging markets as each territory has vastly different rules for trading. 

Beyond product compliance, there are local regulations for taxes, employment, licensing and a whole host of other rules that are location specific and growing all the time.

Not getting these right from the start could result in significant, or even critical, problems further down the line. 

Work with local teams and the Department for International Trade to understand the procedures and processes required to navigate the regulatory landscape for the territory you are looking to expand into.

The good news is that increased regulation is actually helping to increase insurance coverage within emerging markets, fuelled by the adoption of international solvency standards. 

As emerging markets embrace these new standards, consumers receive further protection, financial stability and build their trust in insurance companies, helping drive the opportunity for more insurance providers in these places.

2. Create a diverse team

To run a successful international business, it’s important to have a team that reflects the global consumer. It’s vital to fully understand the different cultures you are selling into and how to communicate effectively with them. 

The most powerful way to do this is by diversifying your own team, recruiting talent from on-the-ground to help break down barriers, remove cultural biases and overcome stereotypes, enabling easier entry to new markets.

Insurance businesses looking to branch out into unfamiliar countries will find invaluable support from forging local partnerships with businesses, recruiters and educational institutions. 

These collaborations are essential when it comes to bridging the talent gap, providing a wealth of skilled employees whose local knowledge, access to networks and lived-experience will prove indispensable in the international team.

3. Invest in technology

The rise of global connectivity makes having reliable technology solutions particularly important when it comes to doing business in emerging markets. 

When it comes to communication and relationship building, it’s vital to ensure connections are dependable to enable productive and efficient conversations with key contacts in different countries.

Alongside the day-to-day efficiency benefits of having good tech, using technology in insurance can help improve the affordability of products, allow access to new risk pools and, ultimately, make businesses more profitable. 

However, it’s important to note that the adoption of technology is not consistent across emerging markets, meaning you’ll need to remain adaptable depending on which territory you’re working in.

A key consideration when it comes to technology is to ensure that your systems are mobile-friendly. 

Statistics from this year have revealed that the number of smartphone users in the world today is 6.648 Billion, which is 83.40% of the world’s population, representing a significant communication tool for consumers and their insurance providers, as well as partners across the globe.

4. Be flexible and let go of certainties

Insurers who want to find success in emerging markets will need to become comfortable with uncertainty. 

While these markets are growing, there will be fluctuations and waves to ride out as they evolve. Long-term success will be found by insurance companies who are prepared to adapt with the markets.

As well as grit and determination, companies expanding globally must remain flexible. Emerging markets are rapidly changing and refusing to adjust plans alongside may prove damaging for the business. 

A broad risk appetite is useful here as it’s likely the gap between long-term planning and short-term profits will increase. Being able to pivot plans, products and expectations will help the business remain agile as it adapts to the changing landscape of new markets.

The global economy is undergoing an exciting time of innovation right now. Global connectivity, access to technology and growing investment are all combining to enable advancements in not just developed markets, but emerging ones too. 

The opportunities for businesses looking to become multinational are many and varied, and, as barriers between cultures continue to be broken, the insurance industry has a real opportunity to adapt, innovate and thrive to meet consumers in these new economies.

About the Author

Janthana Kaenprakhamroy is the CEO and Founder of Tapoly, an award-winning Insurtech providing business insurance for SMEs and Freelancers and insurance technology solutions. 

Janthana was named Insurance Woman of the Year at the Women in Finance Awards 2021, was listed by Forbes as number 6 of the Top 100 Women Founders to watch and was named in the Insurance Business UK’s Elite Women List 2022. Janthana is a chartered accountant and former internal audit director at top-tier investment banks.

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