Tag Archives: southeast asia

Easy Pickings in Southeast Asia

With GDP rates in SE Asia exceeding 6.3% per annum, with premium growth for life, accident and other policies higher than 13% last year in the region and with insurance penetration rates of 5% or less, we seem to be looking at a slow, fat rabbit.

But we don’t seem to be able to shoot it. Why?

See also: Innovation — or Just Innovative Thinking?  

While numerous global and regional insurance carriers have created venture capital funds, insurtech incubators and grand initiatives, the carriers’ fundamental view of the world has not changed. Consider the following: In 2016, there were approximately 75 deals in private tech investment by reinsurers and insurers, up from three deals in 2013. On the face of it, this is encouraging. However, of the total tech deals completed in 2016, more than 72% involved U.S.-based startups and only 12% involved ones in Asia. In other words, the fastest-growing markets of the world received only a fraction of the total tech investments from the insurance industry, which is not exactly transformational.

You can’t shoot even a slow, fat rabbit if you don’t aim at it.

If we assume an average of a $2 million for each of those private deals, this equates to $150 million in total capital commitments. Let’s be generous. If the average deal size was $10 million, the total industry commitment would have been $750 million, or less than .02% of the industry’s $4.5 trillion in annual premium.

Can you imagine a private equity firm like Blackrock investing only two-hundredths of a percentage point of its assets in products and ventures for the future? Neither can I.

In all fairness, it is not easy to disrupt the status quo in insurance.  After all, for well over a century, insurance was a game the house almost always won. Other than catastrophic events (hurricanes, tsunamis, floods, etc. — many of which are co-insured by local and federal governments), insurance has been a safe bet if, of course, you are the house.

In the face of change, many insurers have recently undertaken initiatives to break the mold. MetLife recently created LumenLab in Singapore, where a 7,800-square-foot facility is an incubator for innovative startups from outside the insurance industry. But with MetLife’s earning declining more than 19% from 2015 to 2016, is it enough? Aviva, a British multinational with more than 33 million customers across 16 countries, recently launched an initiative to encourage entrepreneurs to develop disruptive solutions. The mission statement reads: “Our mission is to connect with extraordinary talent, uncover breakthrough innovations and give those breakthrough innovations the opportunity to thrive.”  That’s very passionate, but what is the end game?

See also: Insurers Are Catching the Innovation Wave  

True innovation, transformation and disruption are cultural issues, and must be cultivated and encouraged from the top. Most insurance CEOs do not engage in high-altitude mountain climbing, scuba diving or any other extreme sport, nor do they hang out at the Google campus. Most importantly, they do not spend a lot of time in Bangkok or Shanghai. But they should, because that is where the new markets are forming.

There are, of course, exceptions to the rule. The first is Axa, which has created Axa Ventures, a true, well-funded venture capital subsidiary with a mission to invest in disruptive ventures that can actually get to market. The fund is led by Minh Tran, who has a successful history in venture capital and disruption. The second and less obvious group is Munich Re, based in Germany, which has launched numerous digital and venture initiatives. Germany has become a center for insurtech, and, while Munich Re’s efforts are, in my opinion, still not completely coordinated, it is clearly making a company-wide effort.

If insurance carriers want to lead the pack, they must embrace models similar to the one Axa has created, and they must make a corporate commitment to transformational change — especially in emerging markets. Disruption does not happen overnight, but it does happen. And, in a legacy industry ripe for change, it will happen sooner rather than later.

The question is whether it will be led from the inside or whether the industry will be dragged kicking and screaming into the future from the outside.

How to Think About the Zika Virus

Employers may be considering the risk posed by the recent spread of the Zika virus and potential claims filed by employees who contract the disease. The Zika virus is transmitted to people primarily through the bite of an infected Aedes aegypti species mosquito. These are the same mosquitos that spread dengue and chikungunya viruses. Mosquitos become infected when they feed on a person already infected with the virus. Infected mosquitos spread the virus to other people through bites. The virus can also be spread through blood transfusion or be sexually transmitted.

Where Is Zika Spreading?

Prior to 2015, Zika virus outbreaks occurred in areas of Africa, Southeast Asia and the Pacific Islands. In May 2015, the Pan American Health Organization issued an alert regarding the first confirmed Zika virus infections in Brazil. Locally transmitted cases were also reported in the Commonwealth of Puerto Rico. As of March 16, 2016, no mosquito-transmitted Zika cases had been reported in the continental U.S., but cases have been reported in returning travelers. Outbreaks are occurring in many countries, and the virus will continue to spread, but it is difficult to determine how and where. However, researchers who tracked dengue fever outbreaks in the past predict small local outbreaks of the Zika virus in Florida and Texas.

What Are the Symptoms?

About one in five people infected with the Zika virus become ill. Symptoms include fever, rash, joint pain, conjunctivitis (red eyes), muscle pain and headache. The exact incubation period (the time from exposure to symptoms) is not known, but is likely to be a few days to a week. The illness is usually mild, with symptoms lasting for several days to a week. The Zika virus usually remains in the blood of an infected person for a few days, but it can be found longer in some people. Severe disease requiring hospitalization is uncommon. Deaths are rare. Cases are identified by the symptoms, confirmation of recent travel to locales with confirmed infections and blood tests.

See also: Healthcare Case on Cutting Corners

How Is Zika Treated?

No vaccine or medications are available to prevent or treat Zika infections. An infected individual showing symptoms should get plenty of rest, drink fluids to prevent dehydration and take medicine such as acetaminophen to relieve fever and pain. Aspirin and other non-steroidal anti-inflammatory drugs (NSAIDS), like ibuprofen and naproxen, should not be taken until dengue can be ruled out to reduce the risk of hemorrhage (bleeding). An individual taking medicine for another medical condition should consult a healthcare provider before taking additional medication.

What Special Precautions Should Be Taken by Pregnant Women?

A mother already infected with the Zika virus near the time of delivery can pass the virus to her newborn around the time of birth, but it is rare. It is possible that the virus could be passed from mother to fetus during pregnancy. This mode of transmission is being investigated and is not yet understood. To date, there are no reports of infants getting the Zika virus through breastfeeding. The Centers for Disease Control and Prevention (CDC) recommends that women who are pregnant or trying to become pregnant use special precautions including avoiding travel to affected areas and using protective clothing and insect repellant. Women who are trying to become pregnant or thinking about becoming pregnant should consult with their healthcare providers before traveling to these areas and strictly follow steps to prevent mosquito bites during the trip. There have been reports in Brazil of microcephaly and other poor pregnancy outcomes in babies of mothers who were infected with the Zika virus while pregnant. Microcephaly is a medical condition in which the circumference of the head is smaller than normal because the brain has not developed properly. Additional studies are planned to learn more about the risks of Zika virus infection during pregnancy.

See also: Healthcare Quality: How to Define It

What Should Employers Do?

Businesses with employees traveling to areas of infection should follow the precautions outlined by the CDC, including preventative measures to avoid mosquito bites. If a workers’ compensation claim is filed for Zika virus exposure, it should be handled the same as any disease or exposure claim would be handled. A thorough investigation of the claim and circumstances involved should be conducted, and medical tests and evaluations should be done to confirm a diagnosis. Compensability determination would follow applicable regulatory standards for determining whether exposure occurred within the course and scope of employment.