Only 3 in APAC's 50 largest insurers were ready for the pandemic: study

Only AIA, Tokio Marine, and MS&AD considered a pandemic as a key risk to operations.

A study has found that insurers in APAC were inadequately prepared for a risk like the COVID-19 pandemic, highlighting the necessity for firms to rethink their risk management plans.

Only three of APAC’s 50 largest insurers by market cap—Hong Kong’s AIA Group, and Japan’s Tokio Marine Holdings and MS&AD Holdings—identified a pandemic outbreak as a key risk to their operations, according to a governance and sustainability report by accounting organisation CPA Australia.

The same study found that the use of analytics for managing risks and in internal audit remain at a nascent stage in the sector. Only eight insurance companies use analytics in managing risks.

On the upside, most insurers in the region have already increased their investments in artificial intelligence, machine learning and blockchain, the report noted.

But whilst leveraging data analytics and technology can improve risk management and help institutions make better strategies and other decisions, it also comes with increased security risks. To solve this, financial firms should consider recruiting technology experts when recruiting directors, said associate professor Richard Tan, one of the report’s authors.

Currently, at the board level, directors with technology expertise remain rare in the industry, according to the report. Only 20% of insurers have appointed directors with such relevant expertise.