Asia Insurers Urged to Close Growing Protection Gaps

Asia’s insurance industry is being urged to redefine its role as demographic shifts, widening protection gaps and rapid advances in artificial intelligence (AI) reshape customer expectations. Industry leaders say insurers that continue to focus primarily on selling products risk becoming increasingly irrelevant unless they evolve into providers of personalised financial planning, retirement solutions and healthcare support.

The issue was at the centre of discussions during the Asian Banking & Finance and Insurance Asia Summit held in Singapore on 1 July, where senior executives highlighted the mounting pressures facing insurers across the region.

Shrikant Bhat, Chief Executive Officer of AIA Group’s Unit-Linked and Pensions Business, said customers today measure value not by the number of products available but by how effectively insurers help them address life’s biggest financial and health concerns.

“Customers perceive value from a point of view of how well we are addressing their concerns, and longevity is probably one of the top concerns for customers today,” Bhat told delegates.

As people live longer, retirement planning has become increasingly complex. Bhat noted that customers are seeking financial security that allows them to maintain their quality of life throughout retirement, alongside healthcare solutions capable of supporting them as medical needs grow with age.

“The concern for customers is how they harness the longevity dividend. They obviously need financial assets that help them live a better lifestyle, they’re obviously thinking about health plans, healthcare as they age, and whether the adequacy of that. That’s where the value creation for customers is pretty high,” he said.

Demographic projections underline the scale of the challenge. Laurent Doucet, Partner for Insurance Asia at Roland Berger and moderator of the panel discussion, said Singapore’s old-age dependency ratio is expected to increase from around 20 per cent today to approximately 40 per cent by 2050. Japan’s ratio is projected to climb to about 75 per cent, whilst Hong Kong’s could approach 100 per cent over the same period.

Such trends are expected to place greater pressure on governments, pension systems and insurers alike, increasing demand for products that address retirement income, wealth preservation and rising healthcare costs.

Despite being one of the world’s wealthiest nations, Singapore continues to face a significant protection gap. Akhil Doegar, Group Head of Distribution at Singlife, argued that the insurance sector has concentrated too heavily on individual products rather than addressing customers’ broader financial needs.

He pointed out that Singapore has one of the world’s highest GDPs per capita, estimated at S$85,000 (US$65,555.06), whilst households save roughly 36 per cent of their income. Yet, despite this high level of wealth and savings, the country continues to experience substantial insurance protection and critical illness coverage gaps.

“If we are so rich, how come we are so underprotected?” Doegar asked.

According to Doegar, customers are not simply looking to purchase insurance policies. Instead, they want financial partners capable of helping them manage cash flow and financial risks throughout different stages of life, from starting careers and raising families to planning retirement.

Singapore’s life insurance market nevertheless continued to record healthy business growth. The Life Insurance Association, Singapore reported that total weighted new business premiums reached S$6.53 billion (US$5.2 billion) for the full year, representing an increase of 11.3 per cent compared with 2024.

The expansion was largely driven by stronger annual premium sales. During the fourth quarter alone, new business premiums rose by 13 per cent compared with the corresponding period a year earlier.

Investment-linked products remained the largest contributor to new business, accounting for 44 per cent of total weighted new business premiums in Singapore’s life insurance sector during 2025. The figures suggest sustained consumer demand for products that combine insurance protection with investment opportunities, although industry leaders stressed that stronger sales alone do not necessarily translate into adequate financial protection.

Artificial intelligence was another major theme throughout the summit. Panellists agreed that AI is likely to transform insurance operations, but they emphasised that technology should enhance rather than replace professional financial advisers.

Javier Lastra, Chief Executive Officer of Swiss Life (Singapore) Pte Ltd, said trust remains the industry’s greatest competitive advantage.

“The future is more human advice enriched by artificial intelligence,” Lastra said, adding that clients routinely share deeply personal and sensitive financial information with advisers, making trust indispensable to the relationship.

Pauline Sim, Head of the Strategy & Transformation Office and Acting Head of Bancassurance at United Overseas Insurance Limited, observed that insurers often face difficult trade-offs when designing customer-focused services. Delivering seamless experiences must be balanced with regulatory requirements, operational efficiency and the protection of sensitive personal data.

She stressed that maintaining strong security standards is essential if customers are to remain confident in sharing information with insurers.

Dennis Liu, Chief Technology Officer of Etiqa Insurance & Takaful, identified fragmented data management as one of the industry’s biggest operational weaknesses. Although insurers possess vast quantities of customer information, much of it remains scattered across different systems, limiting its usefulness.

“We have a lot of data everywhere, but the very challenge is we don’t use data effectively,” Liu said.

He argued that better integration and centralisation of customer data would enable insurers to provide more relevant services whilst reducing operating costs through automation. Savings generated through greater efficiency could then be passed on to policyholders in the form of improved value.

Etiqa has already introduced several AI-powered services, including automated travel delay claims processing, proactive customer outreach following fire incidents and crash detection technology that initiates claims support without requiring customers to report accidents first.

Looking ahead, executives agreed that the industry’s long-term success will depend less on product complexity and more on delivering meaningful customer outcomes.

Bhat said AIA is placing increasing emphasis on retirement income, wealth transfer and measurable customer outcomes rather than developing increasingly sophisticated products.

“We deliver outcomes. We don’t focus so much on how we do it,” he said, adding that technology can simplify insurance products for both advisers and customers.

Doegar echoed that sentiment, arguing that insurers should remain focused on narrowing Singapore’s protection and retirement gaps rather than pursuing short-term commercial gains.

“We have one job to close the protection and retirement gap in Singapore. If we stick to that path, we will naturally grow by doing the right thing,” he said.