The Insurtech Race - Jump in Potential Acquisitions and JVs Between Big Insurance and Tech Start-Ups
Asia Pacific-based insurance companies, from established players to new entrants, are increasingly looking to acquire or partner with non-insurance tech players to understand and harness the opportunities inherent in insurtech. Asia Pacific Guide for Investing in Start-ups, a new guide by leading global law firm Baker McKenzie, serves as a comprehensive handbook for insurance companies when contemplating an acquisition, partnership or joint venture in the insurtech space.
Singapore-based fintech and insurtech adviser Stephanie Magnus, a Principal at Baker McKenzie Wong & Leow, said: " Insurance companies are playing catch-up. They are lagging behind their financial services peers in technology implementation. We expect to see insurtech incubator and accelerator programmes to produce key acquisition and JV targets for our big insurance clients, and expect this to remain an exciting space for business tie-ups over the next 18 to 24 months."
Brian Chia, head of corporate and commercial practice at Wong & Partners, member firm of Baker & McKenzie in Malaysia, added: " This is strategically important for insurance companies. They are motivated to explore new distribution channels, product offerings, as well as risk assessment and management capabilities that are made possible by insurtech. With increased margin pressure, insurance companies need to join the insurtech race to stay in the game. "
As the insurtech sector continues to heat up, wide variations in regulatory approach to insurtech investment and utilization exist. Insurance companies in Asia Pacific are facing a "labyrinth" of regulations as they increase investment in the insurtech space.
Commenting on investing in insurtech start-ups, Dr. Isabella Liu, Intellectual Property Partner at Baker McKenzie in Hong Kong, said: "In addition to regulatory challenges, particularly in areas such as telematics, biometrics and big data, insurance companies are challenged by other considerations in relation to data privacy, cross-border data transfer and intellectual property protection around insurtech investment."
The Asia Pacific Guide for Investing in Start-ups identifies and clarifies what makes or breaks a deal in relation to investment criteria, corporate approvals, corporate governance,
connected transactions, remuneration structure, intellectual property and data privacy across 11 jurisdictions in Asia Pacific. It helps insurance companies steer through ambiguity
and uncertainty, and gain visibility into what is possible in the region’s complex insurtech transactional landscape.