The insurance industry is set for a shake up and could be on the verge of significant expansion in emerging markets if it sheds old processes and embraces ground-breaking technology in 2018, predicts Tinubu Square, a leading provider of trade credit risk management solutions.
Against the backdrop of increasing worldwide premiums and growth opportunities being restricted by entrenched practices, Tinubu Square believes that the international insurance sector will start to cross the chasm in 2018 and tap into vital geographies and market segments that are currently underserved, although global growth in the market remains strong.
The company, which works closely with insurance organisations across the world, believes that with a more outward-looking and bold approach, there is a massive prospect for expansion, particularly outside the core European markets.
“Insurance businesses in North America, for example, are currently missing out on the massive emergence of global trade prospects in emerging markets such as the Far East, Latin America, India and parts of Asia Pacific and Africa,” said Jérôme Pezé, CEO and founder of Tinubu Square. “Exporters must be eyeing these markets and looking for ways to maximise the opportunities whilst mitigating their risk.”
To grab this chance at greater market share will require some operational and service changes, and amongst these, Tinubu Square suggests the industry needs to face up to the challenge of disruptive digital technologies and embrace the positive impact of digitalisation on payment and settlement solutions, the supply chain and data analysis. It predicts that in 2018 the technologies that will particularly make a mark are blockchain, big data and advanced analytics.
“The main worry for insurers is that critical mass is no longer the key competitive advantage and the domination they once had over valuable customer databases has been diluted by new entrants to the market who have found work-around solutions. The insurance industry needs to work with technology providers so that digital transformation can take place and with the right checks and balances in place, insurers should not be afraid to embrace technology progress,” said Jérôme Pezé.
Some insurance companies are already partnering with third-party technology providers to source invaluable local market intelligence and insight on local buyers, particularly in emerging markets or territories with low credit insurance penetration. Tinubu Square foresees that this practice will grow in the year ahead, particularly amongst smaller insurance companies looking to compete with the major and mid-size players.
“Now is the time for insurers to embrace technology that delivers more accurate intelligence and start honing arguments about why credit insurance is needed in these vast emerging geographies.” Pezé concluded.
In October, Tinubu Square announced an investment of €53 million to accelerate the development of its technology solutions for credit and surety insurers, trade finance banks and export credit agencies. The equity capital increase will enable Tinubu Square to pursue growth in areas where the company already operates (Europe, North America and Asia-Pacific), evolve its solutions and open up new market segments.