Janthana Kaenprakhamroy is the CEO and Founder of Tapoly.
With the market share of global insurance premiums in emerging markets set to increase by 50% over the next decade, insurance companies looking to grow their international customer base are presented with a golden opportunity.
But how should they go about successfully engaging customers in new markets and expanding their operations? The chance to enter previously untapped economies, reaching potentially millions of new customers and increasing sales significantly is not to be underestimated.
While the opportunity could be transformational for many insurance companies, getting it right and understanding how to navigate different business cultures is essential to achieving success.
In this article we share some useful starting points for insurers who want to seize the opportunity and enter new markets internationally.
- Know the regulations
It’s not news to anyone working in the insurance industry that it is highly regulated, with different legal and compliance considerations which must be applied across sectors and products as required. This is exacerbated when entering new markets as each has its own rules for trading, which tend to vary considerably. Beyond product compliance, there are local regulations for taxes, employment, licensing and a whole host of other rules that are location specific and constantly updated.
The impact of getting this wrong could result in significant problems further down the line. This can easily be avoided however by working with organisations like the Department for International Trade and local, in-country trade groups. These entities can help with all manner of things from understanding the market opportunity to outlining the regulations, procedures and processes required in the country or region you’re looking to enter.
The good news is that increased regulation is actually helping to increase insurance coverage within emerging markets, fuelled by the adoption of international solvency standards. When emerging markets embrace these new standards, customers too benefit as they receive further protection, financial stability and build their trust in insurance companies. In turn, this positive reputation for the sector makes it easier for other insurers to enter the market.
- Diversity matters
To achieve success on the global stage, you must have a team that is representative of the global customer you seek to serve. It’s essential to understand the cultures you’re working with, how to best communicate with customers, what the business etiquette is and how professionals locally go about doing things.
One of the most effective ways to do this and diversify your own team is recruiting talent from on-the-ground. This can be a really powerful way to break down barriers, remove cultural biases and overcome stereotypes. Ultimately making entry to new markets much smoother, even if training and onboarding is required at first.
Insurance businesses looking to branch out into unfamiliar countries will also find invaluable support from forging local partnerships with businesses, recruiters and educational institutions. These collaborations are essential when it comes to bridging the talent gap, providing a wealth of skilled employees whose local knowledge, access to networks and lived-experience could prove indispensable.
- Get connected
With the rise of global connectivity, having reliable technology solutions is critical when it comes to doing business in emerging markets. Without a reliable solution in place it’s impossible to have productive and efficient conversations with key contacts in different countries.
On top of the day-to-day benefits of robust communications channels, using technology in insurance can help improve the affordability of products, allow access to new risk pools and, ultimately, make businesses more profitable. However, it’s important to be aware that the adoption of technology varies across emerging markets, so you’ll need to be adaptable depending on where you’re working.
A universal trend across the globe however is the prevalence of ‘mobile first’ internet users. In fact, stats show that 6.648 Billion, which is 83.40% of the world’s population now own and use a smartphone. With this in mind, ensure that your systems are mobile-friendly, with the smartphone a significant communication tool for customers and partners around the world.
- Agile mindset
To succeed when expanding into emerging markets, you need to be comfortable with a degree of uncertainty. Expect the unexpected and be prepared for it as markets develop. There will be fluctuations and waves, which insurers with a long-term view will ride out, adapting to the market as it evolves to achieve success.
In addition to the stamina to withstand emerging markets, insurance companies expanding internationally must remain agile. Emerging markets can rapidly change so a broad risk appetite is helpful as it’s likely the gap between long-term planning and short-term profits will increase. Being able to pivot plans, products and expectations will help the business remain agile as it adapts to the changing landscape of new markets.
- Get ahead with Insurtech’s
In emerging markets, insurers can also gain a significant advantage by partnering with insurtech companies. These collaborations offer a range of benefits that can transform the insurance landscape. By embracing insurtech solutions, insurers can tap into innovation and advanced technologies that address industry challenges and create new opportunities.
This can help insurance companies to streamline operations, reduce costs, and mitigate risks through digital platforms, data analytics, and automation. Furthermore, insurtech firms provide valuable insights and predictive analytics, empowering insurers to make data-driven decisions and enhance underwriting accuracy. By embracing insurtech, insurers can stay ahead of the competition, adapt to evolving market dynamics, and unleash the full potential of emerging markets, while reducing overall risks.
Global connectivity, access to technology and growing investment are all combining to create huge opportunities for insurance companies in emerging markets across the globe. The possibilities for international expansion are many and varied as cultural and geographic barriers continue to be broken. Insurance companies which make a considered, well thought through entry into new markets, while remaining agile as they evolve will be those who succeed. Seizing the opportunity to adapt, innovate and thrive internationally, reaching new economies and customers, building reputation and increasing revenue.
About the author
Janthana Kaenprakhamroy is the CEO and Founder of Tapoly, an award-winning Insurtech providing business insurance for SMEs and Freelancers and insurance technology solutions. Janthana was named Insurance Woman of the Year at the Women in Finance Awards 2021, was listed by Forbes as number 6 of the Top 100 Women Founders to watch and was named in the Insurance Business UK’s Elite Women List 2022. Janthana is a chartered accountant and former internal audit director at top-tier investment banks.
