Developing Markets Require Unique Insurance Products

Developing markets, particularly in India and China, represent a vast market potential of currently uninsured individuals who, with growing wealth and assets, will require insurance in the coming years to protect and preserve their financial well-being. Insurance companies in developed economies that have built products to protect assets and health/life can be well positioned to respond to those needs. As a result, emerging markets represent a significant mid- to long-term opportunity for these carriers.

At the same time, the path to success in these markets will be easier for insurance companies that make the effort to understand the unique requirements of these markets. Creating new products and services that are both responsive and market-centric will ensure that insurance companies avoid the temptations to apply a one-size-fits-all approach to unique and emerging needs.

From a technology vendor's point of view, technology needs and opportunities for these emerging markets also are potentially very encouraging. For example, more than 100 new insurance companies -- many multinational joint ventures -- entered China in the past two years alone. Similarly, property and casualty premiums grew in China last year in excess of 20 percent. All of these companies need or will need to invest in technology.

An honest IT assessment by an insurance company spreading into a market such as China must consider whether its current systems would translate into a new, emerging market. If you were starting an insurance company today -- in the world of Web 2.0, cloud computing and data mobility -- could you build your infrastructure on a 25-year-old COBOL-based administration system that has difficulty, for example, handling Chinese characters?

Emerging markets suggest that the industry can learn from its current systems. At the same time, the market opportunities that present themselves in this new world will challenge companies to embrace a new IT paradigm.