Insurers both old and new across Asia-Pacific are increasingly seeking M&A or partnership opportunities with technology companies outside the insurance sector, in order to understand and capture the opportunities embedded in insurtech. On March 13, 2017, leading global law firm Baker McKenzie (hereinafter "Baker McKenzie") released its latest "Asia-Pacific Start-up Investment Guide", aiming to provide insurers with a comprehensive handbook on M&A, cooperation and joint venture opportunities in the insurtech space.

        Stephanie Magnus, a fintech and insurtech expert and partner at Baker McKenzie's Singapore member firm Baker McKenzie Wong & Leow, said: "Insurers are working hard to catch up. They lag behind their peers elsewhere in financial services in technology adoption. We expect insurtech incubator and accelerator programs to provide important acquisition and joint venture targets for our large insurance corporate clients, becoming a consistently active platform for inter-company cooperation over the next 18 to 24 months."

        Brian Chia, head of the corporate and commercial practice at Baker McKenzie's Malaysian member firm Wong & Partners, added: "This is of significant strategic importance for insurers. Insurers are actively exploring new distribution channels, product issuance models, and risk assessment and management capabilities, and insurtech makes all of this possible. Given mounting profit pressure, insurers urgently need to enter the insurtech arena in order to survive in the industry."

        As the insurtech sector continues to heat up, regulatory discrepancies in insurtech investment and application are gradually coming to the fore. As Asia-Pacific insurers keep increasing their investments in insurtech, they are facing an intricate regulatory landscape.

        Speaking about investment in insurtech start-ups, Liu Fangjun, an intellectual property partner at Baker McKenzie Hong Kong, said: "In addition to regulatory challenges, insurers also face issues arising from insurtech investment such as data privacy, cross-border data transfer and intellectual property protection, especially in areas such as telematics, biometrics and big data."

        The "Asia-Pacific Start-up Investment Guide" identifies and explains the factors that make or break a deal across 11 Asia-Pacific jurisdictions, including investment criteria, corporate approvals, corporate governance, related-party transactions, remuneration structures, intellectual property and data privacy. The guide points the way forward for insurers amid uncertainty, enabling them to see a viable path through the complex insurtech transaction landscape of Asia-Pacific.

Source: The Economic Observer Online, 2017-03-14