Embracing Adversity: Profiting from Challenges in Mature Asia/Pacific Insurance Markets

This Financial Insights report analyzes the complex developments taking place in the mature insurance markets of Australia, Japan, South Korea, and Taiwan. It categorizes these developments into structural changes, which involve basic movements in buyer power, supplier power, intensity of rivalry, other industry forces, and critical issues which may eventually result in structural changes. It is risky from a corporate survival and competitive strategy viewpoint for insurers to ignore structural changes such as demutualization and climate change and critical issues such as the need for a refresh of processing processes and technology. All of these changes and issues have the potential to cause significant monetary loss to insurers, and they arise from marketplace characteristics that will persist in the medium to long term.

"In mature insurance markets, the most effective corporate strategies are built on a clear identification and ranking of risks in the competitive environment coupled with a detailed action plan for meeting those risks. Generic strategies such as 'cost leadership' or 'niche establishment' aren't good enough," says Batara Siagian, senior research manager.