Consultants sound insurance alarm

AsiaƆs insurance industry needs to focus on IT if it wants to keep up.

Consultants are urging Asian-based insurers to focus on automation and building new channels to reach customers other than agency sales forces if they are to survive. Chia Tek-yew, partner at PriceWaterhouseCoopers in Singapore, says insurers are lagging behind banks and fund managers when it comes to gathering assets. For example, he notes the average insurance company in this region budgets $20-50 million annually for information technology. Banks and fund managers often have budgets of $200-300 million.

Alan Mason, senior manager at Ernst Young in Hong Kong, says pressures of too much competition will force many players out of the market in the next few years. He fears the industry in Hong Kong...

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