Fuelled by strong economic growth and increasing urbanisation, life insurers in Asia-Pacific have experienced strong growth in the past decade. With low interest rates here to stay, increasing volatility in investment markets and Risk-based capital regimes becoming prominent in most markets, insurers need to re-examine how they can create value for their customers whilst delivering attractive returns for shareholders.
The inforce book contributes a relatively large share of the profit, revenue and operating cost but in the race for new business, has not received adequate scrutiny. In our view, there are three broad categories of actions that APAC insurers can take to maximize value of their Inforce portfolios: Customer, Cost, and Capital. All of them should be explored in a coordinated effort as part of the broader inforce management programme.
Oliver Wyman’s 3Cs of Inforce Value Optimization
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