How AI and digitalisation are driving growth in Asia’s insurance sector

Asia is the epicentre of growth in the global insurance industry, with urbanisation, a rising middle class, and digital inclusion expanding demand for protection and wealth solutions at a rapid pace. Over the next decade, Asia is expected to add USD1.25 trillion to the life-insurance premium pool alone — more than half the worldwide total.¹

In this new digital era, the insurance sector is being transformed with changing customer demands and the rise of new technologies. Insurers are rethinking their approach to distribution, payments and customer engagement to unlock greater efficiencies and new opportunities.

Artificial Intelligence (AI) is transforming the insurance industry, driving change across the entire value chain. AI enables hyper-personalised, real-time quoting by analysing a wide range of data points, such as credit scores and claims history, to build precise customer risk profiles. In claims management, AI is reducing the need for human intervention in standard cases and allowing advisers to focus on more complex scenarios.²

This comes as a study by EY found that 55% of insurers believe that AI could facilitate savings of anywhere between 11%-20% over the next two years,³ all at a time when the industry is grappling with various cost pressures.

Digital sales channels, for example, allow insurers to expand into new markets and client segments at a lower cost. Across Asia, insurance products are increasingly available through digital ecosystems, often bundled with payments or e-commerce transactions.⁴ These emerging distribution channels include gig economy platforms, health and wellness organisations, lifestyle service providers (such as utilities, telecom, and travel), organised social media communities, and automotive brands.

As well as reducing costs and improving market access, digital distribution processes provide additional benefits for insurers from real-time insights, which can be leveraged via AI to drive sales through personalised marketing or dynamic pricing strategies.

Rather than replacing traditional sales channels, AI and digital tools are now enhancing productivity of insurance agents and bancassurance partners. This is crucial as intermediated channels — including agencies, financial advisors, bancassurance, and brokers — remain dominant across Asia Pacific, accounting for over 90% of sales in most markets and product lines.⁵

Leading insurers are using AI-driven sales platforms to support agents and bank sales advisors in real time — analysing customer profiles, surfacing suitable products, and suggesting timely sales prompts based on live data – blending the best of human touch and digital innovation.⁶

Such tools can help agents prioritise leads and tailor conversations more efficiently, especially in markets where protection needs are complex and policy terms require explanation.

The insurance sector is experiencing a broader technological shift through API platforms and embedded insurance which are opening new distribution channels and allowing for highly personalised customer experiences. Changing customer expectations and the need for efficiency are driving insurers to work with ecosystem partners that can support digital-ready infrastructure at all touchpoints.

For treasury managers, this means embracing digital platforms that allow full visibility over cash flows, FX and interest rate exposure across multiple currencies in real time.

In HSBC’s Redefining Treasury Asia Pacific: Voices of Treasury 2025 report — based on insights from over 460 treasury and finance professionals — treasurers highlighted speed, efficiency and accuracy as the fundamental benefits of a real-time treasury function.7 A significant majority believe AI will be very or extremely useful in treasury operations within the next three years.

As insurers expand across Asia’s fragmented regulatory and payments landscape, treasurers can leverage advanced digital tools to anticipate premium inflows, claims outflows, FX movements and liquidity needs across multiple jurisdictions and multiple payment channels.

Banks can play a role in helping the insurance industry meet these challenges. Digital banking, for example, allows insurers to consolidate premiums from cards, e-wallets, real-time payment networks and platform-based channels in a centralised account, allowing treasurers to forecast cash positions more accurately and respond more quickly to shifts in customer behaviour, claims activity or market volatility.

With an estimated USD258 billion in annual premiums required to close Asia’s health protection gap⁸, insurers have clear reasons to invest in continued growth.

Yet insurers need to balance the cost of implementation and the benefits these new technologies can bring in terms of operational efficiency and customer experience improvement. Additionally, the adoption of AI may include risks such as cyber threats, and concerns around transparency in automated decision-making. Robust governance is needed to ensure technological models are reliable and responsibly deployed, balancing innovation with risk management.