Key Capability Gaps in Survey Findings
APAC insurers are rapidly increasing their investments in private markets, yet their infrastructure is inadequate, as revealed by a recent survey from Clearwater Analytics. The survey emphasises the growing need for advanced systems to support these investments.
Conducted among 150 executives managing $3.8 trillion, the survey indicates plans to allocate a third of their assets to private debt, equity, and infrastructure over the next five years, up from the current 20%.
A significant 93% of executives point to legacy technology as a major constraint on business operations, particularly with new asset classes demanding more robust systems.
Shane Akeroyd, Chief Strategy Officer and President of Asia Pacific at Clearwater Analytics, emphasised the importance of infrastructure: “The firms that will lead the next phase of growth in Asia Pacific are already asking the right questions: does our infrastructure match our ambition, and does our scale allow us to compete as this market becomes more complex?”
Understanding Capability Gaps
The survey pinpointed critical capability gaps in APAC insurers. Only 42% rate their data integration systems as excellent, while a mere 23% express confidence in managing asset complexity effectively.
Regulatory reporting is identified as the primary driver of technology spending, yet less than half of the firms rate their compliance systems as excellent. Eighty-six per cent report cross-asset risk aggregation is under-resourced, and 46% of third-party firms observe deteriorating risk visibility over the past two years.
Ninety-six per cent of insurers anticipate a rise in domestic M&A activity, expecting increased transactions over the next three years. This situation underscores the necessity for strong operational capabilities as a competitive edge.
In response, 56% of insurers plan to enhance data analytics usage, and 55% aim to integrate AI and machine learning within the next 12 months. However, 95% acknowledge industry resistance to change, a factor contributing to the persistent technology gap.
Clearwater Analytics’ survey also highlights that insurers in Hong Kong, Singapore, and Australia are particularly focused on closing the capability gap. This regional focus is crucial as these markets are expected to lead growth in private market allocations.
The survey’s full findings, including insights into market dynamics in Hong Kong, Singapore, and Australia, are available for download, offering a comprehensive framework for evaluating operational readiness.
