The customer experience of insurance has largely remained the same for many years. A customer completes a proposal form (normally in hard copy) and submits it to the broker, the broker requests quotes from insurers, insurers provide quotes, the broker places a policy, the policy is issued (normally on an annual basis) and then the customer probably gives no further thought to it unless he or she needs to make a claim. This process does not fit well with the digital era we now live in and has not adapted quickly enough to meet changing consumer expectations, largely driven by millennials.

Insurers widely recognise the need to innovate. Despite this, most insurers have been slow to change their ways, with less than a quarter giving customers the option to submit claims online. This signals huge opportunities for those in the insurance sector, which explains the huge growth we are seeing in `insurtech' (a word that was barely known a few years ago but now seems to be everywhere). Globally, investment in insurtech increased from US$800 million in 2014 to US$2.6 billion in 2015 and was US$1 billion in the first half of 2016.

Across Asia Pacific, there are numerous examples of insurers embracing insurtech. Some insurers have opened innovation labs or incubators, such as Metlife's LumenLabs in Singapore. Others have established corporate VC funds to invest in insurtech startups that will drive value for the business. For example, Suncorp recently invested in Trov, an app that allows customers to turn insurance on and off by swiping right or left on their phones. We have also seen collaboration between insurers and car manufacturers to make available one-click, single use motor vehicle policies in connected cars, as well as collaboration between insurers and technology companies. Another indicator of the opportunities in insurtech is the level of interest shown in the insurance market by leading players in other markets. For example, earlier this year, China Mobile announced it is planning to enter the insurance market by making significant investments in two insurance companies.

These initiatives are already starting to have an impact on the insurance experience. The use of drones by insurance companies to assess property damage is reducing claims costs and the time taken to assess claims. The implementation of wearable technology in the workplace, such as smart glasses and smart hats, is increasing workplace safety and thereby reducing the risk of injuries. The use of wearable devices has also been adopted by health insurers and life insurers, enabling them to capture data and potentially pass on lower premiums to policy holders. In the future, we predict the most significant areas of growth and change in insurtech will be data analytics, wearables and IoT, blockchain and artificial intelligence.

Whilst regulators understandably adopt a cautious approach, they are taking steps to encourage fintech and insurtech initiatives. The Monetary Authority of Singapore very recently published guidelines for a `regulatory sandbox' to encourage growth in fintech within a relaxed regulatory environment. This follows the announcement by the Australian Securities & Investments Commission of a sandbox for fintech businesses.

As the insurance sector becomes increasingly digitised, cybersecurity risks also increase. Regulators around the region have published new and updated guidance that is relevant to the increasingly sophisticated cybersecurity threats. It is important that insurers' compliance and risk teams focus not only on the immediate cybersecurity compliance obligations arising from the latest regulations, but also ensure that cybersecurity compliance programmes are developed to take into account increasing reliance on technology and data at the core of their operations.

As technology continues to evolve and improve, insurtech opportunities will increase. Although the rise of insurtech has been rapid in recent years, it is still in its infancy. This presents significant opportunities for insurers who adapt to changing consumer expectations and invest in insurtech, especially in Asia where many people are uninsured but are well connected and spend a lot of time online via their mobile devices. Adapting quickly to this dynamic landscape will enable insurers to remain competitive.