Almost half (48%) of insurers in APAC say meeting internal and external reporting demands is the biggest challenge they face in complying with financial watchdogs, new research from Clearwater Analytics has revealed.
The study of insurance asset management executives at firms with total assets under management (AUM) of $3.823trn found a clear divide in regulatory priorities: small ($1bn to $5bn AUM) and medium ($5bn to $10bn AUM) rank meeting reporting demands as their top challenge, while large ($10bn to $50bn AUM) and extra-large (more than $50bn AUM) firms prioritise adapting to regulatory changes.
Beyond reporting demands, more than a third (35%) identify adapting to the regulatory changes as the biggest challenge, while 13% cite meeting varying requirements across different regimes as the primary hurdle.
When asked about meeting changing regulatory requirements across different markets over the next three to five years, 14% said it will be very difficult while another 18% said it will be quite difficult. Just 10% said it will be very easy, while 43% said it will be quite easy.
Despite these forward-looking concerns, respondents expressed confidence about insurers’ current capabilities across APAC to adapt to regulatory changes. More than a third (37%) believe insurers are excellent in compliance, while half (55%) say they are very good. Only 5% say they are poor or very poor in compliance capabilities. However, with one-third expecting increasing difficulty, regulatory complexity will likely test these capabilities.
“The regulatory landscape across APAC is creating a tale of two markets,” said Shane Akeroyd, chief strategy officer and president of Asia Pacific at Clearwater Analytics.
“Small firms are struggling with current reporting demands while large firms are positioning for future regulatory changes. This divide will become more pronounced as requirements continue evolving across multiple jurisdictions. The insurers that build integrated compliance capabilities now will have significant competitive advantages as regulatory complexity increases.”
Senior executives at the asset management arms of life and health insurers and general insurers based in Hong Kong, Singapore, and Australia as well as executives at third party investment firms working for life insurance carriers were questioned in the study.
