Digitalisation, product innovation and building a ‘new reality’ workforce emerge as key trends for Hong Kong insurers in 2021, KPMG finds

Digitalisation, product innovation and building...


Related content

9 February 2021, Hong Kong – Insurance has been – and continues to be – front and centre in the public eye as the pandemic continues. As the world looks towards recovery in 2021, insurers in Hong Kong are driven to focus on digitalisation, innovation, talent and the impact of climate change, according to KPMG analysis.

The Hong Kong Insurance Outlook: Key trends for 2021 report looks into how insurers are adapting their strategies to become more successful and more relevant as they begin to operate in a new reality, and highlights the sector trends emerging in 2021.

The effects of the pandemic brought to the surface what many already knew – Many insurers operate on legacy platforms and the way they sell products involves a high degree of personal interaction and manual processing. In the new year, many insurers are expected to pursue a customer-led digitisation of their business and operating models across the front, middle and back office with a customer-first mindset. 

Erik Bleekrode, Head of Insurance, KPMG China and Asia Pacific, says: “Covid-19 has been a significant catalyst for digital transformation, especially when it comes to customer interaction and distribution. The recovery in some markets has also shown that those insurers with better digitised functions and processes were better at increasing sales quickly again. What is really important to insurers is how should that lead to product innovation and how to give clients the best possible access to the best products.”

Direct-to-consumer sales will increase and require significant and rapid upgrades, particularly in many parts of personal insurance. Brokers/agents will need to be integrated at each step through digital interactions and interfaces, while the data requirements for this transformation are complex. New products may emerge around pandemics or viruses, existing products (e.g. critical illness) will become more popular, and usage-based products (e.g. auto) may gain in popularity. New partnerships with clinics or new ways of distribution with telecom providers or Fintech firms are also expected.   

During the pandemic, for many insurers, shifting the entire workforce, including agents, to operate remotely while dealing with significantly increased activity in their claims functions and shared service centres was a challenge. Moving forwards, there will be significant opportunities to acquire new talent – for example in the digital, technology and data areas – as well as to upskill the workforce as organisations will be less reliant on location. Claims handling and contact centres will be reimagined as more automation is introduced and customers become more comfortable with digital interactions, according to the report.

2020 was also the year when business leaders realised the importance of purpose and brought it to the forefront, and when environmental, social and governance (ESG) matters emerged even stronger than before. Walkman Lee, Partner, Co-Head of Insurance, KPMG China, says: “Growing exposures from increased catastrophic weather events – such as hurricanes and wildfires – to pandemic risks are an integral part of the ‘new reality’. Boardroom conversations around ESG will continue to change, particularly on corporate purpose, stakeholder capitalism, and climate risk and resilience. Insurers can move funding into greener investments and will be increasingly challenged by stakeholders if they do not.”

Through all of this, the regulatory and accounting change agenda remains, and insurers continue to run large implementation projects to meet the deadlines set by the regulators. The introduction of Group Wide Supervision, Hong Kong Risk Based Capital and Enterprise Risk Management requirements continues. The new IFRS17 accounting standard also looms large on the horizon. As IFRS 17 enters its final implementation year, it is placing increased pressure on project and BAU teams as they finish their systems build and prepare for parallel reporting. 


- Ends -

About KPMG China

KPMG member firms and their affiliates operating in mainland China, Hong Kong SAR and Macau SAR are collectively referred to as “KPMG China.” KPMG China is based in 27 offices across 25 cities with around 12,000 partners and staff in Beijing, Changsha, Chengdu, Chongqing, Foshan, Fuzhou, Guangzhou, Haikou, Hangzhou, Hefei, Jinan, Nanjing, Ningbo, Qingdao, Shanghai, Shenyang, Shenzhen, Suzhou, Tianjin, Wuhan, Xiamen, Xi’an, Zhengzhou, Hong Kong SAR and Macau SAR. Working collaboratively across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our clients are located.

KPMG is a global organisation of independent professional services firms providing Audit, Tax and Advisory services. We operate in 146 countries and territories and in FY20 had close to 227,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients. 

In 1992, KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong firm can trace its origins to 1945. This early commitment to this market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in KPMG’s appointment for multidisciplinary services (including audit, tax and advisory) by some of China’s most prestigious companies.

Media enquiries:

Nina Mehra
Direct: +852 2140 2824

Isaac Yau / Isabel Kwok
Citigate Dewe Rogerson
Direct: +852 3103 0112/+852 3103 0123


© 2022 KPMG Huazhen LLP, a People's Republic of China partnership, KPMG Advisory (China) Limited, a limited liability company in Mainland China, KPMG, a Macau (SAR) partnership, and KPMG, a Hong Kong (SAR) partnership, are member firms of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation.

For more detail about the structure of the KPMG global organisation please visit


Connect with us