In A Rebalancing World — Asia Is Driving Insurance Change

In this episode of Reinventing Insurance, Ben Simpfendorfer from the Oliver Wyman Forum joins our host Paul Ricard, to discuss Asia’s role in a rebalancing world and the megatrends that are shaping the future of insurance. Based in Hong Kong, Ben brings over 25 years of experience working in Asia and the Middle East, and has extensive knowledge of the local markets. He is a regular commentator on Bloomberg and CNBC and a key opinion leader on LinkedIn with over 440,000 followers.

As the world continues to evolve in this uncertain economic and geopolitical environment, insurers must be proactive in adapting to supply chain impacts, demographic shifts, and the need for technological advancements. Remaining agile and embracing innovation is crucial for capturing new markets and addressing the diverse needs of consumers across Asia.

In this episode, Paul and Ben share their perspectives on:

• The collision of mega trends, supply chain shifts, and emerging markets for insurers in Asia
• The Gen Z factor, demographic change, longevity and the aging population offer insurance opportunities for new product and service offerings
• The increase in mergers and acquisitions, and partnerships within the insurance industry
• Climate change, the green energy transition, and the need for adaptation and resilience
• Moving towards a transformation-led approach to generative artificial intelligence (AI)

This episode is part of our Reinventing Insurance series, a series that explores best practices for taking a CustomerFirst approach to innovation within Insurance. Throughout this series, host Paul Ricard discusses lessons, challenges, and new ways of working with guests who will share their first-hand experiences.

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As an Oliver Wyman Partner based in Hong Kong, Ben Simpfendorfer is part of the Finance and Risk Practice and leads Oliver Wyman Forum’s initiatives in Asia. He drives data analytics solutions for clients across Asia.

Based in Hong Kong, Ben brings over 25 years of experience working in Asia and the Middle East, with extensive knowledge of the local markets. He is the former CEO of Silk Road Associates, which has now joined forces with Oliver Wyman. While in that role, he advised Fortune 500 multinationals and leading Asian firms on their commercial strategies in China, Southeast Asia, the Middle East, and Africa, and advising CEOs and executive boards worldwide.  

Ben is a leading expert on China’s Belt and Road Initiative (BRI). He is also a member of the Middle East Advisory Group at the Financial Services Development Council, a high-level, cross-sectoral advisory body established by the Government of the Hong Kong Special Administrative Region. Additionally, Ben is a board member of the Pacific Basin Economic Council and has previously held positions as an executive committee and board member of the American Chamber of Commerce in Hong Kong.

Recently, he published a refreshed edition of “The New Silk Road,” which highlights the rapidly growing economies of Asia and the Middle East. Additionally, he authored “The Cities Shaping The Future,” an index that ranks the business attractiveness of 1,500 cities across Asia, Africa, Latin America, and the Middle East.

Ben speaks Mandarin and Arabic. He is a regular commentator on Bloomberg and CNBC and a key opinion leader on LinkedIn with over 440,000 followers.

Our Host

Oliver Wyman Partner and Head of our Asia Pacific Insurance and Asset Management Practice, Paul Ricard is based in Singapore. Paul works closely with businesses to reinvent their strategies, products, and services — and to fuel top-line growth opportunities.

He works with clients across Asia Pacific, as well as the Americas and Europe. He regularly partners with firms to reinvent their business strategy, rethink their priorities, and to modernize their technology while accounting for rapidly changing customer needs. He understands his clients’ realities, and thrives on helping them innovate and strengthen relationships with their customers while factoring existing challenges.

Paul Ricard: Welcome to Reinventing Insurance. Today, I’m delighted to welcome Ben Simpfendorfer with me, who’s a partner and the Asia Pacific (APAC) lead for the Oliver Wyman Forum. Welcome, Ben.

Ben Simpfendorfer: Thank you very much.

Paul: Ben, let’s start with a quick intro about yourself.

Ben: I’m a partner here at Oliver Wyman in Hong Kong. I’ve lived here for over 25 years, so it’s definitely home. I lead the firm’s leadership activities across the region. So, the Forum convenes senior leaders from across industries to talk about some of the hottest issues of the day. And we do that by putting together roundtables or publishing thought leadership. So, it’s a fabulous part of the business, particularly at this point in time with the global markets in such disruption.

Previously, I ran a business for 10 years, a consulting business. And we did a lot of work in Asia, the Middle East, and Africa, again, fast-growing emerging markets. But I equally had the pleasure of spending 10 years at the investment banks as a chief China economist at an exciting point in time when China was just emerging and really capturing the attention of global markets.

Paul: So, Hong Kong for 25 years, you’ve obviously seen things evolving in this part of the world for this long. What’s been, by the way, the most exciting and surprising things you’ve seen happening in these last 25 years in Asia, in Hong Kong and Greater China?

Ben: China’s explosion on the world stage was perhaps without a doubt number one. There was a period at the banks when we struggled to write anything about China that would capture global attention, and by 2003, that all changed. And all everyone wanted to hear was “China, China, China.”

At the same time, the country’s announcement of a "Belt and Road" initiative that really took the world by surprise as well, because China’s connectivity to markets across Asia, the Middle East, and Latin America really disrupted the way many multinationals did business. It changed the way they thought about the region. And then I’m sure we all mentioned the pandemic, especially here in Hong Kong, and how that changed the way that we do work and the way that we meet with clients. But there is no doubt this region is just fabulously exciting. And it is one thing I always tell myself: Every 18 months, you’ve got to relearn your assumptions about how this region does business. It’s exciting.

Paul: With that, I think we have a lot to unpack in the agenda today. You’ve recently been running it off, thought leadership around: “What will Asia look like in 2030 onward?” We’ll dive into this. “What are some of the mega trends?” “What are some of the hottest topics that are shaping the future of Asia?” Since we’re focused on the insurance ecosystem, we’ll discuss “What are some of the most disruptive forces that will shape the insurance industry?” And then to wrap this up, we will talk about what’s happening in the world, more broadly. What are some of the big global trends, whether they’re impacting Asia or the world more globally? So, we have an action-packed conversation ahead. How does that sound?

Ben: Sounds ideal. A lot to talk about!

Paul: Let’s dive in and talk about the forces and the mega trends that are shaping Asia. So maybe, first of all, do you want to share a little bit of context about the work that you’ve been doing recently on that front before we dive into the trends themselves?

Ben: So, mega trends are front and center for Boards, for executive teams. We’ve seen a convergence of trends, and I know we’re going to get into many of them, but everything from geopolitics to supply chain, to demographics, to technology, that is really shaking up the way that we think about our business models.

And so, we’ve tried to approach this in a number of ways. One is that we’re putting together roundtables across the region where we bring together senior executives from across industries, just to share their views on where they see both opportunities and challenges. And equally, putting together thought leadership on the topic, such as the CEO survey we recently did with the New York Stock Exchange (NYSE). This survey included more than 100 CEOs from companies listed on the New York Stock Exchange. We asked a series of questions on the forces impacting their businesses and the potential levers to respond to these forces.

Paul: You’ve looked into a range of scenarios of how Asia could evolve in the next few years. So, can you tell us a little bit more about that?

Ben: So, we see scenarios where the shift in supply chains, for instance, is rebalancing growth across the region. China used to be the single focus of most big multinationals by supply chain. Shifts in capital flows. Increasingly, multinationals are also excited about Southeast Asia, South Asia. That’s certainly one scenario we’re exploring, but there are others, such as a climate-impacted world, where rising flood risks and water scarcity risks are equally putting demands on governments to spend more on resilience. They change the way that corporates need to think about their footprint and their exposure to these potential risks. So, there are a number of scenarios out there we’re discussing.

Paul: So, diving into, let’s say, the growth rebalancing that you were talking about. I think you were talking a little bit earlier about China. Is there a doubling down on other parts of the world, other parts of Asia, from global companies? How do you see that evolving? What trends are happening? And what are the implications for the broad range of industries?

Ben: So, to put this into perspective, when you turn the clock back 10 years. China was growing. It doubled its current rate, growing at close to 10%. It accounts for more than 50% of the region’s economy. There was no surprise that multinationals, if they had to do anything, they would do it in China. China’s growth rates have since slowed and are now trending around 5%. At that level, markets such as India, Indonesia, and Vietnam are all growing at faster rates. Now, admittedly, their markets are smaller, but nevertheless, those growth rates become quite attractive. And so, we are seeing companies beginning to rethink where they invest their next dollar. Take Japanese firms as an example, whereas previously, they used to invest dollar-for-dollar into China or Southeast Asia, that has changed significantly. Very little investment is going into Japan. The same, if not more, investment is going into the Association of Southeast Asian Nations (ASEAN) as they look to capture some of those faster growth rates.

Paul: And does that link up with the demographic shifts as well that are happening in the region? I know this is also a scenario you’re looking into. I’m just curious how this is all intertwined between what we’re seeing in China, in various countries, and in Southeast Asia.

Ben: Demographics has a role to play. One of the reasons China grew so rapidly is that there was an abundant and seemingly infinite supply of young labor at the time. Well, that’s all changed over time. The youth demographic is in decline. It’s harder to get factory workers more than ever. So, that’s impacted growth rates overall. If growth rates are going to be sustained at this rate or accelerate, it needs to see significant productivity growth. And we can certainly chat about that later.

But perhaps what’s more interesting is that companies are now excited about the youth demographic in Southeast Asia. Now, not all of the region is young. Thailand is 10 years older than Malaysia, but when you look at markets such as India, Indonesia, and Malaysia, these are younger markets. These are markets where income levels are reaching a threshold, where households start to spend on big-ticket items.

Paul: Looking into what this means for insurers. Obviously, there’s an element of: “How do I rebalance my portfolio across the region?” “Where do I potentially place the right, the bigger bets?” As you were talking about the populations getting younger, there’s also an element of “How do I capture these younger populations?” “How do I capture these individuals early in their lives?” And stay with them throughout their lives.

Ben: Exactly. And your reference to rebalancing, I think, is particularly important. China is still very important for all of us. But there’s a recognition that perhaps we are over-indexed on China as compared to Southeast Asia. So now we’re just needing to correct that and to rebalance those portfolios and capture, to your point, some of these younger populations earlier in their careers or their insurance journey.

Paul: What are some other scenarios or big trends that you’re seeing across the region in these megatrends shaping Asia?

Ben: We’re also looking and thinking about the way financial markets are changing. This region increasingly funds itself, whereas previously we relied on capital from the rest of the world, such as Europe and the US. Over the last 10 years, the ground has shifted significantly. Japanese capital is more important than ever. Korean capital is more important than ever. And over time, we may begin to see more Chinese capital. And those internal intra-regional capital flows are really an important source of funding. At the same time, we’re seeing the development of non-bank players, who are perhaps finding it easier than ever to reach customers because of the digital transformations on the way. But we’re also seeing the growth of private markets relative to more conventional markets. So, there are some fabulous changes taking place within the region that are reshaping our financial sector and making us perhaps more inward-focused rather than outward-focused as compared to previous years.

Paul: And it’s interesting because if I look at the insurance industry, these trends are certainly applicable. There are multiple strands of more M&A activity that we are seeing in this region. We are seeing M&A activity from players across the globe, trying to get on the growth train in the region, and then intra-region as well. Japanese players in the insurance industry have been doing a ton of acquisitions in Southeast Asia, for example. The private markets trend is certainly something we’re seeing across the globe. And that’s happening here as well. I think if I look at this particular trend as compared to other parts of the world, I think it’s not as full steam as other parts of the globe right now, but it certainly seems like Asia is going to get there pretty quickly as well.

Ben: And there’s a recognition within the region that our capital markets are smaller than they should be. We saw a burst of activity in capital markets, post the 1997 Asian financial crisis,  as a share of gross domestic product (GDP) began to rise, but it plateaued around 2010 and hasn’t grown as much as we would have liked. Debt markets are smaller than they should be. Security players, regulators are all realizing that more work needs to be done here to increase the share of capital markets and just reduce the region’s reliance on non-bank financing.

Clients are always keen to talk about geopolitics. The world has certainly shifted over the last few years. I think there’s a lot of resiliency work that’s being done to think through sort of what the potential world would look like in the coming years and how businesses need to be structured to prepare for that and capture opportunities that may arise out of that.

Paul: And does that link to the climate point that you were talking about as well?

Ben: It does to a degree that societies are going to be under more stress than in the past, whether because of political changes or due to climate change. And so increasingly, we’re worried about the risks of population displacement, for instance, as flood risks rise, as drought conditions worsen, so societies are facing challenging years and challenging decades ahead.

Paul: As you ran these executive roundtables, as you had these conversations about these trends, what was the most intriguing reaction or the most intriguing takeaway that your audiences took from these various scenarios and their implications.

Ben: I think one of the more interesting scenarios, and this came out of a conversation we had at our Singapore roundtable, was the speed of technological change, particularly in Southeast Asia and South Asia.

There are a number of insurance players who were excited by the way smartphone adoption rates, among young populations, have provided a way for insurers to access new markets through digital solutions. Change can happen very quickly once that infrastructure is in place, so the key is to remain on top of, or at least constantly scanning the horizon to understand where the infrastructure is going when it’s near completion, and then moving quickly to make the most of it.

Paul: Let’s shift gears and talk with an insurance lens about these trends. The first one on my list is the rise and advent of new cities and how it’s no longer just about a handful of big cities, especially in Asia, but a consortium of different cities with different purposes. I know you’ve been digging into this, so can you give an overview and talk about the implications for insurers.

Ben: It’s a fascinating subject and a bit of an obsession of mine as well. And partly having worked with China for more than 20 years, I’ve had the chance to see the impact of the rise of mid-tier cities. Those mid-tier cities added GDP worth the size of France over a period of 10 years. So, that is a huge market in its own right. No surprise, you had companies or brands that have built out not just tens or hundreds of extra stores, but thousands of extra stores.

It was a very exciting stage in the world’s economic development. We’re now beginning to see echoes of that in Southeast Asia and South Asia. Why? Supply chains have been shifting, and they will continue to shift in spite of the recent introduction of higher tariffs. New manufacturing hubs in smaller or mid-tier cities mean stronger employment growth, income growth in their cities, and ultimately an expansion in our potential market. The Southeast Asia and South Asia region has approximately 500 mid-tier cities. Not all of them will thrive, but many of them will. And so, the question for companies is, “How do you identify where the next opportunity is?” “Where are the 10 or 20 opportunities that you should focus on as new potential markets?”

Paul: If I look at the insurance industry, from the life insurance industry, which has been a growing industry in this part of the world for all the reasons we’ve been talking about. There is a focus on tier-one cities. How do we go after these tier-two cities? But importantly, how do we engage with different, for lack of a better word, personas of populations? How do we evolve our offerings? How do we evolve the way we engage with them, the way we market to them as well? Are their needs different? There’s that element that represents a big opportunity. But this may also represent the need to drastically shift the way companies currently engage with customers and design their products.

Ben: So, one of the challenges we found with companies, and not just specific to the insurance sector, but all types of companies, whether it’s luxury goods brands or fast-moving consumer goods (FMCG) groups, is that they are primarily using just GDP and population to benchmark these cities. We know that’s not enough. What we need to understand is what industries are driving growth or attracting populations.

Let’s take some of these satellite cities, for example, Ho Chi Minh City. These are big manufacturing hubs, some of the world’s largest, and they’re attracting migrant labor from across the country. But equally, we’re seeing the emergence of a moneyed middle class who are typically factory owners. So, already you can begin to see two types of personas emerging. You then have other cities around the region that are primarily beneficiaries of national growth policies, increased infrastructure investment, whether it’s into markets, such as Indonesia’s Surabaya and Yogyakarta. And here, again, the personas are different. So, it might be more classes related to government functions. It might be classes related to more domestic demand-driven, manufacturing, or even agricultural production. But again, the personas can be quite different.

Paul: Recently, we published our "10 To Do’s For Insurance CEO In 2025." And one interesting thing is, we had organized customer-back for transformative growth, with the idea that in the insurance industry, many times there is a product-first approach. Where is the GDP? Where is the growth? Let’s sell our products. And there’s a need to shift this and start from the customer needs back. What are the different personas? What are these populations? What are the customer's needs? Okay, now, how can we evolve the way we serve them? That’s something where there is a massive opportunity for life insurance, for example.

But also, if we look at property and casualty insurers, what I find super interesting, as related to what you’ve shared, is that you now have manufacturing hubs, service hubs, and bigger talent pools. So, it’s different people, different needs, a lot of small businesses as well that are now coming in with different needs, insurance needs, and frankly, broad financial security needs that represent an untapped opportunity.

And oftentimes, the small business world represents that next frontier for insurers to go after. And you were sharing earlier on the digital frontiers. There’s an element where that model can evolve. You can really think customer-back and you can use digital to gain scale and go after these smaller and medium-sized enterprises (SME), in a way you haven’t had the opportunity before.

Ben: And scale is everything. Asia has three times the number of mid-size cities as compared to Europe and the United States. So, the question of scale is a completely different one. The challenge companies are trying to solve is: “How do we access consumers?” We can’t build brick-and-mortar stores. These markets are rapidly changing. So, the investments we make today may not make sense in a few years’ time. It’s the ability to move it at scale, to move its speed, and then be able to pivot to those new business models. And that’s the challenge many are facing.

Paul: Day-to-day, we work on this with our clients as well. With everything moving so fast, how can companies take advantage of these technology disruption trends, for example, and better serve their customers, better serve their markets, and also in a much more efficient way?

And that’s something that I found fascinating, having been in this part of the Asian business world. There is an element of chasing growth, but also looking to achieve it at scale and as efficiently as possible. To your point, if you just chase growth and open brick-and-mortar stores, you’re going to very quickly collapse under your own weight. So, constantly reinventing yourself is part of the opportunity.

Ben: So, this part of the world, whether it’s the sheer number of cities, it’s the breadth of personas, everything from a small business owner in Yogyakarta to a wealthy factory owner in Ho Chi Minh City, just that scale and breadth means we really need to reinvent the way that we do business in Asia.

Paul: Every country is different, has its own set of regulations, has its own populations, and every city has its own personas. There’s an element of: "How do you balance the right approach, the right mindset, but make it adaptable to every city, not even every country, but now every city, which I think you have 1,500 cities in the recently published report."

Ben: I’m reminded of e-commerce players, at least every market had a different payment system. Some were cash on delivery, some used QR codes, but it was a complex scenario for them to work through.

Paul: Another thing I wanted to talk about is the theme of longevity. Earlier, you shared how the population in Thailand, for example, is 10 years older than in many other parts of Southeast Asia, on average. The world overall, but Asia, in particular, is moving towards being older, on average, and that leads to a range of needs from a health standpoint, from an insurance standpoint. I’m sure if we were sitting down for this podcast discussion 10 years ago, we would have also said that longevity is a trend, and there are a lot of undercurrents that are driving it. What, in your view, has changed in the last few years on the longevity front?

Ben: The labor shortages perhaps drove that point home. So, 10 years ago, we would have talked about aging populations, but it didn’t feel real. Today, it feels real.

Hong Kong is an example. If you’re trying to find a truck driver who can help with e-commerce distribution, it’s very, very tough. Companies are now having to think through the ways that they can automate in order to replace labor. But equally and more importantly, having to tailor their propositions, whether it’s their goods or services that they’re looking to sell into this market. When I first arrived in Hong Kong, the average age was early 30s. Today it’s nearly 47. That’s an entirely different market that we’re selling into. And it’s one that shapes everything from obviously medical, but equally, even just risk-taking. In my view, there’s potentially a dampened entrepreneurial spirit here, as people are thinking now about entering that decumulation phase of their lives, it’s a very different outlook.

Paul: There’s an element focused on how do you better serve, as an insurer, these populations that are pre-retirement or closer to retirement. And not only help them, again, taking a customer back lens, not only help them with their insurance needs, but also offer assistance services that complement this. What’s the right ecosystem to serve these needs? There is actually a broader challenge, if you think about financial wellness more holistically, which is really at the intersection, not only of insurance, but also at the intersection of asset management, wealth management, and banking. For many people, there is no very clear path here. And as people age, there are also people who are taking care of the aging population. And how is all of this connected, and who is helping these individuals make progress on their financial journey feel more secure? It is still a very big and unaddressed gap.

This is not an easy problem to solve. it is a problem that hasn’t really been solved anywhere else in the world. And in a way, I think Asia is the place where that problem has to be solved first, because it’s probably where it’s the most prominent around the world.

Ben: So, I want to draw an analogy here with manufacturing. China is looking to use artificial intelligence (AI) through its manufacturing sector, in part to deal with labor shortage challenges in the aging of the population. I would like to think China will be leading the charge, because the country has obviously invested in the infrastructure to support this transition, but the outcome is still uncertain.

Paul: On a previous episode, we dug quite deeply into health insurance more holistically. Again, having scale is difficult. How do you provide the right level of care and the right service? And that’s where AI augmentation can be very interesting. So hopefully, a range of positive trends are helping on that front.

Ben: I’ve just come back from the Boao Forum for Asia (BFA), an annual conference and China’s flagship event, which brings together policymakers and business leaders from around the region. And one of the areas that shows the greatest excitement is the health sector. There are a number of reasons for that. First, the sector has opened up to greater foreign investment, but equally, there is the excitement around the way artificial intelligence is being applied to such things as personalized medicine, cancer treatment, and so forth. There is AI-enabled medical equipment that can ideally provide solutions at scale. And so ultimately, there was a reason that the CEOs of most of the global pharmaceutical companies were all recently in Beijing because they see an opportunity.

Paul: Shifting to another topic, which is somewhat adjacent but different: Wealth is obviously an important theme as well in Asia-Pacific. And we are also seeing growing wealth hubs, wealth corridors that facilitate trade, investment, and economic growth between different regions of Asia. Ben, anything you’d like to share on this trend?

Ben: The wealth corridor is exciting. And often, flows used to be into the US markets. This is obviously still very important. But increasingly, we’re seeing flows retained in the region and diversified across the region. We’re seeing flows from China out into Southeast Asia, with Singapore acting as a hub. But the Middle East is a place I am very familiar with, having worked in the region back in the 1990s and continuing to do work there. Recently, we were speaking with wealth managers and quite often heard comments that Middle East investors are looking to derisk, in part by bringing money into Singapore and into Hong Kong. So again, it echoes that the intra-regional or greater reliance on intra-regional capital, but in this case, wealth and those corridors could be quite impeccable for companies going forward.

Paul: And certainly, we are seeing a lot of activity across the value chain in the insurance industry, just like in the broader financial services industry. So certainly, an exciting one. The other one is Gen Z and younger populations. And we’ve done research on this population as a firm.

With Gen Z, insurers need to consider how do I engage with customers early in their lives, build relationships, build trust, and stay with them throughout their lives. How much value can I bring? So that’s one element. The other element is the opposite of what I was talking about with longevity, which is, how do I build a relationship with an entire household from the youngest, to the middle generation, to the elderly parents? And how can insurers become multi-generational problem solvers for financial needs?

Ben: It’s a fascinating area. If I could take a step back and say that the speed of change is perhaps the biggest challenge. You are dealing with a number of converging trends. Many of these markets are still developing. What households are prepared to spend on, even how households are set up economically, can look very different year-to-year.

At the same time, you have demographic change that is far outstripping what we saw in the rest of the world. The region is aging at twice, if not three times, the rate of what we saw in Europe as an example. And then you throw in the Gen Z factor, which, while there are similarities to Gen Zers around the world, there are also clear differences. Trying to get a handle on this is one of the challenges that many insurers face in this region. It’s not an easy one, but in my view, there needs to be dedicated efforts in trying to understand what these changes mean. It can’t be a part-time initiative.

Paul: Linking this up to the bigger objective. If I’m just going to go after this population at this point in time, is it worth it? And in some industries, it might very well be worth it from the outset. In the insurance industry, it might not necessarily be worth it from the outset. If you think about more holistic solutions, the longer-term horizon, that becomes a very different type of business. But I agree with you. There is a shift towards “let’s spend time understanding these younger populations,” who are quickly evolving. The pace of change is increasing. These populations can oftentimes be trendsetters as well in terms of media consumption and other things. I see the focus on younger generations happening more and more.

Ben: Chinese consumer goods companies and their behaviors are quite instructive at this point. They tend to throw out a large number of products over a short period of time. And 12 months later, maybe only a handful of those products still exist, but it’s trial and error. And their global peers, whether in Europe or the US, have really struggled to replicate this, because it’s an entirely different approach to strategy. They see it as a cost. How could you afford to invest in so many products? But for these consumer goods companies, their response is: “It’s the only way we can test in a fast-moving market. It’s the only way we can identify where we really need to double down, because otherwise we’re just guessing.”

Paul: These are some of the trends we are seeing in the insurance industry. But as they are linked to the megatrends, what role will regulation play in that world? And how much of it is about climate change? How much of this is focused on the “assist and support” versus the “predict and prevent,” which is an age-old debate in the insurance industry as well. In the US, for example, a lot of that is happening right now.

Ben: The government debt levels across the region rose quite sharply because of the pandemic and the amount of funds that needed to be spent. And government finances are relatively constrained at the moment. And at a point, more investment will be needed in resilience, more investment in the health and aging populations. It won’t be possible for them to find sufficient funds. And so there will be gaps. And the private sector will be looked towards to fill some of those gaps, whether it’s specific to climate resilience, or whether it’s specific to insurance coverage. It’s one of the big challenges for governments, especially in Southeast Asia, over the coming decade.

Paul: If I think about the transition to green energy, alongside trends in climate change, insuring green projects can be very difficult. For example, if you’re going to be insuring wind farms, they are usually in high catastrophe-prone areas, which means they carry quite a bit of risk and uncertainty for insurers. So, how do you accompany these projects? And how do you do this in a sustainable way? This is a challenge that the insurance industry is grappling with both globally and in Asia as well.

Ben: Yes, and it’s not just the insurance sector. There is a range of multinational banks out there, all trying to solve the same problem, particularly around greenfield financing. It is not easy, and governments can’t be expected to fill the gap given the constraints that they currently face.

Paul: It would be great to get your take on additional global trends. Let’s step out of Asia for a second. What are global trends to watch out for?

Ben: To some degree, the global trends reflect what we’re seeing here in Asia because of the importance of the region. So again, we’re looking at supply chain shifts and what that means for the rest of the world. I was only recently in Turkey, as well as Morocco, seeing the impact that the shifts in manufacturing have on local populations in those markets. Again, it’s a story of employment and income. It really is a region-wide effect, and at the same time, China to the Middle East, and that trade corridor.

I’ve been repeatedly back to the Middle East over the last few years. The New Silk Road resurrection. Some of the changes seen in the United Arab Emirates (UAE) and Saudi Arabia at the moment are particularly exciting. The speed at which governments are investing in their non-oil sectors and more advanced sectors, including artificial intelligence, to future-proof their own economies. So far, insurance has been perhaps less on the radar than it could have been, as the focus is more on industrial strategy, but inevitably, that will become a hot topic, not just for the Gulf but also for the broader region.

Paul: Anything to share about the US and what’s happening there?

Ben: The US is certainly in a state of change. We are witnessing an attempt to reindustrialize the country. The concern for those of us out here in Asia is that we have benefited enormously and continue to rely on globalization and the free movement of capital and goods. And so the question is how we can stay integrated with the US economy, because we clearly want to, and it’s a longtime ally for many of us. And we’re still puzzled over that question to a degree. But equally, I would emphasize that the US is important to the region and to the world.

Paul: Another point, in the chase for growth and for resilience, is an increasing amount of M&A in the insurance industry, especially if I think about the property and casualty industry. There are periods where prices are increasing and decreasing based on what we’re seeing happening around the world. Right now, organic growth is harder to achieve. And therefore, inorganic growth becomes a lever, especially for the property and casualty (P&C) players. And we’re seeing this as insurers chase growth and strive to increase resilience — both globally as well as in this region.

Ben: There’s a growing recognition that the conglomerate model may not work as well as it did in the past, largely because the region is increasingly fragmented. In the face of geopolitics, supply chain shifts, and nationalist growth policies, conglomerates don’t quite have the same edge they used to. There’s a need to spin off and extract value. I see M&A as an opportunity going forward.

Paul: Linked to this are partnerships in the insurance industry. Partnerships are critical between insurers and other players across the value chain. In Asia Pacific, bancassurance, for example, is a very important way for insurers to reach customers. And this is about how you bring together the strengths of the bank and the strengths of the insurer, in a value proposition for customers. I think more broadly, there is value in building these ecosystems, but a lot of challenges come with it. Incentives need to be aligned, which is difficult to achieve. They need to be aligned for the long term. Again, curious what you’re seeing across industries on that front.

Ben: So, across industries, partnerships have become more and more important. Going back to our early conversation around scale, scale is very difficult to achieve organically. Partnerships are often the only way to go and achieve this, especially in a world of technological disruption. Partnerships bring unique, competitive advantages.

Partnerships are perhaps more important in our part of the world, here in Asia, than they might be in other parts of the world, where markets tend to be more stable, more unified, and more predictable. So, across industries, we see partnerships being prioritized by the large corporations. As we move into a more unpredictable world of heightened geopolitical tensions, partnerships are another way to derisk some of those tensions and to ensure that companies continue to sell and access as many markets as possible while also protecting themselves from potential disruption further down the line. I would suggest there may be similarities in the insurance sector.

Paul: Companies and insurers, in particular, need to spend more time building their equity narrative addressed at shareholders, but frankly, a broader group of stakeholders as well — from internally driving alignments within the organization on “what are we doing” and “why we’re doing this,” to engaging with a broad group of shareholders that can include the everyday investor. At Oliver Wyman, our research found that if you take CFOs, a high percentage will say a good equity story is important, but only approximately 50% will tell you that they actually have a good hold on the equity story. How have you seen this evolving, especially in this part of the world?

Ben: Chatting with an Asia Pacific CEO just the other day, the CEO made that point, and said, in order to thrive, they are increasingly having to build out their relationships with the local governments — that can include their core businesses right through to their recycling businesses. So, it is more important than ever. At the same time, in a world where governments are increasingly populist or taking more nationalist approaches, some of our roundtables have hinted at the fact that the equity story is perhaps more difficult than in the past. This may be due to selling or working with stakeholders in different markets, often competing markets, and trying to keep everyone happy.

Paul: I kept AI for the last bit of our conversation. The stance we’ve shared prior is that you should not start with AI for the sake of AI, but start with the bigger transformation objective, and work back from this and use AI as one tool, one that is rapidly evolving, but one of many that is available to leverage for that transformation.

If I look at the insurance industry, it’s fascinating that out of all the regions, insurers in Asia are the ones who have most rapidly adopted AI solutions and implemented them. Having said that, we still need to make the shift away from many POCs (proof of concept) and move towards a transformation-led use of AI. What’s your broader perspective on AI?

Ben: I think the sector could draw lessons from the manufacturing industry and the challenges around automation. There’s a sense that you just buy a few robots, stick them on your production line, and productivity rises. But it never works out that way, because what you find is that all of a sudden, the robots are working twice as fast as the rest of your factory line, and you end up with this huge stock of unfinished goods. The question is, how do you apply technology to a specific part of the line where it improves overall productivity and doesn’t create bottlenecks?

The question around artificial intelligence is not rethinking your entire business, but how can you apply it systematically so that it improves overall productivity, without being wholly disruptive to your business? Those small proof-of-concept projects become very important at this point. Proof of concept is not just in a single market, but in multiple markets around the region, and then learning through trial and error.

Paul: So, I really like how we really observed an entire collision of megatrends — starting from now in Asia and going into 2030 onwards. The major shifts we’re seeing in the insurance industry and looking at these more global trends. What are some final words of wisdom you have for our audience?

Ben: Get prepared for more disruption. I think horizon scanning is more important than ever, with a focus on short-term objectives. Keeping an eye out for long-term shifts in the market will be more important than ever. And that’s going to require building new skill sets, developing new muscles. It’s not straightforward.

Paul: Thank you so much, Ben. It was great having you join us here today in Hong Kong.

Ben: It was a pleasure. Thank you.

Paul: Terrific. Thank you, everyone. That was Ben, who is the Asia Pacific lead for the Oliver Wyman Forum. I’m Paul. Thanks for listening, and I’ll see you next time.

This transcript has been edited for clarity.

In this episode of Reinventing Insurance, Ben Simpfendorfer from the Oliver Wyman Forum joins our host Paul Ricard, to discuss Asia’s role in a rebalancing world and the megatrends that are shaping the future of insurance. Based in Hong Kong, Ben brings over 25 years of experience working in Asia and the Middle East, and has extensive knowledge of the local markets. He is a regular commentator on Bloomberg and CNBC and a key opinion leader on LinkedIn with over 440,000 followers.

As the world continues to evolve in this uncertain economic and geopolitical environment, insurers must be proactive in adapting to supply chain impacts, demographic shifts, and the need for technological advancements. Remaining agile and embracing innovation is crucial for capturing new markets and addressing the diverse needs of consumers across Asia.

In this episode, Paul and Ben share their perspectives on:

• The collision of mega trends, supply chain shifts, and emerging markets for insurers in Asia
• The Gen Z factor, demographic change, longevity and the aging population offer insurance opportunities for new product and service offerings
• The increase in mergers and acquisitions, and partnerships within the insurance industry
• Climate change, the green energy transition, and the need for adaptation and resilience
• Moving towards a transformation-led approach to generative artificial intelligence (AI)

This episode is part of our Reinventing Insurance series, a series that explores best practices for taking a CustomerFirst approach to innovation within Insurance. Throughout this series, host Paul Ricard discusses lessons, challenges, and new ways of working with guests who will share their first-hand experiences.

Subscribe for more on: Apple Podcasts | Spotify

As an Oliver Wyman Partner based in Hong Kong, Ben Simpfendorfer is part of the Finance and Risk Practice and leads Oliver Wyman Forum’s initiatives in Asia. He drives data analytics solutions for clients across Asia.

Based in Hong Kong, Ben brings over 25 years of experience working in Asia and the Middle East, with extensive knowledge of the local markets. He is the former CEO of Silk Road Associates, which has now joined forces with Oliver Wyman. While in that role, he advised Fortune 500 multinationals and leading Asian firms on their commercial strategies in China, Southeast Asia, the Middle East, and Africa, and advising CEOs and executive boards worldwide.  

Ben is a leading expert on China’s Belt and Road Initiative (BRI). He is also a member of the Middle East Advisory Group at the Financial Services Development Council, a high-level, cross-sectoral advisory body established by the Government of the Hong Kong Special Administrative Region. Additionally, Ben is a board member of the Pacific Basin Economic Council and has previously held positions as an executive committee and board member of the American Chamber of Commerce in Hong Kong.

Recently, he published a refreshed edition of “The New Silk Road,” which highlights the rapidly growing economies of Asia and the Middle East. Additionally, he authored “The Cities Shaping The Future,” an index that ranks the business attractiveness of 1,500 cities across Asia, Africa, Latin America, and the Middle East.

Ben speaks Mandarin and Arabic. He is a regular commentator on Bloomberg and CNBC and a key opinion leader on LinkedIn with over 440,000 followers.

Our Host

Oliver Wyman Partner and Head of our Asia Pacific Insurance and Asset Management Practice, Paul Ricard is based in Singapore. Paul works closely with businesses to reinvent their strategies, products, and services — and to fuel top-line growth opportunities.

He works with clients across Asia Pacific, as well as the Americas and Europe. He regularly partners with firms to reinvent their business strategy, rethink their priorities, and to modernize their technology while accounting for rapidly changing customer needs. He understands his clients’ realities, and thrives on helping them innovate and strengthen relationships with their customers while factoring existing challenges.

Paul Ricard: Welcome to Reinventing Insurance. Today, I’m delighted to welcome Ben Simpfendorfer with me, who’s a partner and the Asia Pacific (APAC) lead for the Oliver Wyman Forum. Welcome, Ben.

Ben Simpfendorfer: Thank you very much.

Paul: Ben, let’s start with a quick intro about yourself.

Ben: I’m a partner here at Oliver Wyman in Hong Kong. I’ve lived here for over 25 years, so it’s definitely home. I lead the firm’s leadership activities across the region. So, the Forum convenes senior leaders from across industries to talk about some of the hottest issues of the day. And we do that by putting together roundtables or publishing thought leadership. So, it’s a fabulous part of the business, particularly at this point in time with the global markets in such disruption.

Previously, I ran a business for 10 years, a consulting business. And we did a lot of work in Asia, the Middle East, and Africa, again, fast-growing emerging markets. But I equally had the pleasure of spending 10 years at the investment banks as a chief China economist at an exciting point in time when China was just emerging and really capturing the attention of global markets.

Paul: So, Hong Kong for 25 years, you’ve obviously seen things evolving in this part of the world for this long. What’s been, by the way, the most exciting and surprising things you’ve seen happening in these last 25 years in Asia, in Hong Kong and Greater China?

Ben: China’s explosion on the world stage was perhaps without a doubt number one. There was a period at the banks when we struggled to write anything about China that would capture global attention, and by 2003, that all changed. And all everyone wanted to hear was “China, China, China.”

At the same time, the country’s announcement of a "Belt and Road" initiative that really took the world by surprise as well, because China’s connectivity to markets across Asia, the Middle East, and Latin America really disrupted the way many multinationals did business. It changed the way they thought about the region. And then I’m sure we all mentioned the pandemic, especially here in Hong Kong, and how that changed the way that we do work and the way that we meet with clients. But there is no doubt this region is just fabulously exciting. And it is one thing I always tell myself: Every 18 months, you’ve got to relearn your assumptions about how this region does business. It’s exciting.

Paul: With that, I think we have a lot to unpack in the agenda today. You’ve recently been running it off, thought leadership around: “What will Asia look like in 2030 onward?” We’ll dive into this. “What are some of the mega trends?” “What are some of the hottest topics that are shaping the future of Asia?” Since we’re focused on the insurance ecosystem, we’ll discuss “What are some of the most disruptive forces that will shape the insurance industry?” And then to wrap this up, we will talk about what’s happening in the world, more broadly. What are some of the big global trends, whether they’re impacting Asia or the world more globally? So, we have an action-packed conversation ahead. How does that sound?

Ben: Sounds ideal. A lot to talk about!

Paul: Let’s dive in and talk about the forces and the mega trends that are shaping Asia. So maybe, first of all, do you want to share a little bit of context about the work that you’ve been doing recently on that front before we dive into the trends themselves?

Ben: So, mega trends are front and center for Boards, for executive teams. We’ve seen a convergence of trends, and I know we’re going to get into many of them, but everything from geopolitics to supply chain, to demographics, to technology, that is really shaking up the way that we think about our business models.

And so, we’ve tried to approach this in a number of ways. One is that we’re putting together roundtables across the region where we bring together senior executives from across industries, just to share their views on where they see both opportunities and challenges. And equally, putting together thought leadership on the topic, such as the CEO survey we recently did with the New York Stock Exchange (NYSE). This survey included more than 100 CEOs from companies listed on the New York Stock Exchange. We asked a series of questions on the forces impacting their businesses and the potential levers to respond to these forces.

Paul: You’ve looked into a range of scenarios of how Asia could evolve in the next few years. So, can you tell us a little bit more about that?

Ben: So, we see scenarios where the shift in supply chains, for instance, is rebalancing growth across the region. China used to be the single focus of most big multinationals by supply chain. Shifts in capital flows. Increasingly, multinationals are also excited about Southeast Asia, South Asia. That’s certainly one scenario we’re exploring, but there are others, such as a climate-impacted world, where rising flood risks and water scarcity risks are equally putting demands on governments to spend more on resilience. They change the way that corporates need to think about their footprint and their exposure to these potential risks. So, there are a number of scenarios out there we’re discussing.

Paul: So, diving into, let’s say, the growth rebalancing that you were talking about. I think you were talking a little bit earlier about China. Is there a doubling down on other parts of the world, other parts of Asia, from global companies? How do you see that evolving? What trends are happening? And what are the implications for the broad range of industries?

Ben: So, to put this into perspective, when you turn the clock back 10 years. China was growing. It doubled its current rate, growing at close to 10%. It accounts for more than 50% of the region’s economy. There was no surprise that multinationals, if they had to do anything, they would do it in China. China’s growth rates have since slowed and are now trending around 5%. At that level, markets such as India, Indonesia, and Vietnam are all growing at faster rates. Now, admittedly, their markets are smaller, but nevertheless, those growth rates become quite attractive. And so, we are seeing companies beginning to rethink where they invest their next dollar. Take Japanese firms as an example, whereas previously, they used to invest dollar-for-dollar into China or Southeast Asia, that has changed significantly. Very little investment is going into Japan. The same, if not more, investment is going into the Association of Southeast Asian Nations (ASEAN) as they look to capture some of those faster growth rates.

Paul: And does that link up with the demographic shifts as well that are happening in the region? I know this is also a scenario you’re looking into. I’m just curious how this is all intertwined between what we’re seeing in China, in various countries, and in Southeast Asia.

Ben: Demographics has a role to play. One of the reasons China grew so rapidly is that there was an abundant and seemingly infinite supply of young labor at the time. Well, that’s all changed over time. The youth demographic is in decline. It’s harder to get factory workers more than ever. So, that’s impacted growth rates overall. If growth rates are going to be sustained at this rate or accelerate, it needs to see significant productivity growth. And we can certainly chat about that later.

But perhaps what’s more interesting is that companies are now excited about the youth demographic in Southeast Asia. Now, not all of the region is young. Thailand is 10 years older than Malaysia, but when you look at markets such as India, Indonesia, and Malaysia, these are younger markets. These are markets where income levels are reaching a threshold, where households start to spend on big-ticket items.

Paul: Looking into what this means for insurers. Obviously, there’s an element of: “How do I rebalance my portfolio across the region?” “Where do I potentially place the right, the bigger bets?” As you were talking about the populations getting younger, there’s also an element of “How do I capture these younger populations?” “How do I capture these individuals early in their lives?” And stay with them throughout their lives.

Ben: Exactly. And your reference to rebalancing, I think, is particularly important. China is still very important for all of us. But there’s a recognition that perhaps we are over-indexed on China as compared to Southeast Asia. So now we’re just needing to correct that and to rebalance those portfolios and capture, to your point, some of these younger populations earlier in their careers or their insurance journey.

Paul: What are some other scenarios or big trends that you’re seeing across the region in these megatrends shaping Asia?

Ben: We’re also looking and thinking about the way financial markets are changing. This region increasingly funds itself, whereas previously we relied on capital from the rest of the world, such as Europe and the US. Over the last 10 years, the ground has shifted significantly. Japanese capital is more important than ever. Korean capital is more important than ever. And over time, we may begin to see more Chinese capital. And those internal intra-regional capital flows are really an important source of funding. At the same time, we’re seeing the development of non-bank players, who are perhaps finding it easier than ever to reach customers because of the digital transformations on the way. But we’re also seeing the growth of private markets relative to more conventional markets. So, there are some fabulous changes taking place within the region that are reshaping our financial sector and making us perhaps more inward-focused rather than outward-focused as compared to previous years.

Paul: And it’s interesting because if I look at the insurance industry, these trends are certainly applicable. There are multiple strands of more M&A activity that we are seeing in this region. We are seeing M&A activity from players across the globe, trying to get on the growth train in the region, and then intra-region as well. Japanese players in the insurance industry have been doing a ton of acquisitions in Southeast Asia, for example. The private markets trend is certainly something we’re seeing across the globe. And that’s happening here as well. I think if I look at this particular trend as compared to other parts of the world, I think it’s not as full steam as other parts of the globe right now, but it certainly seems like Asia is going to get there pretty quickly as well.

Ben: And there’s a recognition within the region that our capital markets are smaller than they should be. We saw a burst of activity in capital markets, post the 1997 Asian financial crisis,  as a share of gross domestic product (GDP) began to rise, but it plateaued around 2010 and hasn’t grown as much as we would have liked. Debt markets are smaller than they should be. Security players, regulators are all realizing that more work needs to be done here to increase the share of capital markets and just reduce the region’s reliance on non-bank financing.

Clients are always keen to talk about geopolitics. The world has certainly shifted over the last few years. I think there’s a lot of resiliency work that’s being done to think through sort of what the potential world would look like in the coming years and how businesses need to be structured to prepare for that and capture opportunities that may arise out of that.

Paul: And does that link to the climate point that you were talking about as well?

Ben: It does to a degree that societies are going to be under more stress than in the past, whether because of political changes or due to climate change. And so increasingly, we’re worried about the risks of population displacement, for instance, as flood risks rise, as drought conditions worsen, so societies are facing challenging years and challenging decades ahead.

Paul: As you ran these executive roundtables, as you had these conversations about these trends, what was the most intriguing reaction or the most intriguing takeaway that your audiences took from these various scenarios and their implications.

Ben: I think one of the more interesting scenarios, and this came out of a conversation we had at our Singapore roundtable, was the speed of technological change, particularly in Southeast Asia and South Asia.

There are a number of insurance players who were excited by the way smartphone adoption rates, among young populations, have provided a way for insurers to access new markets through digital solutions. Change can happen very quickly once that infrastructure is in place, so the key is to remain on top of, or at least constantly scanning the horizon to understand where the infrastructure is going when it’s near completion, and then moving quickly to make the most of it.

Paul: Let’s shift gears and talk with an insurance lens about these trends. The first one on my list is the rise and advent of new cities and how it’s no longer just about a handful of big cities, especially in Asia, but a consortium of different cities with different purposes. I know you’ve been digging into this, so can you give an overview and talk about the implications for insurers.

Ben: It’s a fascinating subject and a bit of an obsession of mine as well. And partly having worked with China for more than 20 years, I’ve had the chance to see the impact of the rise of mid-tier cities. Those mid-tier cities added GDP worth the size of France over a period of 10 years. So, that is a huge market in its own right. No surprise, you had companies or brands that have built out not just tens or hundreds of extra stores, but thousands of extra stores.

It was a very exciting stage in the world’s economic development. We’re now beginning to see echoes of that in Southeast Asia and South Asia. Why? Supply chains have been shifting, and they will continue to shift in spite of the recent introduction of higher tariffs. New manufacturing hubs in smaller or mid-tier cities mean stronger employment growth, income growth in their cities, and ultimately an expansion in our potential market. The Southeast Asia and South Asia region has approximately 500 mid-tier cities. Not all of them will thrive, but many of them will. And so, the question for companies is, “How do you identify where the next opportunity is?” “Where are the 10 or 20 opportunities that you should focus on as new potential markets?”

Paul: If I look at the insurance industry, from the life insurance industry, which has been a growing industry in this part of the world for all the reasons we’ve been talking about. There is a focus on tier-one cities. How do we go after these tier-two cities? But importantly, how do we engage with different, for lack of a better word, personas of populations? How do we evolve our offerings? How do we evolve the way we engage with them, the way we market to them as well? Are their needs different? There’s that element that represents a big opportunity. But this may also represent the need to drastically shift the way companies currently engage with customers and design their products.

Ben: So, one of the challenges we found with companies, and not just specific to the insurance sector, but all types of companies, whether it’s luxury goods brands or fast-moving consumer goods (FMCG) groups, is that they are primarily using just GDP and population to benchmark these cities. We know that’s not enough. What we need to understand is what industries are driving growth or attracting populations.

Let’s take some of these satellite cities, for example, Ho Chi Minh City. These are big manufacturing hubs, some of the world’s largest, and they’re attracting migrant labor from across the country. But equally, we’re seeing the emergence of a moneyed middle class who are typically factory owners. So, already you can begin to see two types of personas emerging. You then have other cities around the region that are primarily beneficiaries of national growth policies, increased infrastructure investment, whether it’s into markets, such as Indonesia’s Surabaya and Yogyakarta. And here, again, the personas are different. So, it might be more classes related to government functions. It might be classes related to more domestic demand-driven, manufacturing, or even agricultural production. But again, the personas can be quite different.

Paul: Recently, we published our "10 To Do’s For Insurance CEO In 2025." And one interesting thing is, we had organized customer-back for transformative growth, with the idea that in the insurance industry, many times there is a product-first approach. Where is the GDP? Where is the growth? Let’s sell our products. And there’s a need to shift this and start from the customer needs back. What are the different personas? What are these populations? What are the customer's needs? Okay, now, how can we evolve the way we serve them? That’s something where there is a massive opportunity for life insurance, for example.

But also, if we look at property and casualty insurers, what I find super interesting, as related to what you’ve shared, is that you now have manufacturing hubs, service hubs, and bigger talent pools. So, it’s different people, different needs, a lot of small businesses as well that are now coming in with different needs, insurance needs, and frankly, broad financial security needs that represent an untapped opportunity.

And oftentimes, the small business world represents that next frontier for insurers to go after. And you were sharing earlier on the digital frontiers. There’s an element where that model can evolve. You can really think customer-back and you can use digital to gain scale and go after these smaller and medium-sized enterprises (SME), in a way you haven’t had the opportunity before.

Ben: And scale is everything. Asia has three times the number of mid-size cities as compared to Europe and the United States. So, the question of scale is a completely different one. The challenge companies are trying to solve is: “How do we access consumers?” We can’t build brick-and-mortar stores. These markets are rapidly changing. So, the investments we make today may not make sense in a few years’ time. It’s the ability to move it at scale, to move its speed, and then be able to pivot to those new business models. And that’s the challenge many are facing.

Paul: Day-to-day, we work on this with our clients as well. With everything moving so fast, how can companies take advantage of these technology disruption trends, for example, and better serve their customers, better serve their markets, and also in a much more efficient way?

And that’s something that I found fascinating, having been in this part of the Asian business world. There is an element of chasing growth, but also looking to achieve it at scale and as efficiently as possible. To your point, if you just chase growth and open brick-and-mortar stores, you’re going to very quickly collapse under your own weight. So, constantly reinventing yourself is part of the opportunity.

Ben: So, this part of the world, whether it’s the sheer number of cities, it’s the breadth of personas, everything from a small business owner in Yogyakarta to a wealthy factory owner in Ho Chi Minh City, just that scale and breadth means we really need to reinvent the way that we do business in Asia.

Paul: Every country is different, has its own set of regulations, has its own populations, and every city has its own personas. There’s an element of: "How do you balance the right approach, the right mindset, but make it adaptable to every city, not even every country, but now every city, which I think you have 1,500 cities in the recently published report."

Ben: I’m reminded of e-commerce players, at least every market had a different payment system. Some were cash on delivery, some used QR codes, but it was a complex scenario for them to work through.

Paul: Another thing I wanted to talk about is the theme of longevity. Earlier, you shared how the population in Thailand, for example, is 10 years older than in many other parts of Southeast Asia, on average. The world overall, but Asia, in particular, is moving towards being older, on average, and that leads to a range of needs from a health standpoint, from an insurance standpoint. I’m sure if we were sitting down for this podcast discussion 10 years ago, we would have also said that longevity is a trend, and there are a lot of undercurrents that are driving it. What, in your view, has changed in the last few years on the longevity front?

Ben: The labor shortages perhaps drove that point home. So, 10 years ago, we would have talked about aging populations, but it didn’t feel real. Today, it feels real.

Hong Kong is an example. If you’re trying to find a truck driver who can help with e-commerce distribution, it’s very, very tough. Companies are now having to think through the ways that they can automate in order to replace labor. But equally and more importantly, having to tailor their propositions, whether it’s their goods or services that they’re looking to sell into this market. When I first arrived in Hong Kong, the average age was early 30s. Today it’s nearly 47. That’s an entirely different market that we’re selling into. And it’s one that shapes everything from obviously medical, but equally, even just risk-taking. In my view, there’s potentially a dampened entrepreneurial spirit here, as people are thinking now about entering that decumulation phase of their lives, it’s a very different outlook.

Paul: There’s an element focused on how do you better serve, as an insurer, these populations that are pre-retirement or closer to retirement. And not only help them, again, taking a customer back lens, not only help them with their insurance needs, but also offer assistance services that complement this. What’s the right ecosystem to serve these needs? There is actually a broader challenge, if you think about financial wellness more holistically, which is really at the intersection, not only of insurance, but also at the intersection of asset management, wealth management, and banking. For many people, there is no very clear path here. And as people age, there are also people who are taking care of the aging population. And how is all of this connected, and who is helping these individuals make progress on their financial journey feel more secure? It is still a very big and unaddressed gap.

This is not an easy problem to solve. it is a problem that hasn’t really been solved anywhere else in the world. And in a way, I think Asia is the place where that problem has to be solved first, because it’s probably where it’s the most prominent around the world.

Ben: So, I want to draw an analogy here with manufacturing. China is looking to use artificial intelligence (AI) through its manufacturing sector, in part to deal with labor shortage challenges in the aging of the population. I would like to think China will be leading the charge, because the country has obviously invested in the infrastructure to support this transition, but the outcome is still uncertain.

Paul: On a previous episode, we dug quite deeply into health insurance more holistically. Again, having scale is difficult. How do you provide the right level of care and the right service? And that’s where AI augmentation can be very interesting. So hopefully, a range of positive trends are helping on that front.

Ben: I’ve just come back from the Boao Forum for Asia (BFA), an annual conference and China’s flagship event, which brings together policymakers and business leaders from around the region. And one of the areas that shows the greatest excitement is the health sector. There are a number of reasons for that. First, the sector has opened up to greater foreign investment, but equally, there is the excitement around the way artificial intelligence is being applied to such things as personalized medicine, cancer treatment, and so forth. There is AI-enabled medical equipment that can ideally provide solutions at scale. And so ultimately, there was a reason that the CEOs of most of the global pharmaceutical companies were all recently in Beijing because they see an opportunity.

Paul: Shifting to another topic, which is somewhat adjacent but different: Wealth is obviously an important theme as well in Asia-Pacific. And we are also seeing growing wealth hubs, wealth corridors that facilitate trade, investment, and economic growth between different regions of Asia. Ben, anything you’d like to share on this trend?

Ben: The wealth corridor is exciting. And often, flows used to be into the US markets. This is obviously still very important. But increasingly, we’re seeing flows retained in the region and diversified across the region. We’re seeing flows from China out into Southeast Asia, with Singapore acting as a hub. But the Middle East is a place I am very familiar with, having worked in the region back in the 1990s and continuing to do work there. Recently, we were speaking with wealth managers and quite often heard comments that Middle East investors are looking to derisk, in part by bringing money into Singapore and into Hong Kong. So again, it echoes that the intra-regional or greater reliance on intra-regional capital, but in this case, wealth and those corridors could be quite impeccable for companies going forward.

Paul: And certainly, we are seeing a lot of activity across the value chain in the insurance industry, just like in the broader financial services industry. So certainly, an exciting one. The other one is Gen Z and younger populations. And we’ve done research on this population as a firm.

With Gen Z, insurers need to consider how do I engage with customers early in their lives, build relationships, build trust, and stay with them throughout their lives. How much value can I bring? So that’s one element. The other element is the opposite of what I was talking about with longevity, which is, how do I build a relationship with an entire household from the youngest, to the middle generation, to the elderly parents? And how can insurers become multi-generational problem solvers for financial needs?

Ben: It’s a fascinating area. If I could take a step back and say that the speed of change is perhaps the biggest challenge. You are dealing with a number of converging trends. Many of these markets are still developing. What households are prepared to spend on, even how households are set up economically, can look very different year-to-year.

At the same time, you have demographic change that is far outstripping what we saw in the rest of the world. The region is aging at twice, if not three times, the rate of what we saw in Europe as an example. And then you throw in the Gen Z factor, which, while there are similarities to Gen Zers around the world, there are also clear differences. Trying to get a handle on this is one of the challenges that many insurers face in this region. It’s not an easy one, but in my view, there needs to be dedicated efforts in trying to understand what these changes mean. It can’t be a part-time initiative.

Paul: Linking this up to the bigger objective. If I’m just going to go after this population at this point in time, is it worth it? And in some industries, it might very well be worth it from the outset. In the insurance industry, it might not necessarily be worth it from the outset. If you think about more holistic solutions, the longer-term horizon, that becomes a very different type of business. But I agree with you. There is a shift towards “let’s spend time understanding these younger populations,” who are quickly evolving. The pace of change is increasing. These populations can oftentimes be trendsetters as well in terms of media consumption and other things. I see the focus on younger generations happening more and more.

Ben: Chinese consumer goods companies and their behaviors are quite instructive at this point. They tend to throw out a large number of products over a short period of time. And 12 months later, maybe only a handful of those products still exist, but it’s trial and error. And their global peers, whether in Europe or the US, have really struggled to replicate this, because it’s an entirely different approach to strategy. They see it as a cost. How could you afford to invest in so many products? But for these consumer goods companies, their response is: “It’s the only way we can test in a fast-moving market. It’s the only way we can identify where we really need to double down, because otherwise we’re just guessing.”

Paul: These are some of the trends we are seeing in the insurance industry. But as they are linked to the megatrends, what role will regulation play in that world? And how much of it is about climate change? How much of this is focused on the “assist and support” versus the “predict and prevent,” which is an age-old debate in the insurance industry as well. In the US, for example, a lot of that is happening right now.

Ben: The government debt levels across the region rose quite sharply because of the pandemic and the amount of funds that needed to be spent. And government finances are relatively constrained at the moment. And at a point, more investment will be needed in resilience, more investment in the health and aging populations. It won’t be possible for them to find sufficient funds. And so there will be gaps. And the private sector will be looked towards to fill some of those gaps, whether it’s specific to climate resilience, or whether it’s specific to insurance coverage. It’s one of the big challenges for governments, especially in Southeast Asia, over the coming decade.

Paul: If I think about the transition to green energy, alongside trends in climate change, insuring green projects can be very difficult. For example, if you’re going to be insuring wind farms, they are usually in high catastrophe-prone areas, which means they carry quite a bit of risk and uncertainty for insurers. So, how do you accompany these projects? And how do you do this in a sustainable way? This is a challenge that the insurance industry is grappling with both globally and in Asia as well.

Ben: Yes, and it’s not just the insurance sector. There is a range of multinational banks out there, all trying to solve the same problem, particularly around greenfield financing. It is not easy, and governments can’t be expected to fill the gap given the constraints that they currently face.

Paul: It would be great to get your take on additional global trends. Let’s step out of Asia for a second. What are global trends to watch out for?

Ben: To some degree, the global trends reflect what we’re seeing here in Asia because of the importance of the region. So again, we’re looking at supply chain shifts and what that means for the rest of the world. I was only recently in Turkey, as well as Morocco, seeing the impact that the shifts in manufacturing have on local populations in those markets. Again, it’s a story of employment and income. It really is a region-wide effect, and at the same time, China to the Middle East, and that trade corridor.

I’ve been repeatedly back to the Middle East over the last few years. The New Silk Road resurrection. Some of the changes seen in the United Arab Emirates (UAE) and Saudi Arabia at the moment are particularly exciting. The speed at which governments are investing in their non-oil sectors and more advanced sectors, including artificial intelligence, to future-proof their own economies. So far, insurance has been perhaps less on the radar than it could have been, as the focus is more on industrial strategy, but inevitably, that will become a hot topic, not just for the Gulf but also for the broader region.

Paul: Anything to share about the US and what’s happening there?

Ben: The US is certainly in a state of change. We are witnessing an attempt to reindustrialize the country. The concern for those of us out here in Asia is that we have benefited enormously and continue to rely on globalization and the free movement of capital and goods. And so the question is how we can stay integrated with the US economy, because we clearly want to, and it’s a longtime ally for many of us. And we’re still puzzled over that question to a degree. But equally, I would emphasize that the US is important to the region and to the world.

Paul: Another point, in the chase for growth and for resilience, is an increasing amount of M&A in the insurance industry, especially if I think about the property and casualty industry. There are periods where prices are increasing and decreasing based on what we’re seeing happening around the world. Right now, organic growth is harder to achieve. And therefore, inorganic growth becomes a lever, especially for the property and casualty (P&C) players. And we’re seeing this as insurers chase growth and strive to increase resilience — both globally as well as in this region.

Ben: There’s a growing recognition that the conglomerate model may not work as well as it did in the past, largely because the region is increasingly fragmented. In the face of geopolitics, supply chain shifts, and nationalist growth policies, conglomerates don’t quite have the same edge they used to. There’s a need to spin off and extract value. I see M&A as an opportunity going forward.

Paul: Linked to this are partnerships in the insurance industry. Partnerships are critical between insurers and other players across the value chain. In Asia Pacific, bancassurance, for example, is a very important way for insurers to reach customers. And this is about how you bring together the strengths of the bank and the strengths of the insurer, in a value proposition for customers. I think more broadly, there is value in building these ecosystems, but a lot of challenges come with it. Incentives need to be aligned, which is difficult to achieve. They need to be aligned for the long term. Again, curious what you’re seeing across industries on that front.

Ben: So, across industries, partnerships have become more and more important. Going back to our early conversation around scale, scale is very difficult to achieve organically. Partnerships are often the only way to go and achieve this, especially in a world of technological disruption. Partnerships bring unique, competitive advantages.

Partnerships are perhaps more important in our part of the world, here in Asia, than they might be in other parts of the world, where markets tend to be more stable, more unified, and more predictable. So, across industries, we see partnerships being prioritized by the large corporations. As we move into a more unpredictable world of heightened geopolitical tensions, partnerships are another way to derisk some of those tensions and to ensure that companies continue to sell and access as many markets as possible while also protecting themselves from potential disruption further down the line. I would suggest there may be similarities in the insurance sector.

Paul: Companies and insurers, in particular, need to spend more time building their equity narrative addressed at shareholders, but frankly, a broader group of stakeholders as well — from internally driving alignments within the organization on “what are we doing” and “why we’re doing this,” to engaging with a broad group of shareholders that can include the everyday investor. At Oliver Wyman, our research found that if you take CFOs, a high percentage will say a good equity story is important, but only approximately 50% will tell you that they actually have a good hold on the equity story. How have you seen this evolving, especially in this part of the world?

Ben: Chatting with an Asia Pacific CEO just the other day, the CEO made that point, and said, in order to thrive, they are increasingly having to build out their relationships with the local governments — that can include their core businesses right through to their recycling businesses. So, it is more important than ever. At the same time, in a world where governments are increasingly populist or taking more nationalist approaches, some of our roundtables have hinted at the fact that the equity story is perhaps more difficult than in the past. This may be due to selling or working with stakeholders in different markets, often competing markets, and trying to keep everyone happy.

Paul: I kept AI for the last bit of our conversation. The stance we’ve shared prior is that you should not start with AI for the sake of AI, but start with the bigger transformation objective, and work back from this and use AI as one tool, one that is rapidly evolving, but one of many that is available to leverage for that transformation.

If I look at the insurance industry, it’s fascinating that out of all the regions, insurers in Asia are the ones who have most rapidly adopted AI solutions and implemented them. Having said that, we still need to make the shift away from many POCs (proof of concept) and move towards a transformation-led use of AI. What’s your broader perspective on AI?

Ben: I think the sector could draw lessons from the manufacturing industry and the challenges around automation. There’s a sense that you just buy a few robots, stick them on your production line, and productivity rises. But it never works out that way, because what you find is that all of a sudden, the robots are working twice as fast as the rest of your factory line, and you end up with this huge stock of unfinished goods. The question is, how do you apply technology to a specific part of the line where it improves overall productivity and doesn’t create bottlenecks?

The question around artificial intelligence is not rethinking your entire business, but how can you apply it systematically so that it improves overall productivity, without being wholly disruptive to your business? Those small proof-of-concept projects become very important at this point. Proof of concept is not just in a single market, but in multiple markets around the region, and then learning through trial and error.

Paul: So, I really like how we really observed an entire collision of megatrends — starting from now in Asia and going into 2030 onwards. The major shifts we’re seeing in the insurance industry and looking at these more global trends. What are some final words of wisdom you have for our audience?

Ben: Get prepared for more disruption. I think horizon scanning is more important than ever, with a focus on short-term objectives. Keeping an eye out for long-term shifts in the market will be more important than ever. And that’s going to require building new skill sets, developing new muscles. It’s not straightforward.

Paul: Thank you so much, Ben. It was great having you join us here today in Hong Kong.

Ben: It was a pleasure. Thank you.

Paul: Terrific. Thank you, everyone. That was Ben, who is the Asia Pacific lead for the Oliver Wyman Forum. I’m Paul. Thanks for listening, and I’ll see you next time.

This transcript has been edited for clarity.

In this episode of Reinventing Insurance, Ben Simpfendorfer from the Oliver Wyman Forum joins our host Paul Ricard, to discuss Asia’s role in a rebalancing world and the megatrends that are shaping the future of insurance. Based in Hong Kong, Ben brings over 25 years of experience working in Asia and the Middle East, and has extensive knowledge of the local markets. He is a regular commentator on Bloomberg and CNBC and a key opinion leader on LinkedIn with over 440,000 followers.

As the world continues to evolve in this uncertain economic and geopolitical environment, insurers must be proactive in adapting to supply chain impacts, demographic shifts, and the need for technological advancements. Remaining agile and embracing innovation is crucial for capturing new markets and addressing the diverse needs of consumers across Asia.

In this episode, Paul and Ben share their perspectives on:

• The collision of mega trends, supply chain shifts, and emerging markets for insurers in Asia
• The Gen Z factor, demographic change, longevity and the aging population offer insurance opportunities for new product and service offerings
• The increase in mergers and acquisitions, and partnerships within the insurance industry
• Climate change, the green energy transition, and the need for adaptation and resilience
• Moving towards a transformation-led approach to generative artificial intelligence (AI)

This episode is part of our Reinventing Insurance series, a series that explores best practices for taking a CustomerFirst approach to innovation within Insurance. Throughout this series, host Paul Ricard discusses lessons, challenges, and new ways of working with guests who will share their first-hand experiences.

Subscribe for more on: Apple Podcasts | Spotify

As an Oliver Wyman Partner based in Hong Kong, Ben Simpfendorfer is part of the Finance and Risk Practice and leads Oliver Wyman Forum’s initiatives in Asia. He drives data analytics solutions for clients across Asia.

Based in Hong Kong, Ben brings over 25 years of experience working in Asia and the Middle East, with extensive knowledge of the local markets. He is the former CEO of Silk Road Associates, which has now joined forces with Oliver Wyman. While in that role, he advised Fortune 500 multinationals and leading Asian firms on their commercial strategies in China, Southeast Asia, the Middle East, and Africa, and advising CEOs and executive boards worldwide.  

Ben is a leading expert on China’s Belt and Road Initiative (BRI). He is also a member of the Middle East Advisory Group at the Financial Services Development Council, a high-level, cross-sectoral advisory body established by the Government of the Hong Kong Special Administrative Region. Additionally, Ben is a board member of the Pacific Basin Economic Council and has previously held positions as an executive committee and board member of the American Chamber of Commerce in Hong Kong.

Recently, he published a refreshed edition of “The New Silk Road,” which highlights the rapidly growing economies of Asia and the Middle East. Additionally, he authored “The Cities Shaping The Future,” an index that ranks the business attractiveness of 1,500 cities across Asia, Africa, Latin America, and the Middle East.

Ben speaks Mandarin and Arabic. He is a regular commentator on Bloomberg and CNBC and a key opinion leader on LinkedIn with over 440,000 followers.

Our Host

Oliver Wyman Partner and Head of our Asia Pacific Insurance and Asset Management Practice, Paul Ricard is based in Singapore. Paul works closely with businesses to reinvent their strategies, products, and services — and to fuel top-line growth opportunities.

He works with clients across Asia Pacific, as well as the Americas and Europe. He regularly partners with firms to reinvent their business strategy, rethink their priorities, and to modernize their technology while accounting for rapidly changing customer needs. He understands his clients’ realities, and thrives on helping them innovate and strengthen relationships with their customers while factoring existing challenges.

Paul Ricard: Welcome to Reinventing Insurance. Today, I’m delighted to welcome Ben Simpfendorfer with me, who’s a partner and the Asia Pacific (APAC) lead for the Oliver Wyman Forum. Welcome, Ben.

Ben Simpfendorfer: Thank you very much.

Paul: Ben, let’s start with a quick intro about yourself.

Ben: I’m a partner here at Oliver Wyman in Hong Kong. I’ve lived here for over 25 years, so it’s definitely home. I lead the firm’s leadership activities across the region. So, the Forum convenes senior leaders from across industries to talk about some of the hottest issues of the day. And we do that by putting together roundtables or publishing thought leadership. So, it’s a fabulous part of the business, particularly at this point in time with the global markets in such disruption.

Previously, I ran a business for 10 years, a consulting business. And we did a lot of work in Asia, the Middle East, and Africa, again, fast-growing emerging markets. But I equally had the pleasure of spending 10 years at the investment banks as a chief China economist at an exciting point in time when China was just emerging and really capturing the attention of global markets.

Paul: So, Hong Kong for 25 years, you’ve obviously seen things evolving in this part of the world for this long. What’s been, by the way, the most exciting and surprising things you’ve seen happening in these last 25 years in Asia, in Hong Kong and Greater China?

Ben: China’s explosion on the world stage was perhaps without a doubt number one. There was a period at the banks when we struggled to write anything about China that would capture global attention, and by 2003, that all changed. And all everyone wanted to hear was “China, China, China.”

At the same time, the country’s announcement of a "Belt and Road" initiative that really took the world by surprise as well, because China’s connectivity to markets across Asia, the Middle East, and Latin America really disrupted the way many multinationals did business. It changed the way they thought about the region. And then I’m sure we all mentioned the pandemic, especially here in Hong Kong, and how that changed the way that we do work and the way that we meet with clients. But there is no doubt this region is just fabulously exciting. And it is one thing I always tell myself: Every 18 months, you’ve got to relearn your assumptions about how this region does business. It’s exciting.

Paul: With that, I think we have a lot to unpack in the agenda today. You’ve recently been running it off, thought leadership around: “What will Asia look like in 2030 onward?” We’ll dive into this. “What are some of the mega trends?” “What are some of the hottest topics that are shaping the future of Asia?” Since we’re focused on the insurance ecosystem, we’ll discuss “What are some of the most disruptive forces that will shape the insurance industry?” And then to wrap this up, we will talk about what’s happening in the world, more broadly. What are some of the big global trends, whether they’re impacting Asia or the world more globally? So, we have an action-packed conversation ahead. How does that sound?

Ben: Sounds ideal. A lot to talk about!

Paul: Let’s dive in and talk about the forces and the mega trends that are shaping Asia. So maybe, first of all, do you want to share a little bit of context about the work that you’ve been doing recently on that front before we dive into the trends themselves?

Ben: So, mega trends are front and center for Boards, for executive teams. We’ve seen a convergence of trends, and I know we’re going to get into many of them, but everything from geopolitics to supply chain, to demographics, to technology, that is really shaking up the way that we think about our business models.

And so, we’ve tried to approach this in a number of ways. One is that we’re putting together roundtables across the region where we bring together senior executives from across industries, just to share their views on where they see both opportunities and challenges. And equally, putting together thought leadership on the topic, such as the CEO survey we recently did with the New York Stock Exchange (NYSE). This survey included more than 100 CEOs from companies listed on the New York Stock Exchange. We asked a series of questions on the forces impacting their businesses and the potential levers to respond to these forces.

Paul: You’ve looked into a range of scenarios of how Asia could evolve in the next few years. So, can you tell us a little bit more about that?

Ben: So, we see scenarios where the shift in supply chains, for instance, is rebalancing growth across the region. China used to be the single focus of most big multinationals by supply chain. Shifts in capital flows. Increasingly, multinationals are also excited about Southeast Asia, South Asia. That’s certainly one scenario we’re exploring, but there are others, such as a climate-impacted world, where rising flood risks and water scarcity risks are equally putting demands on governments to spend more on resilience. They change the way that corporates need to think about their footprint and their exposure to these potential risks. So, there are a number of scenarios out there we’re discussing.

Paul: So, diving into, let’s say, the growth rebalancing that you were talking about. I think you were talking a little bit earlier about China. Is there a doubling down on other parts of the world, other parts of Asia, from global companies? How do you see that evolving? What trends are happening? And what are the implications for the broad range of industries?

Ben: So, to put this into perspective, when you turn the clock back 10 years. China was growing. It doubled its current rate, growing at close to 10%. It accounts for more than 50% of the region’s economy. There was no surprise that multinationals, if they had to do anything, they would do it in China. China’s growth rates have since slowed and are now trending around 5%. At that level, markets such as India, Indonesia, and Vietnam are all growing at faster rates. Now, admittedly, their markets are smaller, but nevertheless, those growth rates become quite attractive. And so, we are seeing companies beginning to rethink where they invest their next dollar. Take Japanese firms as an example, whereas previously, they used to invest dollar-for-dollar into China or Southeast Asia, that has changed significantly. Very little investment is going into Japan. The same, if not more, investment is going into the Association of Southeast Asian Nations (ASEAN) as they look to capture some of those faster growth rates.

Paul: And does that link up with the demographic shifts as well that are happening in the region? I know this is also a scenario you’re looking into. I’m just curious how this is all intertwined between what we’re seeing in China, in various countries, and in Southeast Asia.

Ben: Demographics has a role to play. One of the reasons China grew so rapidly is that there was an abundant and seemingly infinite supply of young labor at the time. Well, that’s all changed over time. The youth demographic is in decline. It’s harder to get factory workers more than ever. So, that’s impacted growth rates overall. If growth rates are going to be sustained at this rate or accelerate, it needs to see significant productivity growth. And we can certainly chat about that later.

But perhaps what’s more interesting is that companies are now excited about the youth demographic in Southeast Asia. Now, not all of the region is young. Thailand is 10 years older than Malaysia, but when you look at markets such as India, Indonesia, and Malaysia, these are younger markets. These are markets where income levels are reaching a threshold, where households start to spend on big-ticket items.

Paul: Looking into what this means for insurers. Obviously, there’s an element of: “How do I rebalance my portfolio across the region?” “Where do I potentially place the right, the bigger bets?” As you were talking about the populations getting younger, there’s also an element of “How do I capture these younger populations?” “How do I capture these individuals early in their lives?” And stay with them throughout their lives.

Ben: Exactly. And your reference to rebalancing, I think, is particularly important. China is still very important for all of us. But there’s a recognition that perhaps we are over-indexed on China as compared to Southeast Asia. So now we’re just needing to correct that and to rebalance those portfolios and capture, to your point, some of these younger populations earlier in their careers or their insurance journey.

Paul: What are some other scenarios or big trends that you’re seeing across the region in these megatrends shaping Asia?

Ben: We’re also looking and thinking about the way financial markets are changing. This region increasingly funds itself, whereas previously we relied on capital from the rest of the world, such as Europe and the US. Over the last 10 years, the ground has shifted significantly. Japanese capital is more important than ever. Korean capital is more important than ever. And over time, we may begin to see more Chinese capital. And those internal intra-regional capital flows are really an important source of funding. At the same time, we’re seeing the development of non-bank players, who are perhaps finding it easier than ever to reach customers because of the digital transformations on the way. But we’re also seeing the growth of private markets relative to more conventional markets. So, there are some fabulous changes taking place within the region that are reshaping our financial sector and making us perhaps more inward-focused rather than outward-focused as compared to previous years.

Paul: And it’s interesting because if I look at the insurance industry, these trends are certainly applicable. There are multiple strands of more M&A activity that we are seeing in this region. We are seeing M&A activity from players across the globe, trying to get on the growth train in the region, and then intra-region as well. Japanese players in the insurance industry have been doing a ton of acquisitions in Southeast Asia, for example. The private markets trend is certainly something we’re seeing across the globe. And that’s happening here as well. I think if I look at this particular trend as compared to other parts of the world, I think it’s not as full steam as other parts of the globe right now, but it certainly seems like Asia is going to get there pretty quickly as well.

Ben: And there’s a recognition within the region that our capital markets are smaller than they should be. We saw a burst of activity in capital markets, post the 1997 Asian financial crisis,  as a share of gross domestic product (GDP) began to rise, but it plateaued around 2010 and hasn’t grown as much as we would have liked. Debt markets are smaller than they should be. Security players, regulators are all realizing that more work needs to be done here to increase the share of capital markets and just reduce the region’s reliance on non-bank financing.

Clients are always keen to talk about geopolitics. The world has certainly shifted over the last few years. I think there’s a lot of resiliency work that’s being done to think through sort of what the potential world would look like in the coming years and how businesses need to be structured to prepare for that and capture opportunities that may arise out of that.

Paul: And does that link to the climate point that you were talking about as well?

Ben: It does to a degree that societies are going to be under more stress than in the past, whether because of political changes or due to climate change. And so increasingly, we’re worried about the risks of population displacement, for instance, as flood risks rise, as drought conditions worsen, so societies are facing challenging years and challenging decades ahead.

Paul: As you ran these executive roundtables, as you had these conversations about these trends, what was the most intriguing reaction or the most intriguing takeaway that your audiences took from these various scenarios and their implications.

Ben: I think one of the more interesting scenarios, and this came out of a conversation we had at our Singapore roundtable, was the speed of technological change, particularly in Southeast Asia and South Asia.

There are a number of insurance players who were excited by the way smartphone adoption rates, among young populations, have provided a way for insurers to access new markets through digital solutions. Change can happen very quickly once that infrastructure is in place, so the key is to remain on top of, or at least constantly scanning the horizon to understand where the infrastructure is going when it’s near completion, and then moving quickly to make the most of it.

Paul: Let’s shift gears and talk with an insurance lens about these trends. The first one on my list is the rise and advent of new cities and how it’s no longer just about a handful of big cities, especially in Asia, but a consortium of different cities with different purposes. I know you’ve been digging into this, so can you give an overview and talk about the implications for insurers.

Ben: It’s a fascinating subject and a bit of an obsession of mine as well. And partly having worked with China for more than 20 years, I’ve had the chance to see the impact of the rise of mid-tier cities. Those mid-tier cities added GDP worth the size of France over a period of 10 years. So, that is a huge market in its own right. No surprise, you had companies or brands that have built out not just tens or hundreds of extra stores, but thousands of extra stores.

It was a very exciting stage in the world’s economic development. We’re now beginning to see echoes of that in Southeast Asia and South Asia. Why? Supply chains have been shifting, and they will continue to shift in spite of the recent introduction of higher tariffs. New manufacturing hubs in smaller or mid-tier cities mean stronger employment growth, income growth in their cities, and ultimately an expansion in our potential market. The Southeast Asia and South Asia region has approximately 500 mid-tier cities. Not all of them will thrive, but many of them will. And so, the question for companies is, “How do you identify where the next opportunity is?” “Where are the 10 or 20 opportunities that you should focus on as new potential markets?”

Paul: If I look at the insurance industry, from the life insurance industry, which has been a growing industry in this part of the world for all the reasons we’ve been talking about. There is a focus on tier-one cities. How do we go after these tier-two cities? But importantly, how do we engage with different, for lack of a better word, personas of populations? How do we evolve our offerings? How do we evolve the way we engage with them, the way we market to them as well? Are their needs different? There’s that element that represents a big opportunity. But this may also represent the need to drastically shift the way companies currently engage with customers and design their products.

Ben: So, one of the challenges we found with companies, and not just specific to the insurance sector, but all types of companies, whether it’s luxury goods brands or fast-moving consumer goods (FMCG) groups, is that they are primarily using just GDP and population to benchmark these cities. We know that’s not enough. What we need to understand is what industries are driving growth or attracting populations.

Let’s take some of these satellite cities, for example, Ho Chi Minh City. These are big manufacturing hubs, some of the world’s largest, and they’re attracting migrant labor from across the country. But equally, we’re seeing the emergence of a moneyed middle class who are typically factory owners. So, already you can begin to see two types of personas emerging. You then have other cities around the region that are primarily beneficiaries of national growth policies, increased infrastructure investment, whether it’s into markets, such as Indonesia’s Surabaya and Yogyakarta. And here, again, the personas are different. So, it might be more classes related to government functions. It might be classes related to more domestic demand-driven, manufacturing, or even agricultural production. But again, the personas can be quite different.

Paul: Recently, we published our "10 To Do’s For Insurance CEO In 2025." And one interesting thing is, we had organized customer-back for transformative growth, with the idea that in the insurance industry, many times there is a product-first approach. Where is the GDP? Where is the growth? Let’s sell our products. And there’s a need to shift this and start from the customer needs back. What are the different personas? What are these populations? What are the customer's needs? Okay, now, how can we evolve the way we serve them? That’s something where there is a massive opportunity for life insurance, for example.

But also, if we look at property and casualty insurers, what I find super interesting, as related to what you’ve shared, is that you now have manufacturing hubs, service hubs, and bigger talent pools. So, it’s different people, different needs, a lot of small businesses as well that are now coming in with different needs, insurance needs, and frankly, broad financial security needs that represent an untapped opportunity.

And oftentimes, the small business world represents that next frontier for insurers to go after. And you were sharing earlier on the digital frontiers. There’s an element where that model can evolve. You can really think customer-back and you can use digital to gain scale and go after these smaller and medium-sized enterprises (SME), in a way you haven’t had the opportunity before.

Ben: And scale is everything. Asia has three times the number of mid-size cities as compared to Europe and the United States. So, the question of scale is a completely different one. The challenge companies are trying to solve is: “How do we access consumers?” We can’t build brick-and-mortar stores. These markets are rapidly changing. So, the investments we make today may not make sense in a few years’ time. It’s the ability to move it at scale, to move its speed, and then be able to pivot to those new business models. And that’s the challenge many are facing.

Paul: Day-to-day, we work on this with our clients as well. With everything moving so fast, how can companies take advantage of these technology disruption trends, for example, and better serve their customers, better serve their markets, and also in a much more efficient way?

And that’s something that I found fascinating, having been in this part of the Asian business world. There is an element of chasing growth, but also looking to achieve it at scale and as efficiently as possible. To your point, if you just chase growth and open brick-and-mortar stores, you’re going to very quickly collapse under your own weight. So, constantly reinventing yourself is part of the opportunity.

Ben: So, this part of the world, whether it’s the sheer number of cities, it’s the breadth of personas, everything from a small business owner in Yogyakarta to a wealthy factory owner in Ho Chi Minh City, just that scale and breadth means we really need to reinvent the way that we do business in Asia.

Paul: Every country is different, has its own set of regulations, has its own populations, and every city has its own personas. There’s an element of: "How do you balance the right approach, the right mindset, but make it adaptable to every city, not even every country, but now every city, which I think you have 1,500 cities in the recently published report."

Ben: I’m reminded of e-commerce players, at least every market had a different payment system. Some were cash on delivery, some used QR codes, but it was a complex scenario for them to work through.

Paul: Another thing I wanted to talk about is the theme of longevity. Earlier, you shared how the population in Thailand, for example, is 10 years older than in many other parts of Southeast Asia, on average. The world overall, but Asia, in particular, is moving towards being older, on average, and that leads to a range of needs from a health standpoint, from an insurance standpoint. I’m sure if we were sitting down for this podcast discussion 10 years ago, we would have also said that longevity is a trend, and there are a lot of undercurrents that are driving it. What, in your view, has changed in the last few years on the longevity front?

Ben: The labor shortages perhaps drove that point home. So, 10 years ago, we would have talked about aging populations, but it didn’t feel real. Today, it feels real.

Hong Kong is an example. If you’re trying to find a truck driver who can help with e-commerce distribution, it’s very, very tough. Companies are now having to think through the ways that they can automate in order to replace labor. But equally and more importantly, having to tailor their propositions, whether it’s their goods or services that they’re looking to sell into this market. When I first arrived in Hong Kong, the average age was early 30s. Today it’s nearly 47. That’s an entirely different market that we’re selling into. And it’s one that shapes everything from obviously medical, but equally, even just risk-taking. In my view, there’s potentially a dampened entrepreneurial spirit here, as people are thinking now about entering that decumulation phase of their lives, it’s a very different outlook.

Paul: There’s an element focused on how do you better serve, as an insurer, these populations that are pre-retirement or closer to retirement. And not only help them, again, taking a customer back lens, not only help them with their insurance needs, but also offer assistance services that complement this. What’s the right ecosystem to serve these needs? There is actually a broader challenge, if you think about financial wellness more holistically, which is really at the intersection, not only of insurance, but also at the intersection of asset management, wealth management, and banking. For many people, there is no very clear path here. And as people age, there are also people who are taking care of the aging population. And how is all of this connected, and who is helping these individuals make progress on their financial journey feel more secure? It is still a very big and unaddressed gap.

This is not an easy problem to solve. it is a problem that hasn’t really been solved anywhere else in the world. And in a way, I think Asia is the place where that problem has to be solved first, because it’s probably where it’s the most prominent around the world.

Ben: So, I want to draw an analogy here with manufacturing. China is looking to use artificial intelligence (AI) through its manufacturing sector, in part to deal with labor shortage challenges in the aging of the population. I would like to think China will be leading the charge, because the country has obviously invested in the infrastructure to support this transition, but the outcome is still uncertain.

Paul: On a previous episode, we dug quite deeply into health insurance more holistically. Again, having scale is difficult. How do you provide the right level of care and the right service? And that’s where AI augmentation can be very interesting. So hopefully, a range of positive trends are helping on that front.

Ben: I’ve just come back from the Boao Forum for Asia (BFA), an annual conference and China’s flagship event, which brings together policymakers and business leaders from around the region. And one of the areas that shows the greatest excitement is the health sector. There are a number of reasons for that. First, the sector has opened up to greater foreign investment, but equally, there is the excitement around the way artificial intelligence is being applied to such things as personalized medicine, cancer treatment, and so forth. There is AI-enabled medical equipment that can ideally provide solutions at scale. And so ultimately, there was a reason that the CEOs of most of the global pharmaceutical companies were all recently in Beijing because they see an opportunity.

Paul: Shifting to another topic, which is somewhat adjacent but different: Wealth is obviously an important theme as well in Asia-Pacific. And we are also seeing growing wealth hubs, wealth corridors that facilitate trade, investment, and economic growth between different regions of Asia. Ben, anything you’d like to share on this trend?

Ben: The wealth corridor is exciting. And often, flows used to be into the US markets. This is obviously still very important. But increasingly, we’re seeing flows retained in the region and diversified across the region. We’re seeing flows from China out into Southeast Asia, with Singapore acting as a hub. But the Middle East is a place I am very familiar with, having worked in the region back in the 1990s and continuing to do work there. Recently, we were speaking with wealth managers and quite often heard comments that Middle East investors are looking to derisk, in part by bringing money into Singapore and into Hong Kong. So again, it echoes that the intra-regional or greater reliance on intra-regional capital, but in this case, wealth and those corridors could be quite impeccable for companies going forward.

Paul: And certainly, we are seeing a lot of activity across the value chain in the insurance industry, just like in the broader financial services industry. So certainly, an exciting one. The other one is Gen Z and younger populations. And we’ve done research on this population as a firm.

With Gen Z, insurers need to consider how do I engage with customers early in their lives, build relationships, build trust, and stay with them throughout their lives. How much value can I bring? So that’s one element. The other element is the opposite of what I was talking about with longevity, which is, how do I build a relationship with an entire household from the youngest, to the middle generation, to the elderly parents? And how can insurers become multi-generational problem solvers for financial needs?

Ben: It’s a fascinating area. If I could take a step back and say that the speed of change is perhaps the biggest challenge. You are dealing with a number of converging trends. Many of these markets are still developing. What households are prepared to spend on, even how households are set up economically, can look very different year-to-year.

At the same time, you have demographic change that is far outstripping what we saw in the rest of the world. The region is aging at twice, if not three times, the rate of what we saw in Europe as an example. And then you throw in the Gen Z factor, which, while there are similarities to Gen Zers around the world, there are also clear differences. Trying to get a handle on this is one of the challenges that many insurers face in this region. It’s not an easy one, but in my view, there needs to be dedicated efforts in trying to understand what these changes mean. It can’t be a part-time initiative.

Paul: Linking this up to the bigger objective. If I’m just going to go after this population at this point in time, is it worth it? And in some industries, it might very well be worth it from the outset. In the insurance industry, it might not necessarily be worth it from the outset. If you think about more holistic solutions, the longer-term horizon, that becomes a very different type of business. But I agree with you. There is a shift towards “let’s spend time understanding these younger populations,” who are quickly evolving. The pace of change is increasing. These populations can oftentimes be trendsetters as well in terms of media consumption and other things. I see the focus on younger generations happening more and more.

Ben: Chinese consumer goods companies and their behaviors are quite instructive at this point. They tend to throw out a large number of products over a short period of time. And 12 months later, maybe only a handful of those products still exist, but it’s trial and error. And their global peers, whether in Europe or the US, have really struggled to replicate this, because it’s an entirely different approach to strategy. They see it as a cost. How could you afford to invest in so many products? But for these consumer goods companies, their response is: “It’s the only way we can test in a fast-moving market. It’s the only way we can identify where we really need to double down, because otherwise we’re just guessing.”

Paul: These are some of the trends we are seeing in the insurance industry. But as they are linked to the megatrends, what role will regulation play in that world? And how much of it is about climate change? How much of this is focused on the “assist and support” versus the “predict and prevent,” which is an age-old debate in the insurance industry as well. In the US, for example, a lot of that is happening right now.

Ben: The government debt levels across the region rose quite sharply because of the pandemic and the amount of funds that needed to be spent. And government finances are relatively constrained at the moment. And at a point, more investment will be needed in resilience, more investment in the health and aging populations. It won’t be possible for them to find sufficient funds. And so there will be gaps. And the private sector will be looked towards to fill some of those gaps, whether it’s specific to climate resilience, or whether it’s specific to insurance coverage. It’s one of the big challenges for governments, especially in Southeast Asia, over the coming decade.

Paul: If I think about the transition to green energy, alongside trends in climate change, insuring green projects can be very difficult. For example, if you’re going to be insuring wind farms, they are usually in high catastrophe-prone areas, which means they carry quite a bit of risk and uncertainty for insurers. So, how do you accompany these projects? And how do you do this in a sustainable way? This is a challenge that the insurance industry is grappling with both globally and in Asia as well.

Ben: Yes, and it’s not just the insurance sector. There is a range of multinational banks out there, all trying to solve the same problem, particularly around greenfield financing. It is not easy, and governments can’t be expected to fill the gap given the constraints that they currently face.

Paul: It would be great to get your take on additional global trends. Let’s step out of Asia for a second. What are global trends to watch out for?

Ben: To some degree, the global trends reflect what we’re seeing here in Asia because of the importance of the region. So again, we’re looking at supply chain shifts and what that means for the rest of the world. I was only recently in Turkey, as well as Morocco, seeing the impact that the shifts in manufacturing have on local populations in those markets. Again, it’s a story of employment and income. It really is a region-wide effect, and at the same time, China to the Middle East, and that trade corridor.

I’ve been repeatedly back to the Middle East over the last few years. The New Silk Road resurrection. Some of the changes seen in the United Arab Emirates (UAE) and Saudi Arabia at the moment are particularly exciting. The speed at which governments are investing in their non-oil sectors and more advanced sectors, including artificial intelligence, to future-proof their own economies. So far, insurance has been perhaps less on the radar than it could have been, as the focus is more on industrial strategy, but inevitably, that will become a hot topic, not just for the Gulf but also for the broader region.

Paul: Anything to share about the US and what’s happening there?

Ben: The US is certainly in a state of change. We are witnessing an attempt to reindustrialize the country. The concern for those of us out here in Asia is that we have benefited enormously and continue to rely on globalization and the free movement of capital and goods. And so the question is how we can stay integrated with the US economy, because we clearly want to, and it’s a longtime ally for many of us. And we’re still puzzled over that question to a degree. But equally, I would emphasize that the US is important to the region and to the world.

Paul: Another point, in the chase for growth and for resilience, is an increasing amount of M&A in the insurance industry, especially if I think about the property and casualty industry. There are periods where prices are increasing and decreasing based on what we’re seeing happening around the world. Right now, organic growth is harder to achieve. And therefore, inorganic growth becomes a lever, especially for the property and casualty (P&C) players. And we’re seeing this as insurers chase growth and strive to increase resilience — both globally as well as in this region.

Ben: There’s a growing recognition that the conglomerate model may not work as well as it did in the past, largely because the region is increasingly fragmented. In the face of geopolitics, supply chain shifts, and nationalist growth policies, conglomerates don’t quite have the same edge they used to. There’s a need to spin off and extract value. I see M&A as an opportunity going forward.

Paul: Linked to this are partnerships in the insurance industry. Partnerships are critical between insurers and other players across the value chain. In Asia Pacific, bancassurance, for example, is a very important way for insurers to reach customers. And this is about how you bring together the strengths of the bank and the strengths of the insurer, in a value proposition for customers. I think more broadly, there is value in building these ecosystems, but a lot of challenges come with it. Incentives need to be aligned, which is difficult to achieve. They need to be aligned for the long term. Again, curious what you’re seeing across industries on that front.

Ben: So, across industries, partnerships have become more and more important. Going back to our early conversation around scale, scale is very difficult to achieve organically. Partnerships are often the only way to go and achieve this, especially in a world of technological disruption. Partnerships bring unique, competitive advantages.

Partnerships are perhaps more important in our part of the world, here in Asia, than they might be in other parts of the world, where markets tend to be more stable, more unified, and more predictable. So, across industries, we see partnerships being prioritized by the large corporations. As we move into a more unpredictable world of heightened geopolitical tensions, partnerships are another way to derisk some of those tensions and to ensure that companies continue to sell and access as many markets as possible while also protecting themselves from potential disruption further down the line. I would suggest there may be similarities in the insurance sector.

Paul: Companies and insurers, in particular, need to spend more time building their equity narrative addressed at shareholders, but frankly, a broader group of stakeholders as well — from internally driving alignments within the organization on “what are we doing” and “why we’re doing this,” to engaging with a broad group of shareholders that can include the everyday investor. At Oliver Wyman, our research found that if you take CFOs, a high percentage will say a good equity story is important, but only approximately 50% will tell you that they actually have a good hold on the equity story. How have you seen this evolving, especially in this part of the world?

Ben: Chatting with an Asia Pacific CEO just the other day, the CEO made that point, and said, in order to thrive, they are increasingly having to build out their relationships with the local governments — that can include their core businesses right through to their recycling businesses. So, it is more important than ever. At the same time, in a world where governments are increasingly populist or taking more nationalist approaches, some of our roundtables have hinted at the fact that the equity story is perhaps more difficult than in the past. This may be due to selling or working with stakeholders in different markets, often competing markets, and trying to keep everyone happy.

Paul: I kept AI for the last bit of our conversation. The stance we’ve shared prior is that you should not start with AI for the sake of AI, but start with the bigger transformation objective, and work back from this and use AI as one tool, one that is rapidly evolving, but one of many that is available to leverage for that transformation.

If I look at the insurance industry, it’s fascinating that out of all the regions, insurers in Asia are the ones who have most rapidly adopted AI solutions and implemented them. Having said that, we still need to make the shift away from many POCs (proof of concept) and move towards a transformation-led use of AI. What’s your broader perspective on AI?

Ben: I think the sector could draw lessons from the manufacturing industry and the challenges around automation. There’s a sense that you just buy a few robots, stick them on your production line, and productivity rises. But it never works out that way, because what you find is that all of a sudden, the robots are working twice as fast as the rest of your factory line, and you end up with this huge stock of unfinished goods. The question is, how do you apply technology to a specific part of the line where it improves overall productivity and doesn’t create bottlenecks?

The question around artificial intelligence is not rethinking your entire business, but how can you apply it systematically so that it improves overall productivity, without being wholly disruptive to your business? Those small proof-of-concept projects become very important at this point. Proof of concept is not just in a single market, but in multiple markets around the region, and then learning through trial and error.

Paul: So, I really like how we really observed an entire collision of megatrends — starting from now in Asia and going into 2030 onwards. The major shifts we’re seeing in the insurance industry and looking at these more global trends. What are some final words of wisdom you have for our audience?

Ben: Get prepared for more disruption. I think horizon scanning is more important than ever, with a focus on short-term objectives. Keeping an eye out for long-term shifts in the market will be more important than ever. And that’s going to require building new skill sets, developing new muscles. It’s not straightforward.

Paul: Thank you so much, Ben. It was great having you join us here today in Hong Kong.

Ben: It was a pleasure. Thank you.

Paul: Terrific. Thank you, everyone. That was Ben, who is the Asia Pacific lead for the Oliver Wyman Forum. I’m Paul. Thanks for listening, and I’ll see you next time.

This transcript has been edited for clarity.