Singapore signed a pact with four insurance companies to advance the digital capabilities of insurance industry. The move comes as new technologies begin roiling the sector, with incumbents ill-equipped to adapt.

The city-state's media development authority signed a memorandum of intent, or MOI, on Tuesday with four insurance companies – Great Eastern, LumenLab (MetLife’s Innovation Centre in Asia), NTUC Income and Prudential Singapore – to improve the digital capabilities of the country's insurance sector.

The emergence of new technologies is disrupting the insurance industry, but incumbents are not doing much to adapt. While 74 percent of insurance companies predict disruption of their businesses, only 14 percent actively participate in relevant programs, according to a report by PWC. 

Meanwhile, insurtech firms have raised $2.3 billion worth of investments in 2017, according to EY.

Co-Develop Solutions

Under the pact, Singapore-based technology companies can partner with established insurance companies to co-develop innovative solutions for the industry. But first, they have to be  accredited under the government's Accreditation@SG Digital program. 

«This partnership with Great Eastern, LumenLab, Income and Prudential is an exciting effort to identify problem statements in the insurance industry and co-develop innovative InsurTech solutions,» said Tan Kiat How, Chief Executive of Infocomm Media Development Authority, or IMDA, said in a statement.

Matching Up

The agreement opens up opportunities for accredited companies to burnish their credentials by building a track record with global insurance players, according to the government agency. Insurance companies, in turn, bridge the insurtech gap by tapping ideas from accredited companies to adapt their business models for a changing landscape. 

Accredited companies are already working with insurance companies –  Sense Infosys has partnered up with Great Eastern on a proof-of-concept for transaction monitoring while DataRobot is working with Income to improve and automate its pricing analysis. 

The memo-signing was witnessed by Janil Puthucheary, a senior Singapore minister responsible for transport, communication, and information.