By D KANYAKUMARI / Pic By AFIF ABD HALIM
Cooperative competition or “coopetition” in the insurance landscape can lead to synergistic gains, said Bank Negara Malaysia governor Tan Sri Muhammad Ibrahim.
Traditional models of competition “deserve a re-think”, Muhammad said when delivering his keynote address at the 24th International Association of Insurance Supervisors Annual Conference.
“Network influences will end up improving the value of insurance products and services, in addition to better managing risks.
“Rather than observing the competitive landscape through a zero-sum lens, coopetition can result in synergistic benefits,” he added.
He said for the world of insurance in Malaysia, market mechanisms exist to move reinsurance documentation more effectively between market players and also to share advice on fraud.
“The breakthrough of new technologies will take this further. Open application programming interfaces will allow insurers to provide and obtain information that will considerably transform the operational process of insurers,” Muhammad said.
He added that an access to that kind of information would require a network of service providers who are willing to share data and information without giving away competitive advantage.
“Investment in infrastructure, particularly in information and communications technology (ICT), is very costly. Simply by pooling funds to build shared infrastructure, the burden becomes more achievable.
“More investments in IT will make it easy for new avenues to widen insurance reach, boost performance and improve effectiveness.”