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 OPERATING ENVIRONMENT CHANGES The 2020 dip in GWP resulted in higher  insurance penetration as the GDP declined  faster than the GWP. We forecast mild  insurance penetration development in all  countries except for Vietnam. Vietnam’s  insurance penetration is expected to grow by  30% by 2025 driven by current low baseline,  strong economic recovery, legalization of  online insurance, urbanization, growing middle  class population, and easier access to insurance  especially through the bancassurance channel.8 GWP growth trend and forecast Annual GWP Growth Value-add B USD  (22-25) Country 2016-2019 2019-2020 2020-2021 Forecast 22-25 Indonesia 4.5% -9.7% -1.1% 9% – 12% 8.7 – 10.4 Malaysia 5.8% 1.2% 6.6% 8% – 9% 7.2 – 8.0 Philippines 4.2% 4.0% 36.7% 6% – 10% 1.9 – 3.4 Thailand 7.8% -1.9% 2.1% ~6% 7.2 – 8.0 Vietnam 20.9% 17.0% 18.0% 18% – 20% 9.1 – 10.1 Total 7.1% -1.1% 6.8% 9% – 11% 34 – 40 Insurance penetration  (GWP / GDP) Country 2019 2021 2025 FC Thailand 5.08% 5.39% 5.4% Malaysia 4.53% 4.52% 4.6% Vietnam 2.10% 2.60% 3.3% Philippines 1.54% 2.10% 2.1% Indonesia 1.73% 1.46% 1.7% Insurance penetration forecast Thriving in the Post-Covid  Insurance Growth © 2023 Infosys Consulting 7 GWP forecast model Macroeconomic drivers • GDP (USD) • Population • GDP / capita (USD) • Inflation • Unemployment Insurance market • Gross Written  Premium • Insurance  Penetration Driver-Based Model Forecast • 2 macro-economic  driver models:  insurance penetration  and insurance density • Models based on  2015-2021, excluding  2020 (COVID year) • P-value for both  models <0.005 • GWP model is a  weighted average of  both models for best  fit against actuals • GWP forecast based  on the driver-based  model applied on  IMF’s macro- economic forecast  (October 2022) • Insurance penetration  and density  calculated based on  forecast GWP against  IMF’s relevant macro  drivers, GDP and  population 

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 OPERATING ENVIRONMENT CHANGES Our model suggests that the insurance density  continues to develop largely at pre-COVID  rates. Vietnam is the only country in our model  that is expected to see significant take-off from  its peers, Indonesia, and the Philippines.  The population who are insured will depend on  insurance types and countries. For example, in  Thailand, 75% of the population are covered by  health insurance and the rest are covered by  national healthcare systems. In the Philippines  and Vietnam, circa 90% of the population are  covered by national health insurance. In  Malaysia and Indonesia on the other hand, over  50% and 35% of the population do not have  health coverage, respectively.9, 10, 11, 12, 13 In summary, while COVID induced a bump in  the road, we forecast that the future growth is  40% faster compared to pre-COVID. The  growth is driven by increased digital adoption  promoting easier access, urbanization and the  growth of middle class generating more  demand, increased interest towards health and  life insurance due to the pandemic.<|endoftext|>66 73 71 442 440 482 509 514 546 53 54 56 320 352 384 397 389 396 42 51 71 83 64 98 732 88 496 97 184 0 100 200 300 400 500 600 700 800 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Insurance density in SEA emerging markets (GWP / person) USD Vietnam Malaysia Philippines Thailand Indonesia KEY ACTIONS FOR INSURERS ✓ Reap the growth now, as the pandemic is  still fresh in memory.<|endoftext|>✓ Seize the opportunity in growth markets  especially in growing urban middle class.<|endoftext|>✓ Focus on reach and easy-to-understand  offerings in underinsured markets.<|endoftext|>Thriving in the Post-Covid  Insurance Growth © 2023 Infosys Consulting 8 

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 Three years of digitalization in three months CHANGED CONSUMER PREFERENCES Overall, COVID increased the attention to  insurance, especially health and life products.  The persistence of COVID, with its several  waves and increasing number of variants, has  kept health topics, including insurance, in the  public discourse. Not all news has been positive  though, e.g., regarding the insurers’ inability to  pay the claims, or rehabilitation of insurers  facing bankruptcy. Despite the controversies,  we see that the demand for insurance has  grown in the region.<|endoftext|>Firstly, COVID deeply changed the way how  people behave and what they expect. In  general, it forced everyone to adopt digital  channels one way or another. Secondly, the  impacts of COVID were very personal in nature;  we see different response between user groups  depending on how they were impacted by  COVID. In the next sub-chapters, we address  both effects and then summarize the best  practices for insurers.<|endoftext|>Thriving in the Post-Covid Insurance Growth © 2023 Infosys Consulting 9 

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 COVID doubled digital channel adoption in a  single year CHANGED CONSUMER PREFERENCES Working from home and social distancing  measures led consumers to adopt digital  technologies much faster than anticipated pre- COVID. In many aspects, the emerging APAC  markets have surpassed the developed APAC  markets in digital adoption. For example, in  2022, 43% of people in the emerging markets  managed their policies digitally, when only 23%  in the developed markets do so.  In financial  services in the emerging Asia-Pacific, digital  banking usage nearly doubled from 55% to  88% of the population from 2017 to 2021. While  many respondents to surveys say that they are  interested in buying insurance through an  online channel, only 25% of those willing to buy  the insurance online actually do so. The  blockers include limited online channel, and  difficulties to use the channel.14, 15, 16 Digital insurance adoption may have been  inhibited by the regulatory restrictions, e.g., in  Thailand and Vietnam online insurance sales  has been limited by the regulator. Philippines  on the other hand has seen doubling of the  online channel preference as the principal  interaction channel from under 30% to more  than 60% from pre- to post-COVID.17 In emerging South-East Asia, the digital  channel effectively means the mobile channel.  Due to limitations of public infrastructure, the  smartphone is the principal tool to access the  Internet and online services in both urban and  rural areas. The digital channel is not limited to  direct channel; consumers are expecting digital  interactions embedded with the human  interaction with an agent or a broker. Nearly  half of the people in the region say that they  would want at least some human interaction  when they are purchasing new policies.   Omnichannel interactions where one part of  the customer’s journey is digital, and another  part is handled through traditional channels are  even more important during the transitioning  and resetting into the post-COVID World.18 55% 20% 16% 18% 28% 60% 1% 2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Pre-covid Post-covid Philippines insurance customers'  channel preference In person By phone Digitally Other KEY ACTIONS FOR INSURERS ✓ Double down efforts on digital channels,  especially mobile.<|endoftext|>✓ Extend digitalization through the agent and  broker channels.<|endoftext|>✓ Build omnichannel capabilities for seamless  customer journeys across the digital