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How Chubb is meeting the challenge of insurance in megacities

As megacities emerge across the globe, those in Asia remain among the fastest growing and cheapest places to build. ASEAN as a grouping is home to 662 million people¹, the third largest population in the world. Some of the world’s largest megacities, like Jakarta and Bangkok, are at its core. These cities will continue to grow in size and affluence due to ever-increasing urban populations. In fact, it is predicted that 60 of the world’s megacities will be found in Asia by 2025². According to the World Bank, seven out of 10 people in the world could be living in cities³ by 2050.

Megacities in ASEAN are characterised by their ability to grow very fast, pushed by a voracious appetite for homes, transport and workspace. The growth of ASEAN’s megacities parallels the growth of its general populations, creating a concentration of economic activities and increased connectivity, leading to more development and therefore more people. However, their speed of construction is also a signal for concern. With the chief exception of Singapore, over-hasty building can be attributed to reduced costs including lower wages, accessibility to construction materials and availability of land at lower prices. This leads to over-crowding and the perils that it brings.

Perils and their risks

The perils of over-hasty building include the lack of proper establishment of efficient water and sewage systems, the rise of poor and unsafe housing, often inadequate and unreliable electricity, and a host of natural disasters, including flooding. Traffic in megacities can be intense with road safety a major challenge. The rise in the middle class and their aspirations of vehicle ownership make traffic worse. 

Megacities also contribute to the rise in global greenhouse gas (GHG) emissions and atmospheric pollutants, with 25 of these cities⁴ contributing to more than half of them.  Climate proofing our megacities is crucial, but it is also imperative to work towards minimising the impact of climate change. Unless governments adjust their goals from growth and building to fostering quality living environments, the impending climate disasters cannot be averted. In addition, fixing the rising healthcare costs of those living in polluted cities is on the national agenda of many governments.



Smart cities

The picture is far from gloomy though. There is a potential bright future for megacities with their re-modelling to create smart cities enabled by digital technology.  Digital is leveraged to monitor and manage a broad range of activities and sectors, including transport networks, power supplies and healthcare. Technology is key to addressing the challenges of megacities and their transformation into smart ones.

Smart cities allow citizens and local government authorities to work together with joint initiatives and use smart technology to manage assets and resources in the growing urban environment.

What do these trends mean for Chubb as an insurer?

As the world’s largest publicly traded property & casualty insurer, we aspire to define the new possibilities in insurance. We have chosen ‘Insurance for the New Possible’ as our theme for 2022. In addition to our expertise and experience, we are optimistic that we can address the risks arising from megacities and bring greater certainty in an uncertain world. 

We know that businesses and people in megacities continuously seek enhanced protection for their goods and property at risk. While the megacities’ impact on the insurance industry is a challenge, consumers are evolving. This is because of wider access to education and the huge population of digital natives have enabled tech startups such as Grab, Tokopedia, Gojek and GCash to thrive. We are tapping into these opportunities by simplifying our insurance products so that they are easily accessible, affordable and relevant. This was where we discovered that small is beautiful. We started offering embedded insurance in ‘sachet’ or bite-size to the mass market segment.

By starting ‘small’, the mass market segment of megacities that are largely unbanked, uninsured or underinsured in emerging Asia, have the opportunity to experience insurance. This gives them the confidence to upgrade to a higher value plan. Of course, as insurers, we must earn their trust by honoring claims and providing superior after-sales service.

Why should you consider Chubb Studio?

We have invested in Chubb Studio®, a technological platform enabling businesses to sell insurance in minutes with either their own brand, co-brand or Chubb's branded offering via use of APIs. With Chubb Studio, we can truly embrace ‘insurance for the new possible’. We believe that there are countless possibilities for insurance to help protect the population of megacities and smart cities, with new business models and technology.

Let’s start a conversation to see how we can collaborate to protect megacities as they transform into smart cities.


Disclaimer - The content of the above article is not intended to constitute professional advice. Although all content is believed to be accurate, Chubb Insurance Singapore Limited (Chubb) makes no warranty or guarantee about the accuracy, completeness, or adequacy of the content of this article. Users relying on any content do so at their own risk. Published 10/2022.


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Partner with us

If you are keen to learn how Chubb can collaborate with you, get in touch with:

Serene Neo
Division Head of Consumer Lines
Chubb Singapore