Australia, along with Singapore and Hong Kong, is a favourite regional product testing ground for fintechs, according to KPMG.

“While China may be the dominant jurisdiction for fintech investment in Asia, fintech ecosystems are sprouting and growing across the region,” its Pulse of Fintech report for the second quarter says.

“Singapore, Hong Kong and Australia are setting themselves apart as fintech hubs.”

Australia has moved to foster the development of fintechs, which refers to financial services market entrants offering innovative solutions.

Steps include forming a Fintech Advisory Group to brief the Federal Treasurer on ways to spur industry development, and a bilateral deal with Singapore to help innovative financial technology companies expand in the two countries.

“Being a testing ground for prototypes or activities to be rolled out means our local insurance industry will also innovate much faster than if these technologies were piloted elsewhere and brought over,” KPMG Australia Head of Insurance Martin Blake said.

He says the decision by US-based Trov – in which Suncorp has invested $US5 million ($6.5 million) – to roll out its insurance app in Australia speaks volumes about the local market.

“One of the advantages Australia has… is that it’s an attractive environment for insurtech companies to test customer-focused activities,” Mr Blake told insuranceNEWS.com.au.

The high level of mobile device ownership “presents an opportunity for Australia to get more involved in insurtech and get more insurtech companies to pilot in Australia”.

The KPMG report defines insurtech as companies creating new underwriting, claims, distribution and brokerage platforms, enhanced customer experience offerings and software as a service to help insurers deal with legacy IT issues.

“Insurtech is young and will evolve over the coming months and years,” Mr Blake said.

“In the near term, investments will most likely focus on finding meaningful ways to engage customers across online and mobile platforms.”