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Sustained growth for Asia insurance market in 2012
Insurance in the Asia-Pacific region is expected to remain on its current growth track, with emerging markets continuing to outpace developed markets, says Swiss Re’s Chief Economist for Asia.
The current global economic and political environment presents the insurance industry with three challenges, according to Swiss Re’s Chief Economist for Asia, Clarence Wong: low government yields, the euro debt crisis, and slowing growth with elevated inflation in emerging markets.
“Emerging Asia is not decoupled from the developed economies and its growth is expected to slow while inflation is elevated. But policymakers have leeway to leverage monetary and fiscal policies to counter economic slowdown. Emerging Asia is forecasted to continue to outperform developed markets,” Wong says.
Moderate life insurance growth
In developed Asia, most markets experienced stable growth in life insurance premiums in 2011, fuelled by strong demand for investment-linked products in the first half of the year, among other instruments.
In emerging Asia, the real growth rate of life insurance was weak in China and India due to increasing regulations on product distribution and design, but a rebound is expected next year.
Slow growth for non-life expected
Most developed markets in the region experienced stable non-life insurance premium growth in 2011. Major natural catastrophes in Australia and Japan were the catalysts for an increase in risk awareness, which also led to a gain in business.
Non-life insurance premium growth remained strong in emerging Asia, with new car owners and an increase in demand for health and personal accident insurance being key growth drivers. However, in 2012, moderately slower economic growth may have an impact on this trend across the region except for Australia and Japan.
Reinsurance growth to continue
According to Wong, the growth trend in reinsurance will continue, spurred on by insurers seeking relief from the current regulatory climate.
“Sustained growth in the primary insurance markets will continue to support reinsurance growth in the region. As insurers are increasingly pressured by new business growth and tightening solvency regulations, many will look for reinsurance solutions to relieve capital strain,” says Wong.
For more on the 2012 Asia outlook, please see our news release.
Published 26 December 2011
sigma 3 / 2014
This annual edition of sigma reviews growth developments in life and non-life insurance in 2013.
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