There was an overall increase in embedded value (EV) and value of new business (VNB) across the region in 2023, reflecting the bounce-back of many economies, said Mr Heerak Basu, principal and consulting actuary at Milliman, a premier global consulting and actuarial firm.
“With the easing of Covid restrictions and the return of mainland Chinese visitors, Hong Kong’s VNB more than doubled, while India, Japan, and Taiwan showed double-digit EV growth in 2023,” he added.
Milliman has released its annual “2023 embedded value results: Asia” report with data from major multinational and domestic life insurers across Asia Pacific. The report also analyses and discusses the EV methodologies and assumptions used, and the impact of changes to key regulations in the region.
A few key insights include:
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The majority of insurers in Asia reported EV growth in 2023, with increases ranging from 1% to 24.1%.
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In line with global trends, bond yields decreased during 2023 in most of the Asian markets, which led Chinese insurers to decrease their investment return and discount rate assumptions for 2023, with mixed responses in other markets.
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VNB experienced an overall growth of 9.9% in the Asia region, with double digit growth in Indonesia and Thailand and 102.8% growth in Hong Kong.
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The implementation of IFRS 17 from 1 January 2023 in certain markets has impacted EV reporting. Some European MNCs have shifted towards IFRS 17 and no longer report EV results for their Asian subsidiaries.
A complimentary copy of the report is available for download here: 2023 embedded value results: Asia (milliman.com)