The property insurance industry in the Asia-Pacific (APAC) region is projected to grow at a compound annual growth rate (CAGR) of 10.8% from an estimated $93.1bn in 2023 to $152.2bn in 2028, in terms of written premiums, according to data and analytics company GlobalData.
According to GlobalData’s latest report, “Property Insurance Market Trends and Analysis by Region, Line Of Business, Competitive Landscape and Forecast to 2028”, the growth in the APAC property insurance industry is expected to outpace the global average, which is projected to record a CAGR of 8.1% over 2024–28.
Property insurance in APAC is concentrated among the top three markets – China, Japan, and Australia – which are estimated to account for a collective share of 75.2% of the region’s written premiums in 2024. China is expected to lead the property insurance market in APAC, accounting for 36% of the written premiums in 2024, followed by Japan with 23.5% and Australia with a 15.7% share of written premiums.
2024
Ms Aarti Sharma, insurance analyst at GlobalData, said, “The APAC property insurance market is poised for significant growth of 8.3% in 2024, driven by disciplined underwriting practices and a rise in premiums for fire and home multi-risk property insurance classes. Favourable regulatory changes and the adoption of advanced technologies such as artificial intelligence (AI) and machine learning (ML) in risk assessment and streamlining the claims process will further fuel the growth of the industry.”
In 2024, the fire and home multi-risk property insurance segments are expected to dominate the property insurance market in APAC due to a surge in natural catastrophic (nat-cat) events.
As per the Insurance Council of Australia, a severe storm in New South Wales and Queensland in April 2024 registered 19,938 claims with an economic loss of A$280.3m ($182.4m), and the Valentine's Day storm in Victoria in February 2024 registered more than 27,000 claims with an economic loss of A$214.8m.
Furthermore, worsening losses from natural hazards led the General Insurance Rating Organization of Japan to raise reference rates (benchmark rate) for fire insurance by an average of 5.5% in 2018 to 13% in 2023.
Ms Sharma added, “The increasing demand for fire and home multi-risk policies can be attributed to the growing awareness of the financial risks of natural disasters and the need for comprehensive coverage. Insurers' capacity is expected to be limited for loss-making risks and nat-cat exposures due to high reinsurance costs and poor loss ratio performance.”
APAC property insurance growth will also be supported by the adoption of Generative AI and ML in sales, risk modelling, and customer engagement. Risk assessment through advanced analytics provides crucial data insights that identify high-risk areas and aid in risk management and mitigation.
Favourable regulatory changes too are shaping the property insurance landscape in APAC. For example, in April 2024, China’s National Financial Regulatory Administration issued guidance to promote the high-quality development of green insurance, reinforcing the role of insurance in supporting environmental protection and eco-friendly consumption.