Asia Pacific's insurance industry shows robust growth potential, particularly in accident and health, cyber insurance, and electric vehicle (EV) coverage, despite challenges, says global reinsurance broker, Gallagher Re.
In its “2024 Asia Pacific Market Watch” report, released last week, Gallagher Re says that economic trends, regulatory changes, and technological advancements are reshaping market dynamics and testing insurers' resilience.
The broader economic recovery is also driving demand for innovative risk solutions, positioning APAC to continue driving growth in the global insurance industry.
Other growth drivers in the region include:
Technological and Regulatory Advances: Digital and technological advancements are fuelling growth in several areas. Increased demand for cyber coverage is evident; the cyber market in APAC has been expanding at an impressive rate of almost 50% a year. Motor insurance remains dominant in the APAC non-life segment, with rising EV sales and new regulations emerging. Enhanced data, capital, and risk management strategies are essential for insurers to navigate the evolving regulatory landscape.
Natural Catastrophe and Climate: The region is highly susceptible to natural catastrophes, and rapidly growing urban areas are driving higher losses in high-risk locations, therefore regulatory measures for sustainability are coming into place across the region.
The report is based on the insights of Gallagher Re client advocates and practitioners covering 14 mature and emerging markets across APAC, as well as curated publicly available data sources. Each market faces unique jurisdiction-specific challenges and regional macroeconomic factors.
Gallagher Re divides the region into Mature Asia and Emerging Asia. The former consists of Australia, Hong Kong, Japan, New Zealand, Singapore, South Korea, and Taiwan. The latter comprises China, India, Indonesia, Malaysia, Thailand, the Philippines, and Vietnam.
Non-life
Some mature markets, such as Australia, New Zealand, and Taiwan, showed double-digit growth in 2023 for non-life segments. The growth was partially driven by rate hardening to combat high inflation and the rising impact of natural catastrophes, says the report.
Economic growth and increasing awareness of insurance protection are driving demand in Emerging Asia. For example, engineering and credit insurance in Indonesia, and casualty lines in the Philippines, are experiencing high growth as these markets diversify beyond property and motor insurance.