Asia’s general and life insurance markets expected to grow by 2025:
Author: Katie Baker
Analysts at data and analytics firm GlobalData have revealed that Asia’s position within the global general and life insurance markets is expected to grow by 2025, providing high growth opportunity for reinsurers in the region.
Asia accounts for 16.9% of the global general insurance market and 33.4% of life insurance which analysts believe will rise to 17.8% and 34.2% within the next four years, making them and India among the fastest growing markets.
Mandatory cession regulation and expanding insurance industry has helped domestic reinsurers increase revenue in these countries. Consequently, Chinese reinsurers, China Re and China P&C, and Indian reinsurer, GIC Re, recorded double-digit growth during 2016-2019.
Singapore and Hong Kong have asserted their position as global reinsurance hubs driven by its well-established regulatory framework and presence of robust financial infrastructure. Leading global reinsurers including Swiss Re, Munich Re, Scor and Hannover Re have operations in these countries
Climate volatilities, which have exacerbated risks from natural hazards, is another focus area for reinsurers. In 2020, losses due to natural catastrophe in the region was $67bn; of which only 4.5% was insured, indicating huge gap and growth opportunity for both insurance and reinsurance companies.
To provide optimal reinsurance coverage at affordable price, reinsurers are adopting catastrophe modelling technologies such as satellite images and real-time hazard maps. These technologies help in accurate risk assessment based on historical and near real-term weather data, thereby helping both insurers and reinsurers develop suitable cover
Manisha Varma, Insurance Analyst at GlobalData, comments: “Growing insurance markets, mandatory cession requirement in most countries and exposure to natural hazards such as earthquake, flood, wildfires and cyclones, supported the growth of reinsurance in the region.
“Post pandemic economic recovery supported by resumption of infrastructure developments and growing insurance industry will support demand for reinsurance in the region over the next five years.”
