Little documented, Asia’s insurance sector has been growing rapidly ever since the region began opening up their markets to foreign players. The recent spate of terrorist attacks in Asia has further prompted many Asian countries to adopt insurance against terrorism.
Globalization is the key source which is bringing about an ‘irreversible transformation’ in the Asian insurance market. India and China are ‘dynamically’ driving the growth of insurance markets in Asia and according to Research and markets the outlook for this industry in the region is ‘sanguine’ despite short-term uncertainties.
Advanced economies currently account for the bulk of global insurance, according to International Financial Services London. With premium income of US$1,485bn in 2007, Europe was the most important region, followed by North America (US$1,258bn) and Asia (US$801bn).
Several factors can influence the premium levels in a country. Countries such as India and China are seen as having great potential due to their size, but low average income has stifled demand. In many emerging markets, there is limited awareness of the economic importance of insurance by both individuals and businesses. Another major factor is the extent of the state’s involvement in insurance provision. Where this has been reduced, it has stimulated the growth of long-term insurance.
The research and markets report goes on to sat that in the recent times, China has moved ahead of the Indian insurance sector. India opened the market to private players in 2000 while China did that a decade earlier. Apart from India and China, which are putting Asia on a global scale, other countries like Japan and Hong Kong are also increasingly diversifying their insurance sectors. Japan is home to some of the largest Asian insurers, and has an urgent desire to expand its client portfolio across the region. The insurance sector in this region has seen Western financial services companies compete for Asian assets. However, regional companies – especially from Japan and China – are expected to become more dominant in this market over the next few years.
Last year, Hong Kong saw the greatest amount of M&A transactions in their insurance sector. Due to globalization, deregulation, and terrorist attacks, the insurance industry has gone through a tremendous transformation over the past decade.
Under the Life Insurance Sector, AIG is the biggest in Asia, in terms of country presence and premiums. ING comes second by premiums. However, globally, Prudential tops the list, being the most dependent on the region.
Among the non-life insurance cos., regional player Mitsui Sumitomo, leads the property and casualty side.
