On the opening day of the 19th Singapore International Reinsurance Conference, Gallagher Re has highlighted the continuing protection gap in in Asia.
According to the broker, the primary challenge for the region remains a lack of insurance coverage, whilst several developing markets have seen tremendous growth post-pandemic.
The inaugural version of the report, Asia Pacific Market Watch, explores the headwinds and tailwinds currently shaping markets in the region.
The report aims to aid the understanding of the various jurisdiction-specific features of the Asia Pacific (APAC) region, with a view to highlighting its potential: APAC, which currently accounts for 25% of the global insurance sector, might yet live up to its reputation as the insurance industry’s growth engine, according to the report.
According to the report: “APAC’s physical and economic variety makes it challenging to take a generic view across the region. The primary challenge remains a lack of insurance coverage, with penetration rates in certain regions still less than half that of the US/Europe. A variety of socioeconomic issues contribute to this, and while the industry has become increasingly engaged in supporting both governmental and private sector programs across the area to close this protection gap, much work has to be done.”
The report also considers how a tougher economic backdrop and a tightening of reinsurance capacity are prompting APAC insurers to look at optimising their balance sheets and consider new operating models, as well as examining the prolonged challenges associated with inflation and the El Niño — specifically whether its impact is being disproportionately attributed to climate change.
Mark Morley, (pic) managing director of APAC at Gallagher Re, said: “The primary challenge in this richly diverse region remains a lack of insurance coverage, with penetration rates in certain regions still less than half that of the US/Europe. However, despite the adverse economic situation, the fast-moving emerging markets that slowed during the pandemic now appear to be rebounding.”
“This is a region with huge potential. We hope that this report will prove helpful to those who are interested in APAC’s specific markets, as well as some of the broader themes experienced collectively across the non-life insurance market in the region,” he added.