11 October 2016 Insurance

A two-speed market is developing in Asia

The Asian market is set to develop a ‘two-speed’ dynamic with professional-led markets that offer value through underwriting and claims services representing one side and those that simply provide capacity and little else on the other, according to Matt Cannock, managing director of Markel International.

As the soft market continues, he expects this trend to become more pronounced as companies increasingly look to differentiate themselves.

“The market will continue to be very competitive but the inevitable cracks will start to appear,” Cannock said. “Many companies are writing business at unsustainable premiums and soon these will start to affect how aggressive they are in winning business and how attractive they are to customers.”

The greatest opportunities lie where the demand is growing the fastest but given the global economic slowdown, Cannock said these areas can be hard to find.

“Trade credit has potential given the greater awareness of the product in the current market and it is ripe for product development driven by the increasing capital requirements for most financial entities,” he said.

In terms of opportunities in specific countries, he notes that China has the macroeconomics and a huge population and is still showing GDP growth, but competition is fierce and new insurers seem to be opening up every month.

“Vietnam is the current GDP success story but doesn’t have true scale as yet,” he said.

In terms of Markel’s performance in the region, Cannock believes the key has been the company’s emphasis on recruiting good people.

“Our greatest achievement is being able to attract the top talent in the region. Insurance is a people-driven business and if you cannot employ the best you are at a considerable disadvantage,” he said.

“From a business perspective we are increasingly retaining business at preferential terms because of the service we offer. This is something that we are all immensely proud of.”

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