There’s a fertile market for international and local insurance companies in Asia, but the first hurdle is the integration of this regional insurance market, says Mike Morrissey.
Participating in the inaugural ASEAN Insurance Summit in October, I was struck by both the enormous opportunities and the formidable challenges awaiting the formalisation of the ASEAN Economic Community in late 2015. This market of 10 Southeast Asian nations boasts more than 625 million people, and a combined gross domestic product of approximately $2.5 trillion, growing at more than 5 percent per annum. It is a potentially formidable global economic powerhouse indeed.
These statistics make the opportunities easy to visualise: a huge market with a decidedly young demographic profile, and rapidly rising incomes; a fertile market for international and local insurance companies to offer both life and nonlife coverages. The first challenge that must be met, however, is the integration of this regional insurance market.
This group of countries is far from homogeneous. The largest member, Indonesia, ranks fourth in the world with over 240 million people, while oil-rich Brunei has just 400,000. The range of financial sophistication spans world class Singapore to relatively primitive Lao. This is clearly not going to be an easy integration compared to, say, the EU or the North American Free Trade Agreement, or the even more difficult Gulf Cooperation Council or Association of Latin American Insurance Supervisors unions.
ASEAN, insurance market, International Insurance Society, Mike Morrissey, Asia Pacific