A patient path is required in Asia
There has been, and continues to be, significant growth potential across Asia in terms of large commercial risks and in growing the consumer insurance markets, believes Matt Fairfield, the founder and chief executive of ANV Holdings, which operates three syndicates at Lloyd’s, who is attending the EAIC this week.
“On the business side, specific opportunities in addressing natural catastrophe risk at government and capital markets levels as well as educating emerging markets on the value of insuring long-term assets are extremely promising for both insurers and the risk mangers we support,” Fairfield said.
“On the consumer side, new digital infrastructures, data and telematics along with direct distribution models are expected to be major growth opportunities in Asia because of high smartphone penetration rates and wide support of business technology investments across the region.”
But, he added, it is impossible to generalise about the nature of these opportunities in the region, so diverse and varied are the markets in Asia.
“Markets such as Singapore, Australia and Japan are well developed; markets like Vietnam and Thailand are still emerging; China offers a sheer size unlike any other; and some markets have extensive natural catastrophes that are unique and complex,” he said.
“Reinsurance needs vary widely on the development stage and specific risk dynamics of each country. That there is a unique need and a unique niche with tremendous opportunity within each market is the unifying attribute for the Asian insurance market.”
Despite these opportunities, he said there are challenges. Like the other major insurance markets across the globe, the overall market in Asia remains soft. “New capital, capacity and competition continue to outweigh even the best cases of growth in demand and insurance penetration across the region,” Fairfield said.
As such, he said, the main challenge faced by both insurers and reinsurers in the region is that as capital, capacity, and competition continue, price remains a priority.
“However, there is a growing awareness and appreciation of the long-term sustainability and price benefits of sound risk management. This is a very positive development from an insurer’s perspective,” he said.
He expects the main topics of conversation at EAIC will be around how to leverage the potential of the region given the slow lead time sometimes required to gain traction in some markets.
“As in years past, the discussions within the Asian market will focus on how to best move from the tremendous potential of the region to the specific delivery and execution of new opportunities from capital, capacity and underwriting perspectives day to day,” he said. “The opportunities remain, but it has been a patient path to achieve them.
“A particular focus for ANV in Asia is delivering more relevant insurance solutions for consumers at a more appropriate time and place. These include lifestyle protections and product warrantees offered through partner and affinity channels.”