Achieving growth in Asia-Pacific and beyond
As re/insurers seek opportunities for growth, a new report by Aon Benfield identifies two possibilities that are pertinent to Asia-Pacific and the wider markets: agriculture and the protection gap.
As profit margins and prospects for growth shrink in many traditional lines for re/insurers, it is natural they should seek new opportunities. In its annual Global Insurance Market Opportunities report, this year titled Riding the Innovation Wave, Aon Benfield identifies numerous examples of where growth could be found, including two that are especially pertinent to the Asia market: agriculture and around closing the protection gap.
The report outlines the sheer scale of the agriculture industry globally and its potential growth. According to the Food and Agriculture Organization of the United Nations (FAO), the world’s population is expected to grow to 9.1 billion people by the year 2050, meaning further rapid growth for a sector already worth around $5 trillion globally and accounting for 10 percent of global consumer spending and 40 percent of employment.
“Within this expanding industry, the opportunities for insurance carriers and reinsurance capacity continue to grow across the supply chain from farm to table,” the report points out.
It notes that in well-established crop insurance markets such as the US, Canada, and Europe insurers have provided standard revenue and yield-based indemnity coverage to farmers for some time in addition to long-standing named-peril coverage (ie, crop hail). In developed markets, penetration rates for agricultural insurance (measured as the percentage of farmland under insurance) hover around 85 percent on average.
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