Asia is the non-life insurance ‘growth engine’
Asia is the fastest “growth engine and driver of global economic growth” and in the non-life commercial line insurance market, the eight key Asian countries are expected to grow at 11 percent a year from 2021 to 2025, according to Gilles Fromageot (pictured), regional manager for Asia, insurance at AXA XL.
Fromageot told Intelligent Insurer that such growth “represents strong potential for AXA XL and other insurers”.
“At AXA XL, we have an ambition to grow in Asia in the insurance space—we have in place a great team and a clear, defined long-term strategy for each country and each line of business in Asia.”
Fromageot said he witnessed Asia “being very resilient during COVID-19”, adding that the region is generally coming out of the pandemic in a strong economic position.
“The pandemic has unlocked new business opportunities.” Gilles Fromageot, AXA XL
“The pandemic has unlocked new business opportunities, leading to growing insurance needs. For example, it enhanced the awareness and the importance of risk management in large corporates, highlighting the opportunities for insurers to help shape new products for Asia and work with clients to upgrade various risk management practices.”
He acknowledged that while there may be more protectionism in the region, this situation has to some extent transformed into business opportunities for insurers as clients need to rely more on local capacity for their insurance needs.
With sustainability now on most people’s agendas, there is growing pressure in the Asia region to transition quickly towards a net zero world, he said, as companies embrace the prospect of sustainability head on.
“Environmental, social, and corporate governance (ESG) factors offer an opportunity for insurers to step up, be innovative and support clients in this evolving space. At AXA XL, we offer a range of products which are being adapted and applied to new risks which are evolving from the sustainability and transition requirements of our clients,” Fromageot said.
“Companies’ overall risk tolerance could be adversely impacted.”
However, Asia is not entirely plain sailing, he said, indicating that there are “several headwinds” in the region.
“The forecast for economic growth in Asia has been lowered amid mounting challenges including increased monetary tightening by central banks, the Ukraine-Russia war and the recurrent COVID-19 lockdown in China. Rising food and energy prices are a concern.
“Coupled with rising geopolitical tensions, companies’ overall risk tolerance could be adversely impacted, and decision-making slowed down,” he said.
“Specifically in the insurance space, we are seeing more limitations on clients’ insurance purchasing budgets. Insurers are also facing pressure to keep costs under control under this challenging environment, to expand their product offerings to keep abreast of the evolving environment and comply with relevant regulatory requirements in different countries,” he concluded.
