Emerging markets will drive insurance growth
While there is continued strength in established markets such as Japan and Australia, the emerging markets of Asia will be the key drivers of insurance sector growth in the medium term, Dr Tobias Farny, Munich Re’s chief executive Asia-Pacific, responsible for reinsurance non-life in Greater China, Korea and South East Asia, told EAIC Today.
“Munich Re economists expect double-digit premium growth in life with P&C only slightly behind. By 2025, 19 percent of worldwide P&C premium is estimated to come from emerging markets in Asia compared to 11 percent in 2015,” Farny said. “China is expected to become the world’s second largest insurance market behind the US by 2017."
In order to keep pace with the dynamic expansion in Asia-Pacific, Munich Re is currently making changes to its strategic setup in the region. The objective is to focus more closely on local markets while creating a more flexible structure. Munich Re’s offices in Tokyo, Singapore and Beijing will be expanded as part of this reorganisation.
Asked about the main challenges presented by this market, Farny highlighted digital transformation.
“It undoubtedly presents the biggest potential for disruption in the re/insurance industry. It is changing the risk landscape and the insurance business itself—from the way customers buy insurance to the insurance products; from risk assessment and claims handling to loss prevention and efficiency of internal processes.
“New risks are becoming more important, such as cyber and pandemics. The challenge is to invest into the management of these risks while they still produce only a small premium. But it is these areas that will bring growth in the mid-term.”
Munich Re is at the forefront of innovation to deal with the disruption to the insurance sector, said Farny. The company is building a culture of innovation and collaborating with relevant partners in Asia and globally to understand and assess new technologies and develop new products and services with and for its clients to meet the changing needs of customers.
“We have established so-called innovation scouts in the hotspots of technological development, and opened an innovation lab in Beijing and in Munich. We are investing in companies which are pioneering technologically. In all these activities we are developing together with our clients in joint teams.
“Munich Re is dedicated to placing our clients at the centre of everything we do and at EAIC we will show how we are making the shift to the digital era to meet clients’ changing requirements and expectations; how we are extending the boundaries of insurance to cover new risks and how we are collaborating and partnering with clients to co-create innovative new products and services,” he concluded.
