Innovation key to success in Asian markets

The coming year will see more insurers in Asia consolidating their positions and looking for more innovative ways to offer their products, Li Shan Yeo, CEO of Antares Asia, told EAIC Today.

“Barring any unforeseen changes, rates are expected to be flat in the coming year,” she said. “We are seeing increased level of mergers and acquisitions in the industry this year and expect this level of activity to continue. With softening of rates and reduction in top line, many companies are reviewing their operating models to improve efficiencies and manage their costs.”

Cyber insurance is clearly one of the hottest topics in the Asian industry, following several incidents of cyber attacks on banks in Asia this year, Yeo added.

“Companies now have a greater awareness of cybersecurity incidents in this region and are becoming increasingly concerned about cyber risks and the resulting reputational damage.”

She said the region is still showing potential for growth, given the relatively low insurance penetration rate against a large population and healthy economic growth. Sectors such as accident and health will be the key drivers for most countries in the region.

“Increased severity in cat losses will also drive consumer buying behaviour for home insurance. Cat capacity will come at a cost for most corporations.”

China and India will lead the growth rates in this region; both markets have the population and geographical size plus a rising awareness of insurance. “The regulators in both countries are focusing on promoting the risk culture in their countries and building the insurance framework to facilitate market growth,” Yeo said.

The prolonged depression of the price of oil will have a pronounced impact on the global economy in the coming year.

“Brexit and the result of the US presidential election will also affect this market as these are key trading partners.”