Move to specialty lines fuels competitive pricing

Given the oversupply of capacity in the core property and casualty lines, more reinsurers in Asia are targeting specialty lines. But these lines are not growing quickly enough to match the incoming capacity, creating pricing pressure in these lines, said Mark Morley, managing director, Willis Re, South East Asia.

“We see the greatest opportunities in the structured reinsurance sector which is being driven by client appetite and strategic goals and supported by product innovation and a tailored approach to each opportunity,” he said. “These contracts are by definition largely independent of class of business.”

All territories in the region offer growth opportunities but, strictly in terms of absolute percentage growth, Morley thinks that even in this changing regulatory environment the larger ASEAN territories (Indonesia, the Philippines and Vietnam) offer the greatest growth opportunities.

Addressing the challenges in the market, he noted that challenges and opportunities are two sides of the same coin: regulatory developments in the region are both a challenge and an opportunity and so likewise are the challenges presented to the market in terms of more efficient distribution models and market access.

“In a market where margins are likely to remain under pressure the entire industry has to embrace the efficiencies offered through sales and distribution technology,” he said.

Willis Re focuses on understanding and aligning itself with its clients’ strategic objectives in the Asian market.

“We operate a client-centric model which is entirely product and line of business agnostic in the pursuit of the right solutions for our clients, and I believe the market recognises the differentiation in our approach,” said Morley.

“We have invested in and built significant capability around the opportunities in the life and health space which until recently had been the domain of the direct reinsurers. We are naturally very excited about the opportunity presented by our merger with Towers Watson which allows us to deliver a broader range of services to our clients aligned with industry-leading software.”