Asia-Pacific life insurance market to reach US$1.5 trillion in 2023, forecasts GlobalData

The life insurance written premium in the Asia-Pacific region is projected to grow from US$1.2 trillion in 2019 to US$1.5 trillion in 2023, according to GlobalData, a leading data and analytics company.

GlobalData’s insight report, ‘Global Life Insurance Market to 2023’, reveals that life insurance in the Asia-Pacific region will grow at a compound annual growth rate (CAGR) of 4.9% during 2019–2023, supported by aging population and an expanding middle-class population with a growing disposable income.

Pratyusha Mekala, Insurance Analyst at GlobalData, comments: “Despite the disruption due to the COVID-19 pandemic, several countries are now seeing gradual recovery following the lifting of lockdown restrictions. In Singapore, positive economic activity from Q3 2020 aided in recovery in demand for life insurance products. Similarly in Hong Kong, total premiums of long-term in-force policies increased by 5.1% year-on-year during the first three quarters of 2020.”

To drive sales, several life insurers are offering COVID-19 specific riders which provide diagnosis and death benefits. The Life Insurance Association of Malaysia extended additional relief measures such as cash benefits and lump-sum death benefits for policyholders diagnosed with COVID-19. This, coupled with the pandemic-led awareness, is expected to increase demand for life insurance policies.

Ms Mekala continues: “Technology advancements is another area that has gained more prominence. Due to the social distancing norms and regulatory push, increasing number of insurers are shifting to digital platforms. In June 2020, Manulife Hong Kong launched a virtual face-to-face agency sales platform for most of its insurance product offerings.”

Large insurers are also collaborating with startups and insurtech companies to remain competitive and enhance customer experience. For instance, Manulife-Sinochem Life introduced biological age model (BAM)+ life insurance. The company collaborated with insurtech firm SCOR Global Life and ReMark to add BAM algorithm, which helps insurers in continuous risk assessment thereby facilitating better underwriting and competitive pricing.

Ms Mekala concludes: “Life insurance market will continue to grow, driven by greater deployment of technology and increase in demand. Low insurance penetration in emerging markets will drive demand for protection insurance while the aging demography in mature markets will create demand for post-retirement insurance products.”

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