22 Jan 2021
Posted in Insurance
Liability insurance industry in Asia-Pacific to reach US$33.4bn in 2023, says GlobalData
The liability insurance industry in the Asia-Pacific region is projected to grow from US$28.8bn in 2019 to US$33.4bn in 2023, in terms of written premiums, according to GlobalData, a leading data and analytics company.
GlobalData’s insight report, ‘Global Liability Insurance Market to 2023 – Overview, Key Trends, Regulatory Developments and COVID-19 Impact Analysis’, reveals that the liability insurance industry in Asia-Pacific is expected to grow at a compound annual growth rate (CAGR) of 3.8% over 2019–2023, supported by the demand for insurance covering the commercial sector such as workers’ compensation, professional/management liability (directors’ and officers’ – D&O) insurance and cyber-breaches.
Manisha Varma, Insurance Analyst at GlobalData, comments: “The demand for D&O policies is driven by increasing risks from environmental, product recall and libelous claims. Increasing number of cybercrimes has driven the demand for cyber-insurance.”
In China, the demand for D&O insurance grew due to the rise in legal risk exposure following COVID-19. The enactment of new law of collective litigation in China supported D&O insurance as it created a mechanism for bringing collective proceedings against C-level executives for securities disputes. In Hong Kong, the demand for D&O insurance remained strong due to increasing political risk and violence.
Increase in claims and contentious lawsuits due to business closures, insolvencies and disruption in continuity of operations in 2020 led to an increase in premium prices for liability insurance. In Australia, along with the pandemic, the ensuing financial sector crisis resulted in few accounts experiencing more than 100% price increase in D&O renewals in 2020.
Ms Varma continues: “The regions’ vulnerability to cybercrimes has increased due to digitalization. Remote work culture and a shift to digital platforms due to COVID-19 has exposed businesses and individuals to greater cyber-risks, driving the demand for cyber-insurance.”
Consequently, regional insurers have expanded their proposition to accommodate increasing demand for cyber-insurance. For instance, Bajaj Allianz General Insurance in India collaborated with e-commerce company Flipkart in September 2020 to offer ‘Digital Suraksha Group Insurance’ providing cover against financial losses caused due to cybercrimes.
Ms Varma concludes: “Regulatory developments, increasing risks due to shift of business to digital platforms and remote working culture is expected to support the demand for liability insurance products over the next few years.”