09 Nov 2020
Posted in Insurance
Property insurance in Asia-Pacific to reach US$85.6bn in 2023, says GlobalData
The total property insurance written premium in the Asia-Pacific region is projected to grow from US$71.5bn in 2019 to US$85.6bn in 2023, according to GlobalData, a leading data, and analytics company.
GlobalData’s insight report, ‘Global Property Insurance Market’, reveals that property insurance in Asia-Pacific is projected to grow at a compound annual growth rate (CAGR) of 4.6% during 2019–2023, supported by growing demand for insurance covering natural hazards, construction and industrial developments.
Manisha Varma, Insurance Analyst at GlobalData, comments: “Despite the initial slowdown in 2020 due to COVID-19 pandemic, many economies are now exhibiting signs of recovery following the lifting of lockdown restrictions. China, which accounted for over 25% of Asia-Pacific’s property insurance market in 2019, is expected to register 5.1% growth in 2020, due to resumption in construction and manufacturing activities. Similarly, Vietnam is expected to record fastest growth in the region at 6% due to recovery in manufacturing and exports.”
Investment in infrastructure and regulatory support will provide further impetus to the property insurance industry in the region. China’s insurance regulator announced a three-year action plan in August 2020 to transform its property insurance sector by 2022. In July 2020, insurance regulatory authority of Macau launched catastrophe property insurance plans for SMEs.
Ms Varma continues: “Insurtech related advancements is another area that is gaining prominence. The use of ‘Aerial imagery’ to evaluate property damage through real-time images via drones or satellites is shortening claims assessment process. Similarly, through ‘Home telematics’, insurers collect property data via devices such as safety monitors and motion sensors (installed in home). This helps in assessing risks and calculate premiums based on actual condition of the property.”
The adoption of parametric insurance as a viable solution to check damages for large-scale natural disasters is another area that is expected to gain traction. These products allow insurers to pay-out a pre-agreed claim upon the occurrence of a triggering event. For instance, Swiss Re introduced ‘Insur8’ in Hong Kong, which provides pre-agreed amount based on warning signal from the Hong Kong Observatory typhoon.
Ms Varma concludes: “Property insurance industry is expected to evolve driven by technological developments, which allow insurers to provide customized and event-specific insurance. Furthermore, positive regulatory developments across several markets will be conducive to the development of the property insurance industry in the region.”