The growing number of online consumers in Asia-Pacific creates opportunities for insurers to develop new distribution channels.
Moving ahead in turbulent times
Asia-Pacific comprises many countries at various stages of economic development. A common factor across the region is the expectation of continued economic growth in 2012, in contrast to the European Union and the United States.
More mature markets such as Japan will likely experience slower growth. However, concerns remain in many other Asian economies over the impact that global economic weakness, increasing domestic consumption, infrastructure investment and trade within Asia will have on supporting continued growth.
Additionally, low levels of debt and large foreign reserves provide some buffer against further downside risks. There are also positive aspects from the sluggish economic conditions of western economies, including falling commodity prices and potentially lower inflationary pressures in some countries. However, inflation remains a concern, unless global economic activity falls sharply.
An expectation of continued economic growth in Asia-Pacific, along with the increasing number of elderly and a growing middle class, create significant opportunities for life insurers in the region to serve the financial needs of a wealthier, older customer base. At the same time, natural and man-made disasters have altered perceptions of risk, thereby enhancing the potential for non-life insurance products.
Not surprisingly, life and non-life insurers in 2012 are expected to continue to enjoy strong premium growth, as they have over the past few years.
This potential for growth presents both management challenges and risks for insurers, such as intensified competition from companies serving mature markets seeking expansion in less-developed markets. Furthermore, regulators in these markets are abetting these efforts by lowering some market-entry barriers.
|Five emerging trends that will command management's focus in 2012 include:|
|1||Meet diverse consumer needs for new insurance products|
|2||Develop and enhance distribution to meet consumer demand|
|3||Manage the human resource challenge|
|4||Address regulatory challenges|
|5||Invest in risk management and loss control|
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