Global insurance outlooks 2013

Asia-Pacific

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Top-line growth opportunities in 2013 are significant in both developing and mature Asia-Pacific markets, despite lower interest rates and relatively slow economic growth.

Mergers, acquisitions and divestitures are increasingly on the agenda for local, regional and non-Asian insurers, due to the difficulties achieving organic growth.

For companies in developing markets, the growing middle class represents a major source of premium and profit potential. Insurers in more mature markets can grow by enhancing product and service offerings to meet consumers’ more complex financial planning needs.

In addition to those market-specific issues, Asia-Pacific insurers face several common challenges in 2013:

  • Negotiating a culturally diverse market with changing demographics
  • Managing a rapidly changing regulatory environment
  • Understanding the evolving regional catastrophe risk
  • Identifying innovative strategies that address mobile technology
  • Investing in operations and infrastructure to enable growth and improve risk management

Seeking growth

Domestic and international insurers will benefit from Asia-Pacific’s organic premium growth potential, the byproduct of strong economic growth and rising insurance penetration rate. Regardless, insurers will need to be selective about entering and exiting markets, utilizing distribution models and managing costs.

Mergers, acquisitions and divestitures are increasingly on the agenda for local, regional and non-Asian insurers. The emergence of health insurance and pensions also presents growth opportunities.

Regulatory patchwork

Regulators seeking to bolster consumer confidence in the insurance industry are implementing measures to increase product transparency and service standards. As regulations develop, insurers will need to adapt their products and business models accordingly.

Some regulations (adopting capital models, enterprise risk management, IFRS accounting standards and increased consumer protection) are already under development; others are less imminent.

Asia-Pacific insurance regulations are not likely to be carbon copies of the European and US models, as each market is quite distinct.

Investing in technology

Given the demands of more complex products and data analytics, technology investment is a strategic necessity in 2013. Emerging regulations will also catalyze the replacement of legacy IT systems.

To keep pace with the mobile revolution, insurers must develop new distribution and service strategies to retain market share and gain competitive advantage.

Download the 2013 Asia-Pacific insurance outlook for more insights into this market.