RIMS Panel: The ABCs of the Asian Insurance Market

Asia Globe (blue)
It is estimated that by 2015, approximately 39% of the world’s economy is predicted to be in the Asia Pacific region. With 60% of the world’s population and 30% of the earth’s land area, Asia represents a huge, but complex opportunity for the insurance industry.

In my presentation at today’s “Doing Business in Asia” session at the annual RIMS conference, I gave delegates an overview of the insurance marketplace and the trends and issues that are shaping it. You can access my slides here: RIMS Presentation INT204: The Asian Insurance Market.

Singapore is the Asian insurance hub with large markets developing rapidly in China, Japan, South Korea and India over the last decade. The marketplace as a whole is extremely competitive (there are over 400 brokers and 59 insurers, including all the global players, in China alone!) and local capacity is easy to come by.

Land of Losses?

RIMS Presentation INT204: Doing Business In Asia

Download my RIMS presentation: "THE ASIAN INSURANCE MARKET" (PPT)

The world’s eyes were turned towards Asia last year as the region experienced 70%, or $265bn, of the total economic losses of $380bn from natural disasters around the world, according to Munich Re. This included the $210bn earthquake and tsunami in Japan and the $40bn Thailand floods.

While the region’s growth potential is massive, its record-breaking share of natural catastrophe losses in 2011 have started to put the brakes on in the Asian insurance market, and we’re starting to see some hardening, particularly for cat-exposed companies who are seeing price increases of over 30%.


As the most sophisticated insurance market in Asia, Singapore continues to attract more insurers and brokers and currently writes over $7bn in direct premium. In addition, there is a significant reinsurance presence with over 28 reinsurers representing some $2.6bn in premium. Lloyd’s is also a big player there with 22 syndicates and $250-$300m of Gross Written Premium (GWP). In fact, the local market is robust enough to have recently placed 100% of a $5bn property risk.


As in most areas of the economy, China’s insurance sector is booming and is experiencing the fastest premium growth out of all the Asian markets at 28%. Over 70% of the non-life market is focused on motor insurance. Even though the market is highly protected, there is still huge opportunity for foreign insurers to grow their business as the market slowly opens up – at present, non-Chinese companies only make up 1.8% of the non-life market. Two of the biggest areas for insurers to grow their business are infrastructure projects (as this list of 108 multibillion dollar super projects shows), and Directors’ and Officers’ liability as Chinese companies expand globally (there were 29 Chinese IPOs in the U.S. in 2010 and 2011 worth $4.3bn).

The Asian Big Five

Large Insurers Total Insurers Property Capacity Liability Capacity Motor %
Singapore All the usual suspects 151 made up of:

  • 62 direct
  • 65 brokers
$3.5 bn $700 m NA
China 3 giants 59 made up of:

  • 38 domestic
  • 21 foreign
$3 bn $10 m 74.4%
Japan 3 giants 50 $850* m $242* m 46.1%
South Korea 5 domestic multiline 19 made up of:

  • 9 domestic multiline
  • 4 direct motor
  • 1 state owned credit
  • 5 foreign
$1.2 bn $100 m 23.5%
India 4 large domestic 24 $180 m $50 m 40
*Excluding Flood Earthquake, Tsunami & Special Risk


Japan operates very much as its own market and is number one in Asia for total premium and second only to the US with regards to global premium share. With regards to non-life premium, Japan reigns in Asia and is number three in the world behind the US and Germany. The insurance industry there is dominated by three mega insurers who account for 80% of the local market share. While the majority of the Tohoku quake and tsunami Household Earthquake and Nuclear losses were picked up by the Japanese government, private insurers still face billions of dollars in losses around Property and Business Interruption claims.

South Korea

The South Korean market is led by five large, multiline domestic insurers who make up 78% of the $50bn market. The market is upping its game introducing several new schemes including revised motor pricing rules to rein in claims escalation, and a new risk-based capital solvency regime designed to improve the financial stability of insurers.


This highly-regulated market is split between four state-owned insurers with $5bn GWP and private insurers with $3.5bn GWP. Foreign insurers are frustrated by a 26% cap on foreign ownership of insurance companies which is holding them back from benefiting from strong Motor and Property business growth.

How to Compete in Asia

As the regional insurance market has developed in Asia, it has often offered more competitive solutions than the international markets. To get a piece of this pie, insurance companies needs to bear in mind the following:

  • Have boots on the ground – Asian clients like a quick turn-around in the same time zone. By being based in the region, insurers and reinsurers can benefit from lower acquisition costs on some business.
  • Know your clients – Building local knowledge of risk profiles and business practice in the region can allow adaption of underwriting models to fit Asia.
  • Keep Your Best People Close – There is a war for talent in the region and companies that invest heavily in winning, training and retaining good staff will be the winners.


Roger WilkinsonGuest blogger Roger Wilkinson is Chairman & CEO-Asia Pacific, Middle East & Africa, of Willis International, based in Hong Kong.

Categories: Asia | Tags: , , , ,

One Response to RIMS Panel: The ABCs of the Asian Insurance Market

  1. Excellent summary of the Asian insurance market. Concise and very useful.

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