Asia becoming more important to global insurance business, Swiss Re says
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SWISS REINSURANCE expects the insurance business to depend more on Asia in the future, as middle-income earners achieve higher purchasing power and life expectancy in the region rises.
Jonathan Tang, an economist at the reinsurance giant, said the structure of the global insurance market would likely change considerably in the future, with Asia becoming more important. Life-insurance premiums in Asia are estimated to rise from 4 per cent of the global market in 2012 to 6 per cent in 2023. China is expected to rise even more than the regional average, from 5 per cent to 13 per cent.
Non-life premiums in Asian countries including China are expected to edge up from 3 per cent to 4 per cent by 2023. China is expected to see its non-life-insurance share rise from 5 per cent to 13 per cent.
Given the rising number of middle-income earners with more purchasing power in Asia, the insurance market could see consistent expansion, Tang said.
Asian life expectancies are also getting longer. Thailand is expected to see the proportion of its people aged 65 years and up rise to 20 per cent of the total population by 2030, which is also expected to drive premium income.
Last year, the United States ranked first for insurance premiums, followed by Japan, Britain and China. Thailand was ranked 31st with total premiums of US$18.7 billion (Bt592 billion). Switzerland was ranked first for insurance premiums per capita at $7,500, trailed by the Netherlands’ $6,000. Thailand came 53rd with average premiums of $266.
Insurance premiums totalled $4.6 trillion across the world. Of the total, 56 per cent were for life insurance, 35 per cent for non-life insurance and 9 per cent for health insurance.
Tang believes developed countries face uncertain economic futures, particularly the US, the Europe and Japan.
The US is expected to see high default risk, while the European Union, while it has started to see some recovery, is not out of the doldrums yet. The EU countries still need to be cautious with credit extension.
Capital is also expected to move to other countries, particularly emerging countries in Asia, with higher asset returns, Tang said.
In the first 10 months of this year, Asia continued to see relatively high foreign-exchange volatility, he said, expecting Thailand to be affected by this.
