Moody's: Asean insurance markets robust
Moody's Investors Service says the growth prospects for insurance in six major Asean markets are supported by strong socio-economic fundamentals, but the pace and quality of growth will vary by geography.
The markets include Singapore, Thailand, Malaysia, Indonesia, Vietnam and the Philippines.
"The strong fundamentals include urbanisation, a growing middle class, low insurance penetration, and the lack of a sufficiently funded welfare system," said analyst Frank Yuen.
"However, the pace and quality of such growth will vary to reflect differences in market maturity, financial depth, demographics and policies, and the insurance industry in these countries are finding different ways to overcome common growth bottlenecks," said Yuen.
The bottlenecks include difficulties in expanding and enhancing distribution capabilities, low protection content in mainstream products, shallow bond markets that limit investment options, and an increasing need to improve the capacity of industries to withstand shocks and support growth through tightening risk-based capital regimes.
Asean governments are also aware of the widening protection gaps in the region, in particular among underserved segments, and have addressed these concerns through policies.
The report notes that economic incentives for insurance coverage are emerging throughout the region, particularly in medical and retirement coverage.
The markets examined provide some health coverage, but their ability to sustain such coverage varies, leading to opportunities for commercial insurers to fill gaps.
In that regard, Thailand and Malaysia have witnessed strong premium growth for critical illness and medical products, while Singapore's ageing working population supports the steady growth in retirement annuity policies.
