McKinsey & Company

Cyber insurance market in Asia is projected to triple in size from 2022 to 2025.

P&Cs in the Asia Pacific stand at only 0.5% of real GDP or half of the global penetration ratio.

McKinsey & Company’s Senior Partner Bernhard Kotanko discusses the company's recent report on commercial property and casualty insurance in Asia. He says that the commercial P&C industry globally has seen growth in the 6-8% CAGR range since 2018 with a very hard market and strong rates. However, he warns that the industry is now at an inflexion point with new risks emerging, such as cyber, climate change, managing risks along new value chains, and business interruptions. Kotanko recommends that insurers invest more in market-making and put more emphasis on Asia whilst understanding how they can develop distribution models to be closer to their customers.

Thanks to these threats, 54% of insurers had an ROE below their cost of equity.

Unconscious bias and ‘double shifting’ are just some of the known hurdles.

These issues have plagued the industry for a decade.