Demand for protection against natural disasters is spurring the growth.
The total property insurance premium in Asia Pacific (APAC) will hit $85.6b in 2023 from $71.5b in 2019, propelled by rising demand for insurance covering natural hazards, construction and industrial developments, according to a GlobalData report.
The industry is set to grow at a CAGR of 4.6% during the period.
Many economies in the region are now recovering after the lifting of lockdown restrictions, said analyst Manisha Varma. China, which accounted for over 25% of APAC’s property insurance market in 2019, is expected to register 5.1% growth in 2020 due to resumption in construction and manufacturing activities.
Vietnam is expected to record the fastest growth in the region at 6% due to recovery in manufacturing and exports.
Investment in infrastructure and regulatory support will provide further impetus to the property insurance industry in the region. China’s insurance regulator announced a three-year action plan in August to transform its property insurance sector by 2022. In July, the insurance regulatory authority of Macau launched catastrophe property insurance plans for SMEs.
Moreover, the adoption of parametric insurance as a viable solution to check damages for large-scale natural disasters is another area that will gain traction. For instance, Swiss Re introduced ‘Insur8’ in Hong Kong, which provides a pre-agreed amount based on warning signals from the Hong Kong Observatory.
“Property insurance industry is expected to evolve driven by technological developments, which allow insurers to provide customized and event-specific insurance. Furthermore, positive regulatory developments across several markets will be conducive to the development of the property insurance industry in the region,” Varma said.
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