APAC emerging market insurers outperform peers during volatility

But they do face constraints in scale and diversification.

Insurance companies in Asia Pacific’s emerging markets have sustained growth and profitability better in times of volatility compared to their peers from mature markets, according to an analyst by AM Best.

However, they face constraints in scale, diversification, and regulatory consistency compared to those in mature markets.

In contrast, insurers operating in mature markets show higher shares of favourable business profile assessments, supported by data and product sophistication, established distribution channels and diversified operations.

Overall, the stability of insurers rated by AM Best remains prevalent, AM Best said.

“According to the report, approximately 60% of rated insurers fall within the top two strength categories - strongest or very strong - reflecting sound capitalisation and prudent asset management,” said David Lopes, senior industry analyst, AM Best.