Asia leads in embedded insurance, set to reach $170b by 2030

70% of global losses between 2016 and 2023 from natural disasters are uninsured.

The global insurance industry is grappling with limited paths to consistent profitable growth, according to McKinsey’s upcoming “Global Insurance Report 2025: The Pursuit of Growth”. 

The personal P&C sector, contributing $1.1t in gross written premiums in 2023, grew by 9.5%, driven primarily by rate hikes rather than market expansion. 

This growth has resulted in affordability challenges in developed markets, where industry relevance remains below pre-pandemic levels.  

Rapid changes in mobility trends, including a 35% increase in electric vehicle (EV) sales in 2023, are reshaping the sector. 

EVs, which could represent 15% of global vehicle operations by 2030 and 30% by 2035, drive higher average claim costs due to their more expensive components. 

Asia is leading the adoption of embedded insurance, particularly in non-life sectors, with the market projected to reach $170b by 2030.  

Natural disasters remain underinsured, with 70% of global losses between 2016 and 2023 uninsured, amounting to $260b annually.  

Public life insurers are regaining some ground thanks to favourable interest rates and renewed growth focus, but they still face declining relevance compared to other sectors. Transparency issues and slow growth in initiatives contribute to this disadvantage.  

The ageing global population presents a growth opportunity as wealth shifts toward Generation X and retirees. 

Insurers are expected to cater to the rising demand for retirement solutions, with the "silver" population projected to double by 2050. In Asia, innovations like integrated digital services are enhancing customer engagement, with China leading this trend.  

The commercial P&C sector has seen annual premium increases of 8% over the past five years, with profits growing as the industry’s average combined ratio declined to 91%. 

Top-performing insurers achieve better loss ratios by modernizing underwriting processes and leveraging AI for efficiencies.  

Despite these advances, cost pressures are causing small and medium enterprises (SMEs) to forgo certain coverages, creating gaps in protection. Addressing these gaps with cost-effective solutions represents a major opportunity for growth.