Non-life Insurance Fast Gaining Prominence In Asia

New Delhi, September 29: | Updated: Sep 30 2003, 05:30am hrs
Non-life insurance markets in China and India are fast gaining importance in the Asian region, the latest Swiss Re sigma study has concluded.

The study, titled Asias non-life insurance markets, has forecast a positive outlook for non-life insurance in Asia, asserting that the outbreak of the Severe Acute Respiratory Syndrome (Sars) early in 2003 had only temporarily dampened market growth.

At the same time, the study observed, the corporate landscape and competitive behaviour in the insurance industry were changing fast. After a break in 2001, growth rates in the non-life insurance business resumed their faster pace. Premia rose across the region with strong growth recorded in most emerging markets. It expected growth to substantially exceed that of most OECD markets. Nonetheless, it added, weak stock markets in 2001 and 2002 had taken their toll on insurers capital bases, thus reinforcing the need to focus on underwriting quality.

According to the study, deregulation and phase-out of state ownership were fast reshaping the insurance landscape, and the industry would see further consolidation in the coming years. This would lead to more concentrated and polarised markets. State-owned insurers were still a significant force in Asia accounting for over a fourth of the premiums outside Japan, while foreign insurers - though making up some 40 per cent of all insurers - had only a 10 per cent market share. Nevertheless, foreign insurers were poised to take on a more active role in the development of the regions insurance business over the medium to longer term, despite recent reticence in business expansion.