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Moody’s keen on Asean market
Growth prospects for Asean insurance markets look robust and are supported by strong socioeconomic fundamentals, says a report by Moody’s Investors Service.
The study looked at six markets in Asean — Singapore, Thailand, Malaysia, Indonesia, Vietnam and the Philippines. While each market’s growth differed in pace and quality, the overall outlook was good for insurance.
“The strong fundamentals include urbanisation, a growing middle class, low insurance penetration, and the lack of a sufficiently funded welfare system,” said Frank Yuen, assistant vice-president and analyst at Moody’s.
“However, the pace and quality of such growth will vary to reflect differences in market maturity, financial depth, demographics and policies, and the insurance industry in these countries are finding different ways to overcome common growth bottlenecks.”
Some potential setbacks for distributing insurance in Asean are low protection content in mainstream products, shallow bond markets that limit investment options, and an increasing need to improve the capacity of industries to withstand shocks and support growth through tightening risk-based capital regimes.
According to Moody’s, Asean governments are aware of widening protection gaps in the region among underserved segments of their populations and addressed these concerns through policies. The report said economic incentives for insurance coverage are emerging throughout the region, particularly in medical and retirement coverage.
Thailand and Malaysia have seen strong premium growth for critical illnesses and medical products. Singapore’s ageing population has contributed to rising growth in retirement annuity policies. Indonesia’s increased investments in infrastructure have led to higher demand for property and fire insurance, while the Philippines’ exposure to natural disasters caused more demand for catastrophic loss insurance.
Economic developments in the region will support growth of non-life premiums, said Moody’s.
Source: https://www.bangkokpost.com/business/news/1568818/moodys-keen-on-asean-market