Asian insurance market will emerge stronger after crisis: report
Asia will emerge stronger from the COVID-19 crisis and the region is expected to contribute more than half to global insurance premium growth until 2030, with China one of the main growth drivers.
Hit by the virus, 2020 is challenging for Asia, as premium income is expected to shrink by 0.7 percent in the region (excluding Japan) and by 3.8 percent globally this year compared with the pre-crisis trend and around 360 billion euros (US$405.9 billion) in premiums will go missing, according to Allianz Global Insurance Report 2020.
Most markets, however, will recover in 2021 and long-term prospects look brighter. For the next decade, over half of the global insurance premium increase, equivalent to around 1.27 billion euros, will come from Asia.
The region’s premium growth rate is estimated to settle down at 8.1 percent, against 4.4 percent across the world, and China, the biggest insurance market in Asia, will remain one of the growth drivers in the area, with average growth reaching 9.5 percent, the study said.
“Asia was the region first hit by COVID-19; it will also be the region that recovers first,” said Michaela Grimm, Allianz SE economist and co-author of the report.
“China and Asia will emerge even stronger than before from today’s crisis, as higher risk awareness and pent-up demand for social protection will drive growth in the coming years, with China in the lead,” he added.
For the next couple of years, the insurance giant expects double-digit increases in premiums in China. Up to 2030, China’s premium pool will grow by a whopping 777 billion euros – the market size of UK, France, Germany and Italy combined.
Against the background of population aging, life insurance is going to continue to be the stronger business line in China in the long run, with growth rates over the next decade adding up to a compound average of 9.8 percent against 8.8 percent in the P&C insurance business, according to the report.
In 2019, global insurance premiums increased by 4.4 percent to 3.90 billion euros, clocking the strongest growth in four years.
Asia (excluding Japan) set the pace with 6.8 percent and total premiums reached 947 billion euros, with China being responsible for almost half of all premiums written in the region.
Average per capita spending for insurance coverage (without health insurance) in China amounted to 317 billion euros in 2019, with total insurance premium corresponding to 3.7 percent of its GDP.