A.M. Best Publishes New Special Report Exploring Growth, Challenges In Asia-Pacific Region’s Competitive Non-Life Market

HONG KONG--(BUSINESS WIRE)--The Asia-Pacific region, with its fast-growing economies, is offering non-life insurers competing in the market large-scale challenges but lucrative rewards, a new special report from A.M. Best Co. finds.

“Rapid Growth, Stiff Competition Challenge Asia’s Non-Life Insurers”

The report, “Rapid Growth, Stiff Competition Challenge Asia’s Non-Life Insurers” explores how wealthier populations are driving demand for insurance, but competition and mounting losses are making underwriting profits elusive. Meanwhile, recovering investment portfolios remain subject to low interest rates and vulnerable to threats such as the European debt crisis. Hanging over all of this is the fact that the Pacific Rim is under constant threat of natural catastrophes, punctuated by the tragic Great East Japan Earthquake and tsunami in March that delivered a punishing blow to the results of Japan’s non-life insurers. Still, each of the region’s major markets is unique, and as such, developments and challenges are varied.

• For insurers in Japan, difficulties created by the earthquake and tsunami are compounded by a more stagnant economy than that of many of its neighbors, coupled with a mature market that leaves little room for growth.
• Strong investment results led South Korea’s non-life industry to a 32% increase in net income for the most recent fiscal year, while long-term products helped to drive top-line growth.

• In China, non-life direct premiums increased by 35.5%, primarily driven by motor insurance, as Chinese non-life insurers operated in an economy that saw gross domestic product increase by 10.3% during 2010.
• Non-life insurance premiums in India increased by 21.8% in the year through March 2011, as the four major state-run companies continued to dominate the market with a combined share of about 60%, more than 10 years after it was opened to private competition.

To access this special report, please visit www.ambest.com/press/110101AsiaPacificNonLifeSpecialReport.pdf.

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