TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Coming soon to Asia-Pacific: An insurance boom
By most measures, Asians are drastically underinsured — and they have a lot of catching up to do.
Change Size
In many parts of Asia-Pacific, people are living longer, fueling the need for life insurance and the related savings products that can help preserve family wealth for the next generation. (Shutterstock/Mahathir Mohd Yasin)
A
sia-Pacific’s insurance market is on the cusp of a boom — one that will create enormous opportunities for insurers, provided they understand that the rules of engagement in the region are rapidly changing.
Demographics and economics tell the story. In China, India and Southeast Asia, households are accumulating wealth and the middle class is expanding. Total household wealth in the region is set to outstrip the United States by 2023, according to projections by Credit Suisse.
In the same time frame, the number of middle-class households will reach 109 million in mainland China and 83 million in India, according to Euromonitor.
These trends point to more people buying more insurance. As consumers become wealthier, they purchase more big-ticket items such as homes, cars and motorcycles — all of which need to be insured. As living standards improve, so does access to medical care, spurring demand for health insurance.
In many parts of Asia-Pacific, people are living longer, fueling the need for life insurance and the related savings products that can help preserve family wealth for the next generation.
By most measures, Asians are drastically underinsured — and they have a lot of catching up to do.
One indicator of insurance penetration, insurance spending as a percentage of gross domestic product (GDP), signals considerable unmet demand in Asia-Pacific’s developing markets. The Indonesian market’s insurance penetration is especially low at just 1.9 percent, as reported by the Organization for Economic Cooperation and Development, lower than that of Malaysia (4.5 percent) and India (3.6 percent), and far below the rates in more developed markets.
