Global insurance penetration fell to a 30-year low, while stricter oversight in China and a shrinking life market in Korea means the region accounted for only 16 percent of global growth, compared to 81 percent in 2017. However, this market is poised for growth.
Insurance premiums (excluding health insurance) in Asia ex-Japan rose 2.3 percent in 2018, while global insurance premiums increased 3.3 percent to 3,655 billion euros ($4,076.5 billion), according to projections by Allianz Research published today in the annual Allianz Global Insurance Report.
This makes 2018 the third year in a row, or the 12th year in the past 15, that global premium growth lagged economic growth (5.7 percent in 2018), the report noted. In Asia ex-Japan, 2018 was only the second time since 2000 that premium growth trailed global growth.
At the same time, insurance penetration (premiums as a share of GDP) fell to 5.4 percent – the lowest in 30 years. The U.S. accounted for the largest share of global growth (42 percent), while Japan accounted for 11 percent. Asia ex-Japan only accounted for 16 percent, compared to 81 percent in 2018.
Michael Heise, chief economist, Allianz SE
«On the one hand, the risks in the world are constantly increasing – just think of climate change, demography, cyber or politics – but on the other hand, people worldwide are spending an ever smaller proportion of their income on insurance,» Michael Heise (pictured above), chief economist of Allianz SE, said.
China – Market to Watch
This slowdown in Asia was attributed to shrinking life markets in China and Korea, which together account for 40 percent of the total regional pool, and in particular, the regulatory crackdown on insurance intermediaries selling wealth management products in China.
However, the report noted that the stricter oversight and technological progress in China's market signals the next phase of more balanced and sustainable development. As such, it projected a rebound in Asia ex-Japan in the next year, with 11 percent premium growth.
«It is the clear frontrunner in the application of AI or innovative payment solutions – China is the market to watch. It’s the best place to learn about the future of our industry. ‘Sold in China’ is the new gold standard in insurance,» Michaela Grimm, economist at Allianz Research, said.
Long-Term Prospects
Allianz expects global premium growth to reach around 5 percent in the next decade, with slightly faster growth in life insurance compared to the property and causality market, given accelerating demographic change, particularly in emerging markets with underdeveloped social security systems.
In Asia ex-Japan, this figure is expected to reach 9.4 percent, with around 60 percent of additional premiums generated in this region.
