The outlook for Asian insurers is bright with one estimate that general agent assets will grow to nearly $1 trillion by the end of 2023.
Insurance general agent (GA) assets reached $551 billion in 2018-end after posting a CAGR of 16.5 percent from 2013 to 2018, according to a recent Broadridge research report. From 2019-2023, the assets are projected to grow at a CAGR of 11.2 percent to reach $937 billion, making it one of the fastest-growing market opportunity for third party asset managers.
According to the «APAC Institutional Client Opportunities 2019» report, average returns from third party asset managers ranged between 4-6 percent.
Among the major subsets of opportunities is the growing demand for passive and alternative exposure. Insurance GA assets in the region are flowing into passives like bond ETFs and index funds for cheaper, diversified exposure, the report said. In addition, Asian insurers are also seeking for alternatives, both domestically and internationally, particularly in exposure linked to physical assets such as infrastructure debt and real estate.
Insurance Asset Management Capabilities
Given the outlook, asset managers are building insurance asset management capabilities to better position themselves to capture market share. Such intentions are evidenced by hiring from insurers for internal investment teams
«Asian insurers often seek external managers with experience managing insurance assets due to a lack in understanding the risk-return characteristics and regulatory requirements of insurance companies,» said Yoon Ng, director, APAC Insights at Broadridge. «Addressing this gap is the key to strengthening client relationships.»
