Property Insurance Trends in the APAC Region
The APAC property insurance industry is expected to grow, but it depends on a lot of important things, like more people wanting policies that cover natural catastrophic (NatCat) events, big investments in infrastructure projects, new insurance products, and changing rules and regulations.
China, Japan, and Australia are the top three markets for property insurance. Together, they will account for 76.0% of the region’s written premiums in 2023, showing how important these countries are to the growth of the industry.
Dynamics in Key Markets – China, Japan, And Australia
China leads the regional market, capturing a significant 35.3% share of APAC’s written premiums in 2023. Its expected CAGR of 14.4% over the next five years is underpinned by the rising demand for NatCat policies and favorable regulatory developments. Notably, the expansion of parametric insurance beyond agriculture, coupled with regulatory mandates to improve agricultural and personal insurance, stands as a pivotal trend driving growth.
Japan follows as the second-largest market, with a 25.1% share of written premiums in 2023. The expected CAGR of 9.1% over 2023-27 is supported by increased fire insurance premiums amid heightened climate risks and growth in the construction and energy sectors. The recent rise in construction contracts and ongoing infrastructure projects are further propelling this growth.
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Australia secures the third-largest regional market position, accounting for a 15.6% share of written premiums in 2023. Anticipated to grow at a CAGR of 11.7% over the next five years, this growth is driven by increased fire and home multi-risk insurance premiums. The introduction of the decennial liability insurance product by the Australian government stands as a significant support for insurers, creating new business opportunities within the sector.
Other important markets – India, New Zealand, and Singapore
India and New Zealand, two of the top five markets in the region, will account for a big chunk (9.7% and 3%, respectively) of the written premiums in the region in 2023. Their expected CAGRs of 8.7% and 10.6% from 2023 to 2027 show that they have a lot of room to grow, mostly because of rising demand in the energy and building industries.
Vangari, an Insurance Analyst at GlobalData, says that even though there will be a lot of growth, insurers will focus on making changes to their portfolios to reduce the risk of major losses and keep making money in the APAC property insurance market, which is always changing.
The general insurance market in Singapore is expected to grow at a good rate, with a compound annual growth rate (CAGR) of 5.8%. GlobalData predicts that gross written premiums (GWP) will rise sharply, from SGD5.54 billion ($4.02 billion) in 2023 to SGD7.35 billion ($5.5 billion) in 2028. Key changes in different types of insurance are causing this growth.
Notably, Personal Accident and Health (PA&H) insurance has taken over from car insurance as the largest type of general insurance, with a 23.9% share of the GWP in 2023. This paradigm shift was caused by a huge 32.6% growth in 2022, which was due to higher demand after the pandemic and less strict travel rules, which shows how important health care is.
In Singapore, property insurance makes up 19.1% of the general insurance GWP. It is mostly supported by the need for required fire insurance. However, auto insurance rates dropped by 7.9% in 2022 because fewer cars were being sold because the registration fee for high-end cars went up. Even with these setbacks, the insurance business is still strong thanks to investments in infrastructure and a strong demand for health insurance after the pandemic.
