McKinsey, Asia insurance industry trends, Asia life insurance trends 2023, Asia property insurance casualty insurance trends.
Based on its proprietary databases and also public disclosures by regulators and insurers, McKinsey has published a report on insurance trends in Asia.
For the life insurance sector, projections indicate that by 2030, the difference between the financial protection needed by individuals and their families in case of death versus and the actual coverage they have in place — called the “mortality protection gap” is poised to widen exponentially to US$119tn.
As the industry in Asia had faced a slowdown in 2017 to 2022 including the COVID-19 pandemic period, the latest data has indicated a surge in innovation, particularly in response to risks such as climate change and cyber threats, along with a rapidly urbanizing populations.
Finally, with Asia’s rapidly ageing population, current pension systems display notable gaps in coverage and replacement rates, even in well-developed markets.
Property and Casualty insurance trends
The report asserts that Asia’s property and casualty (P&C) insurance sector is at an inflection point. Notably:
- This sector in Asia represented a mere 20% of the global premium share in the P&C insurance sector in 2022.
- P&C insurance penetration in Asia has remained low, stagnating at 1–2% over the past decade.
- Recent challenges have included a surge in catastrophic claims; the relentless escalation of operational expenses; the growing prevalence of cyberattacks and also the rapid adoption of electric vehicles that amplify P&C risks.
- Increased climate risks, cyber risks, and other operational challenges will have an increasingly significant impact on insurers in Asia. As Asia has been characterized as a hot zone for cyberattacks, the cyber insurance market in Asia is expected to triple in size from 2022 to 2025.
- By 2030, digitally embedded insurance is expected to account for 10% of premiums, or US$270bn in Asia.
With both insurance sectors at turning points, the report authors recommend industry stakeholders to boost agility, adaptability, innovation, continuous learning; and narrow technological gaps — among other business survival mandates.