According to data and analytics company GlobalData, the marine, aviation and transit (MAT) insurance industry in Asia-Pacific is projected to grow from $11.2bn in 2019 to $14.5bn in 2025, in terms of written premiums.
The report also revealed that that MAT insurance industry in Asia-Pacific is expected grow at a compound annual growth rate (CAGR) of 4.4% over 2019-2025.
Deblina Mitra, Senior Insurance Analyst at GlobalData, commented: “Air-travel restrictions, supply chain disruptions and weak economy slowed the industry’s growth in 2020 in Asia-Pacific.”
Japan and China, which are among the top five global markets, collectively accounted for 60% of Asia-Pacific’s premiums in 2020. China’s intricate presence in global supply chain and its growing airline and marine fleet are strong growth drivers for insurers.
Asia-Pacific has also seen several insurers withdrawing from MAT industry due to years of unsustainable losses resulting from both man-made and natural hazards and bottomed out premium prices which resulted in reduced market capacity.
GlobalData explained that for instance, Allianz, Swiss Re and Ascot withdrew from Singapore while Axa-XL withdrew from hull underwriting in Hong Kong and marine liability in Singapore in 2020.
The report noted that the impact on premium price increase due to these market exits were mostly offset by the entry of new players such as China-based Donghai Marine Insurance and the resurgence of Lloyd’s syndicate’s presence in the region.
The regulation mandates shipowners to make changes in ship parts and fuel to comply with the standards. This exposes insurers to high claim risk and can lead to increase in prices.
Mitra added: “The enactment of new sulfur limits as per the International Maritime Organisation ruling in 2020 is a development that aims to tackle global warming contributed by the maritime sector and is a focus area for insurers.
“Delayed recovery in the aviation sector and uneven progress of vaccines will continue to restrict the growth of aviation premium in the region this year.”