The property insurance industry in Asia-Pacific (APAC) is projected to grow from $85.8bn in 2020 to $137.5bn in 2025, in terms of written premiums, according to data and analytics company GlobalData.
A new report predicts the property insurance industry in APAC will grow at a compound annual growth rate (CAGR) of 9.9% over 2020-2025, supported by the increasing demand for insurance against natural hazards and commercial developments.
GlobalData analysts note that commercial expansion and infrastructure development, along with regulatory support to develop sustainable property insurance products, have provided further impetus to the property insurance industry, which grew at a CAGR of 9.0% during 2016 -2020.
Japan is the largest market in the APAC region, accounting for 30% of the region’s written premiums in 2020, in part driven by the country’s exposure to high severity earthquakes, floods, and storms.
With 26% of the region’s written premium, China is the second-largest property insurance market, with agriculture insurance representing the major growth driver for property insurance in the country.
Along with the demand from agriculture, insurance to cover large-scale ongoing projects such as one-belt-one-road and renewal energy projects aided in the growth of property insurance in China.
Australia, India, and South Korea with a collective share of 30.8% were also among the top five markets in the APAC region in 2020.
“Asia-Pacific’s exposure to high severity natural-catastrophes (Nat-cat) in the last few years has resulted in strong awareness and demand for property insurance,” commented Kotu Keerthi Naimisha, Insurance Analyst at GlobalData.
“Premium growth is also driven by a consistent increase in insurance prices across the region since 2017, resulting from heavy Nat-cat losses, a trend that is expected to continue in 2022,” Keerthi continued.
“Economic growth and growing demand from agriculture industry will support demand for property insurance in APAC region over the next five years. Product development for affordable Nat-cat insurance will be another focus area for insurers over the coming years.”
