Reinsurance News

Fitch highlights pandemic impact on reinsurance market throughout Asia

6th September 2022 - Author: Jack Willard

According to analysts at Fitch, Thailand’s life industry has no exposure to lump-sum payout policies, and experienced stable operation during the COVID-19 pandemic.

asia-globeAnalysts also noted that local life reinsurers remain profitable with a rise in COVID-19 related health claims partially offset by lower claims in other products.

At the same time, analysts highlighted that they believed the acceleration in Q122 premium growth in China was driven mainly due to the low base in Q121, which saw motor premium volume shrank following comprehensive motor-insurance reform in September 2020.

However, motor premiums increased by 8.1% yoy in Q122, against a 6.2% Q121 drop, despite pandemic lockdowns in several major cities undermining new vehicles sales in 4M22. But, analysts warned that continued lockdowns could slow H2 22 premium growth.

Meanwhile, China’s non-motor policies also expanded in Q122, but growth dynamics were weaker than a year ago. Non-motor business increased by 13.6% by direct premiums and accounted for 54% of total direct business.

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Analysts noted that they expect demand for excess-of-loss treaties to rise as the portion of non- motor business increases.

Additionally, demand for reinsurance policies, such as health, liability and agriculture, should stay robust in the short-term in consideration of the strong growth, low penetration rates and limited underwriting capacity of mid- to small direct non-life insurers.

Furthermore, Fitch recently highlighted the impacts that inflation and nat cats are going to have on the Asian reinsurance market.

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