Moody’s Japan says that its stable outlook for the Asia Pacific re/insurance sector is underpinned by generally strong capitalisation, steady product margins and resilient premium growth.
While the pandemic has temporarily disrupted policy sales, Moody’s believes that insurers’ premium base is supported by long-duration existing policies.
Analsts added that new sales should rebound especially amid rising demand for health insurance.
Insurers are also increasingly adopting new technologies such as face-recognition and e-signature techniques to broaden the range of policies that can be sold online.
Similarly, environmental, social and governance (ESG) considerations are increasingly affecting insurers’ investment and underwriting decisions, although exposure to legacy assets remains a drag, in Moody’s view.
“Despite the disruption brought on by the coronavirus pandemic, insurers still have achieved modest business and premium growth, while continued strong capitalization offsets their rising allocation to risky assets amid a low interest rate environment,” said Soichiro Makimoto, a Moody’s Vice President and Senior Analyst.
“Still, the pandemic will bring about both short-term and long-term change for the sector, including through rising health awareness, changing social interaction patterns, and digitalization,” Makimoto added.
Within Asia Pacific, Moody’s maintains a stable outlook for P&C insurers in China, Japan and Korea, and for life insurers in China.
Its outlook for life insurers in Japan, Korea and Taiwan remains negative, reflecting concerns over the impact of prolonged low interest rates and potential capital markets volatility.
