0:20
Hello and a very warm welcome to 2024 market update for Asia.
0:25
My name is Ben Dunstan and I'm the Head of Broking and Placement for WTW in Asia.
0:31
Broadly speaking, for large and complex risks, we've seen property pricing at between 0 and -5% with no changes to overall capacity, which appears to be stable compared to 2023.
0:43
The combination of recent impressive underwriting results, seen broadly across the industry and aggressive growth plans will lead to increased competition and pressure on pricing later in 2024 and we'll cover that in the next report.
0:57
In terms of coverage, not much has changed for strikes, riots and civil commotions, cyber and infectious disease exclusions.
1:05
However, there is a continued underwriting discipline around business interruption where there remains concern that global supply chain and geopolitical issues can extend replacement times for critical equipment.
1:19
Natural catastrophe sub limits also remain an area of focus and scrutiny.
1:25
You'll hear from my colleagues in speciality about the capacity, coverage and pricing specific to their markets and line of business.
1:31
So we encourage you to access those reports on the website.
1:36
Asia is of course extremely diverse and insurance markets here are at different stages of maturity.
1:43
They are driven by their own influences surrounding reinsurance, government policy and traditional role within the economy.
1:50
I'd like to focus this report more on the geographical markets, notably 3 powerful domestic markets, China, India and Japan.
2:01
Let's start with China.
2:03
The Chinese market is still in the soft market cycle, with flat to -10% seen on standard property and casualty accounts.
2:11
However, in the case of overseas projects, the definition of Chinese interest overseas is tightening, and the market capacity is shrinking.
2:20
Where a project is not deemed to have a Chinese interest, very few domestic insurers are able to support, which means seeking international market support at international market pricing and conditions.
2:33
In addition to this, for some risks, for example in the semiconductor industry, Chinese insurance placements need more capacity. In order to attract more capacity from international market and also to break the premium deficit.
2:47
China is building an international reinsurance centre and in the past six months many insurers and brokers, including WTW have set up office in the Shanghai Reinsurance Centre.
2:59
Let's move to India.
3:01
The Indian market continues its hard market cycle, notably in the areas of property and cyber liability.
3:08
The insurers have once again hardened their stance on property by increasing rates for natural catastrophe perils and they're restricting the discounts on rating which were being allowed up until now.
3:19
Structurally, the reinsurance hub in India, situated at Gift City just outside Gujarat, has expanded to include MGAs, which can operate on equal terms with foreign reinsurance branches of international companies in providing a reinsurance capability.
3:36
Most of the first party lines other than Oil, Energy, Harlan Aviation have ample domestic capacities.
3:44
State insurer New India leads the pack on GWP, closely followed by ICICI Lombard, Tata AIG, HDFC and Bajaj Aliant.
3:55
The other state insurers are struggling with solvency margin issues and there is now a cultural shift which is veering towards the private sector.
4:03
As with many other regional markets, macro issues such as inflation are likely to impact market rate conditions moving forward into 2024 and 2025.
4:15
As India crosses a threshold to become the most populous country in the world and with the flow of GWP towards private sector, international insurers are showing a keen interest in upscaling or acquiring footprint in the country.
4:30
Moving to Japan. The Japanese market continues its hard market cycle phase with insurers cautious in deploying capacity, reducing line sizes and generally looking at rate increases of between 5 and 10% across the portfolio.
4:46
There is also a drive within the insurers to cleanse their portfolio on legacy and loss making accounts, which is impacting products such as renewable energy and international property risks at a rapid pace within the local market.
4:59
Across all three geographies, however, there is a significant opportunity for the insurance market to grow their GWP base in strategic industries resulting from heightened economic activity across construction, marine, property and casualty lines to the benefit of the wider Asian region.
5:24
I'd like to thank you all for checking in and look forward to speaking again in 2024 on the next market report.
