2018 was an eventful year for the Asian insurance market.
The Lion Air disaster, Lombok earthquake, Osaka earthquake, Typhoons Mangkhut and Jebi, plus other high-profile losses marked significant attrition losses and continued downward pressure on rates, impacting results across many insurer portfolios.
With sustained losses by most international insurers, many have now re-engineered their portfolios. Indeed, treaty reinsurance renewals in general terms were flat to 5 per cent down.
However, not all domestic markets have had the same experience nor are all countries seeing a hardening marketplace.
CHINA BUCKS THE TREND
China continues to ‘buck the trend’ and grow as an increasingly important hub for non-Chinese business.
There has been a tighter scrutiny of underwriting practices, particularly of international carriers with resulting withdrawals from certain countries, lines of business and, in some cases, the region altogether.
Lloyd’s Kiln in Hong Kong and CNA Hardy in Singapore have withdrawn from Asia, evidencing that the market will get even tougher in certain territories and lines of business with a return to technical underwriting.
THE FORECAST FOR 2019
2019 will be a challenging year for clients, in particular, on large and complex risks.
A tougher, more professional marketplace and increasing political and economic pressures around the world will necessitate a more considered approach to risk and insurance.
Whilst challenging market conditions will continue, we strongly believe that a more professional marketplace will emerge, particularly for those who provide quality information, data and analysis.
The current business model is unsustainable — premiums being driven ever lower, loss making portfolios for insurers, brokers undermining their own value proposition by charging below cost fees (in the hope of earning undisclosed commissions) and clients being provided with cheap but, in many instances, poor products.