Insurance trends in Asia. Clarence Wong, Chief Economist Asia Pacific 11 April 2011 Hong Kong

Transcription

1 Insurnce trends in Asi Clrence Wong, Chief Economist Asi Pcific 11 April 2011 Hong Kong

2 Asi's insurnce mrket outlook nd drivers 2 Asi is now significnt prt of the globl primry insurnce mrket Premiums, USD bn 2009 Source: Swiss Re sigm 2/2010 December 2010 updte 3

3 Though regionl mrkets re frgmented nd t different stges of development Jpn Tiwn Hong Kong Life premiums, 2009 (USD 10 billion) Non-life premiums, 2009 (USD 10 billion) South Kore Tiwn Austrli Jpn Philippines Singpore Austrli SG HK MY PH ID South Kore TH Indi MY TH ID Vietnm Chin Indi Chin Vietnm Sources: Oxford Economics; Swiss Re ER&C. Yellow bubbles represent life insurnce while grey bubbles represent non-life insurnce. Size of bubble represents premiums in SG: Singpore; HK: Hong Kong; MY: Mlysi; TH: Thilnd; ID: Indonesi. 4 Steep growth pths of Asi s life mrkets highlight ctch-up potentil of emerging mrkets Life premiums/gdp (%) 16% Potentil 14% 12% 10% 8% Tiwn Jpn 6% 4% Indi Current penetrtion of emerging mrkets 2% Chin 0% Austrli Chin Hong Kong Indi Indonesi Jpn Mlysi Philippines Singpore South Kore Tiwn Thilnd Vietnm * Dt series of penetrtion strt from 1980 onwrds except Vietnm: 1996; Chin: 1982; Hong Kong: 1990 Source: Swiss Re Economic Reserch & Consulting Per cpit GDP, USD 000 (log scle) 5

4 Growth of non-life penetrtion reflects stges of economic development Non-life premiums/gdp (%) 4.0% 3.5% Potentil 3.0% 2.5% 2.0% Tiwn Jpn Current penetrtion of emerging mrkets 1.5% Chin 1.0% Indi 0.5% 0.0% Austrli Chin Hong Kong Indi Indonesi Jpn Mlysi Philippines Singpore South Kore Tiwn Thilnd Vietnm Per cpit GDP, USD 000 (log scle) * Dt series of penetrtion strt from 1980 onwrds except Vietnm: 1987; Hong Kong: Source: Swiss Re Economic Reserch & Consulting 6 Ner term economic trends will impct insurnce demnd Sustined economic growth of Asi Mjor themes Reblncing of ntionl economies Accelerting infltion Fiscl consolidtion Cpitl inflows Relted issues Infrstructure investment Privte consumption Commodity/food prices & exchnge rtes Fiscl deficit nd geing popultion Mcroprudentil supervision Source: Swiss Re Economic Reserch & Consulting. 7

5 Demogrphic chnges will demnd more longevity solutions Sources: Swiss Re Economic Reserch & Consulting; United Ntions Popultion Division 8 Regultory developments in Asi will continue to hve significnt impcts Higher minimum cpitl requirements Regultory uncertinty remins high Tightening of solvency regimes Adoption of RBC solvency systems Introduction of dynmic stress tests nd the use of scenrios Consolidtion is expected to ccelerte in some mrkets A driver for insurnce M&As Incresed focus on consumer protection (eg estblishment of policyholder protection funds) Impcts on insurnce portfolio nd sset mngement Increse demnd for reinsurnce Alignment of ccounting stndrds to IFRS Convergence of regionl regultions 9

6 Mrket ccess regimes sttus quo nd expected chnges Estblishment of subsidiries Estblishment of brnches Expected chnges Chin No restriction in non-life; JV only in life No restriction in non-life; JV only in life None (CIRC hs recently ffirmed JV only in the life sector) Indi JV only (26% mximum foreign shre) JV only (26% mximum foreign shre) The proposed mendments to Insurnce Lw to increse foreign investment ceiling to 49% nd to permit foreign reinsurers to setup brnches hs been pproved by the government nd were introduced in the upper house of prliment in December Finl pprovl is still pending. Indonesi JV only (no limit to foreign shre) JV only (no limit to foreign shre) None Mlysi No restriction No new brnch license t the moment Mlysi nnounced in April 2009 tht foreign equity prticiption thresholds in insurnce compnies nd tkful opertors will be incresed to mximum of 70%, from the current level of 49%. Thilnd Not llowed No new brnch license t the moment Plns to rise foreign shre to 49% from 25% but no timetble ws given Vietnm No restrictions (usully restricted to write non-domestic business) No restriction (usully restricted to write non-domestic business) Relxtion of foreign brnching in pursunt to WTO ccession commitments The other mrket (Austrli, Hong Kong, Jpn, Kore, the Philippines, Singpore nd Tiwn) hve no restriction on mrket ccess. Sources: Ntionl insurnce uthorities; Swiss Re Economic Reserch & Consulting. 10 Growth nd profitbility 11

7 Premium growth projection emerging Asin insurnce mrkets will continue to outperform Vietnm Non-life direct premium growth 11.2% 11.9% Vietnm Life direct premium growth 12.73% 13.51% Chin 9.2% 10.4% Indonesi 11.02% 11.12% Indi 9.2% 10.5% Indi 10.25% 10.50% Indonesi 7.3% 6.1% Chin 8.30% 9.01% Philippines 6.1% 6.5% Singpore 6.98% 6.74% Thilnd 6.0% 6.0% Thilnd 6.95% 7.06% Mlysi 5.3% 5.0% Philippines 6.22% 6.17% Kore 4.9% 5.7% Mlysi 6.21% 5.97% Singpore 4.7% 5.2% Hong Kong 5.48% 5.72% Hong Kong 4.3% 4.2% Austrli 5.48% 5.31% Tiwn 3.7% 3.5% Kore 3.85% 3.82% Austrli 3.4% 3.4% Tiwn 3.53% 3.52% Jpn 1.9% 2.0% Jpn 2.08% 2.12% 0% 4% 8% 12% 16% 0% 4% 8% 12% 16% Forecsts s of Jnury 2011 nd hs not tken into ccount impct of recent events in Jpn. Source: Swiss Re Economic Reserch & Consulting 12 Foreign mrket shre in different Asin mrkets Shre of foreign compnies in non-life insurnce, 2009 Shre of foreign compnies in life insurnce, 2009 Note: For Indi, ll joint ventures (JVs) with 26% mximum foreign shres re considered foreign compnies in this tble. Sources: Ntionl insurnce supervisory uthorities; Swiss Re Economic Reserch & Consulting. 13

8 L&H Underwriting profitbility of domestic primry insurers versus joint ventures nd foreign brnches Mrkets covered in L&H profitbility nlysis: Chin, Indi, Indonesi, Jpn, Kore, Tiwn Premium per life insurer 2009 (ll mrkets, men vlue, USDm) Net profit per life insurer verge (men vlue, USDm) % 0% -1% -2% -3% -4% -5% -6% Net profit mrgin of the medin life insurer verge (%) 0.02% -2% -5% P&C Mrkets covered: in P&C profitbility nlysis: Austrli, Chin, Hong Kong, Indi, Jpn, Kore, Indonesi, Mlysi, Singpore, Tiwn Premiums per non-life insurer 2009 (ll mrkets, men vlue, USDm) UW profit per P&C insurer verge (men vlue, USDm) % 6% 4% 2% 0% -2% -4% U/W profit mrgin of the medin non-life insurer verge (%) -0.3% 6% -2% Note. The chrts depicting premium per insurer 2009 cover the following mrkets: Austrli, Chin, Jpn, Indi, Kore, Hong Kong, Tiwn, Singpore, Indonesi, Mlysi, Thilnd, Philippines, Vietnm. Note. U/W profits re sttutory reported figures or equl to premiums less clims, com-missions nd internl expenses otherwise. U/W Profit mrgin equl to the U/W results divided by premiums. Sources: Ntionl insurnce uthorities; Swiss Re Economic Reserch & Consulting. 14 Net profit mrgin %, mrket verge Lrge life mrkets crried the bulk of life profits while smller mrkets showed helthy P&C underwriting results (GAAP bsis) 6% 5% 4% 3% 2% 1% Indonesi 212 Kore 1607 Life insurnce Chin 2823 Jpn % Tiwn -1% % Indi % Totl life mrket premiums, USD m U/W profit mrgin %, mrket verge (GAAP bsis) 10% Hong Kong 167 Austrli % Singpore 0% Indonesi Jpn Tiwn Mlysi % -10% -15% Non-life insurnce Kore -955 Chin Indi -20% Totl non-life mrket premiums, USD m Size of bubble represents reltive size of net profits/losses Size of bubble represents reltive size of underwriting profits/losses Note: P&C & L&H nlysis bsed on verge for selected mrkets where officil dt is vilble. U/W profits equl to premiums less clims, commissions nd internl expenses. U/W Profit mrgin equl to the U/W results divided by premiums. Sources: Ntionl insurnce uthorities; Swiss Re Economic Reserch & Consulting. 15

9 Questions & nswers 16 Corporte clendr & contcts Corporte clendr 15 April th Annul Generl Meeting Zurich 05 My 2011 First Qurter 2011 results Conference cll 04 August 2011 Second Qurter 2011 results Conference cll 03 November 2011 Third Qurter 2011 results Conference cll 09 December 2011 Investors' Dy Investor Reltions contcts Hotline E-mil Susn Hollidy Ross Wlker Chris Menth Simone Lieberherr Simone Fessler

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