Assuming a close correlation of premium volume to GDP for the ASEAN non-life insurance markets, growth for these markets is expected to be 6.6 percentage points lower in 2020 than predicted before the COVID-19 pandemic.
So says the ASEAN Insurance Pulse published by Malaysian Re, which this year focuses on the impact of the COVID-19 pandemic on the region’s economies and its insurance markets.
It considers the views of the insurance executives operating in the region on how the pandemic shapes their markets, which actions regulators took during the crisis and how the virus will change the regions’ insurance industry.
According to the publication, the GDP of the 10 ASEAN markets is expected to decline by 2.4% and rebound by 5.8% in 2021 following the COVID-19 outbreak – compared to initial GDP growth projections of 3.4% in October 2019.
As a result, the region will miss out on more than $200bn of GDP growth for 2020 as compared to predictions from late 2019. Insurers operating in ASEAN will also forego non-life premiums of $2.3bn in 2020 compared to the predictions before the pandemic hit.
Commenting on findings from the publication, Malaysian Re President and CEO Zainudin Ishak said that ASEAN insurers made great efforts to cushion the impact from COVID-19 and the various lock-down measures implemented throughout the region.
“Jointly with the regulatory authorities, insurers and associations established a voluntary COVID-19 test fund, allowed for instalments or continued to provide protection while policyholders had to delay their premium payments. While this will benefit our industry’s overall perception, throughout the crisis, the ASEAN insurers demonstrated their resilience as balance sheets remained strong and insurers continued to serve their clients digitally while operating remotely,” he said.