Despite the disruption brought on by the coronavirus pandemic, insurers in the Asia-Pacific region have still achieved modest business and premium growth according to Moody’s vice president and senior analyst Soichiro Makimoto.
He also noted that the continued strong capitalisation of these insurers offsets their rising allocation to risky assets amid a low-interest rate environment at the same time.

“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 digitalisation,” he said.

While the pandemic has temporarily disrupted policy sales, insurers’ premium base is supported by long-duration existing policies and 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, said a new report from Moody’s.

Similarly, environmental, social and governance considerations are also increasingly affecting insurers’ investment and underwriting decisions, although exposure to legacy assets remains a drag.

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.

In its latest report, the rating agency noted an overall stable outlook for the Asia-Pacific insurance sector – which is underpinned by generally strong capitalisation, steady product margins and resilient premium growth.

Its outlook for the Asia-Pacific insurance sector reflects its expectations for fundamental business conditions for this sector over the next 12-18 months and does not reflect its outlook for individual issuers.

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