Zhang Jie, Zhang Xinwen, Li Mingzhu, and Tang Shuheng also contributed to this article.
Review and Outlook of the Asian Insurance Industry from 2023 to Mid-2024
I. Review
In 2024, the global insurance market is in a complex environment full of challenges and opportunities. While the global economy is gradually recovering from the impact of the COVID-19 pandemic, the demand for insurance shows signs of recovery. However, economic uncertainty, geopolitical tensions and financial market volatility are also constraining the recovery process to some extent. According to the latest Sigma data from Swiss Re Institute, the global premium income in 2023 was USD7.19tn, up 6.1% YoY. Among all, life insurance premium accounted for 40.2%, and non-life insurance premium accounted for 59.8%. As in 2022, the non-life insurance premium growth remained the main driver of global premium growth in 2023, but the growth structure in 2023 was relatively more balanced compared with 2022. Life insurance premium contributed about 37% of the premium increase, and non-life insurance premium about 63%.
Source: Swiss Re.
Figure 1 Premium growth rate
While the USA has always dominated the global insurance market, the Asian insurance market plays an important role globally. Among the top 20 insurance markets in 2023, Asian countries and regions occupied 9 seats, with a market share of 21.6%.
Source: Swiss Re.
Figure 2 Global insurance market landscape
Based on the data of Swiss Re, the total premium income of Asia in 2023 was about USD1.76 trillion, accounting for 24.4% of the global premium income, up about 1.58% compared with the premium income of the region in 2022, of which the life insurance premium income was USD1.06 trillion, up 0.97% YoY, and the non-life insurance premium income was USD0.70tn, up 2.51% YoY. There was still a certain gap between the level of insurance development in Asia and the global level, among which, the development gap of the non-life insurance market was relatively large. The global insurance density was USD889/person, with insurance penetration rate of 7.0%, while the insurance density of the Asian insurance market was about USD224/person, with insurance penetration rate of about 5.32%. In terms of life insurance, the insurance density of the global life insurance market was USD361/person, with insurance penetration rate of 2.9%, while the insurance density of the Asian life insurance market was about USD135/person, with insurance penetration rate of 3.2%. In terms of non-life insurance, the insurance density of the global non-life insurance market was USD528/person, with insurance penetration rate of 4.2%, while the insurance density of the Asian non-life insurance market was about USD89/person, with insurance penetration rate of 2.1%.
From the perspective of the development of the Asian insurance market, the growth of premium income in developed Asian insurance markets was relatively weak, mainly affected by the contraction of the life insurance market in some countries and regions in the region. Among them, the life insurance premium in South Korea, Singapore and Taiwan, China declined significantly. Compared with the developed insurance markets in Asia, the emerging insurance markets in Asia as a whole improved significantly compared with 2022. Among others, the non-life insurance premium in some insurance markets in West Asia and South Asia, represented by India, Turkey, Saudi Arabia, the UAE, etc., showed a rapid growth momentum. Although the insurance penetration rate of emerging insurance markets in Asia is still low, the insurance industry in the region has great potential for development, and the premium income shows a strong growth momentum.
1. Chinese Mainland (excluding Hong Kong, Macao and Taiwan regions): relatively faster growing life insurance sector
Chinese Mainland is the second largest insurance market globally, second only to the USA. In 2023, the premium income in Chinese Mainland reached USD72.4bn, accounting for about 10% of the global insurance market. The growth rate of China’s insurance market is relatively high. Although the growth rate in 2023 was 3.7%, slightly lower than that in previous years, it still maintained positive growth. The potential of the insurance market in Chinese Mainland is still huge. In 2023, the GDP growth rate of Chinese Mainland was 5.2%, maintaining a steady level of development. In addition, Chinese Mainland has a huge population base, which provides a broad potential customer base for the insurance market. With the aging of the population and the expansion of the middle class group, the demand for health insurance, endowment insurance and long-term care insurance is also growing. However, the insurance industry in Chinese Mainland is also facing many risks in its development, including the rise in investment risk, the weakening of solvency, the impact of pricing rate cuts on premium growth, changes in regulatory policies, and the impact of capital market fluctuations on investment returns.
In terms of premium income, the life insurance sector in Chinese Mainland reported a premium income of USD390.4bn in 2023, up 7.1% from 2022, mainly benefiting from strong sales of savings products and the impact of regulatory changes. The premium income of non-life insurance sector in Chinese Mainland was USD333.3bn in 2023, down 0.1% YoY. Regardless of exchange rate factors, the premium income denominated in RMB increased by 5.2%, but it was still lower than the average growth rate of 10.8% from 2013 to 2022, indicating a certain slowdown in growth. However, the demand for auto insurance and agricultural insurance in the Chinese Mainland insurance market remains strong, with the growth of auto insurance demand benefiting from the rapid development of the electric vehicle industry. In addition, the Chinese Mainland government has further promoted the popularization of agricultural insurance through financial support policies. The insurance density (i.e., the per capita premium) in Chinese Mainland in 2023 was USD508, up from USD489 in 2022. The insurance penetration rate (i.e., the ratio of premium to GDP) in Chinese Mainland in 2023 was 3.9%, the same as that in 2022.
In terms of profitability, since 2023, the net profit of insurers in Chinese Mainland has declined YoY, and many insurers have reported loss. As at April 30, 2024, according to the disclosed annual reports, 71 insurers reported loss and 162 insurers reported profit. On the one hand, it is mainly affected by changes in the macroeconomic environment and fluctuations in the capital market. On the other hand, with the implementation of new accounting standards such as IFRS 9 and IFRS 17, the switch between the old and new standards has increased the volatility of investment income and profits of insurers.
In terms of regulatory policies, the insurance industry in Chinese Mainland continued to maintain a trend of strict regulation in 2023, which was reflected in the continuous promotion of the industry’s return to the source of protection, strengthening risk management, optimizing product pricing, improving the transparency of information disclosure and other aspects. Since 2023, the solvency level of insurers has decreased compared with the previous year. As at the end of 4Q2023, the comprehensive solvency adequacy ratio and core solvency adequacy ratio of the insurance industry were 197.1% and 128.2% respectively, both higher than the standards of 100% and 50%. In particular, the comprehensive solvency adequacy ratios of property insurance companies, personal insurance companies and reinsurance companies were 238.2%, 186.7% and 285.3% respectively. However, there were also some small and medium-sized personal insurance and property insurance companies with substandard solvency.
Source: National Bureau of Statistics, Swiss Re.
Figure 3 Chinese Mainland population and GDP growth rate
Source: National Bureau of Statistics, Swiss Re.
Figure 4 Chinese Mainland insurance premium income
2. Hong Kong, Macao and Taiwan regions of China
2.1 Hong Kong: growing new businesses
In 2023, Hong Kong, China’s insurance industry showed signs of recovery, with total premium income ranking 16th in the global insurance market. Among others, although the total premium of long-term businesses (life insurance) declined, new business premium increased significantly, especially the rapid growth of brokerage channels and regular premium payments, indicating higher value contribution. With its advantages of USD insurance policies, high yield, flexible product design and perfect legal system, Hong Kong, China insurance has become an important choice for medium and high net worth clients in Chinese Mainland to allocate overseas assets and avoid exchange rate risks. Products such as participating savings insurance attracted a large number of visitors from the Chinese Mainland due to their strong competitiveness, and their new policy premiums increased significantly YoY, accounting for 33% of the new policy premiums in Hong Kong, China, becoming an important driving force for market growth. Although the underwriting profit of general businesses (property & casualty insurance) decreased YoY due to the increase in claim ratio caused by the recovery of economic activities after the pandemic, the overall market recovery trend was obvious. In addition, Hong Kong, China’s insurance industry has also actively responded to market changes, such as the implementation of the GN16 to strengthen the disclosure and transparency of dividend realization rate, and the introduction of more products to improve short-term cash value, further enhancing the competitiveness and attractiveness of the industry.
However, the development of the industry is also facing risks and challenges. If the recovery of premium income from visitors from Chinese Mainland is weaker than expected, it may adversely affect the performance of insurers. In addition, if the volatility of the capital market is greater than expected, it may lead to a decline in investment income, affecting the competitiveness of participating savings products and business performance. Therefore, although the market has shown vitality and growth potential, it is also necessary to be alert to potential risk factors such as market volatility and policy changes.
In terms of GDP, Hong Kong, China’s GDP in 2023 was USD382.1bn, achieving a substantial growth of 3.2%, and the GDP growth rate in 2022 was -3.6%. In terms of population, Hong Kong, China’s population was 7.53 million at the end of 2023, an increase of more than 50,000 over the previous year. In terms of premium income, Hong Kong, China’s total premium income in 2023 was USD65.7bn, down 1.2% from USD66.5bn in 2022. Among others, the nominal growth rate of life insurance premium income was -1.9%, and that of non-life insurance premium income was 3.5%. The insurance density was USD8,769 in 2023, down from USD9,159 in 2022. The insurance penetration rate was 17.2% in 2023, a slight decrease from 19.0% in 2022. The insurance penetration and density in Hong Kong, China are very high and comparable to many developed economies, thanks to the high insurance awareness of local residents. The demand of local residents for both life insurance and non-life insurance is growing. As at March 31, 2024, there were 160 authorized insurers in Hong Kong, China, of which 87 were operating general businesses, 53 were operating long-term businesses, 18 were operating comprehensive businesses and 2 were operating special purpose businesses.
Source: Hong Kong, China Census and Statistics Department, Swiss Re.
Figure 5 Hong Kong population and GDP growth rate
Source: Hong Kong, China Census and Statistics Department, Swiss Re.
Figure 6 Hong Kong insurance premium income
2.2 Macao: increasing economic contribution year by year
Although Macao’s insurance market is relatively small compared with international financial centers such as Hong Kong, China, it still has a certain influence in the region. In 2023, Macao, China reported significant economic growth, with an annual GDP growth rate of 80.5%, thanks to the lifting of the pandemic control and the recovery of visitor flow to Macao, China. At the end of 2023, Macao, China’s total population was 683,700, with an annual growth rate of 1.6%. Macao, China’s total premium income in 2023 was lower than that in 2022. According to the data released by AMCM, Macao, China’s gross premium of life insurance in 2023 was MOP34.214bn, MOP1.442bn less than that in 2022, down 4.04% YoY. Among all, the gross premium of individual life insurance decreased by MOP400mn, and that of group life insurance decreased by MOP1.042bn, mainly due to the decrease of MOP1.043bn in the gross premium of group sickness insurance; Macao, China’s gross premium of non-life insurance in 2023 was MOP2.848bn, up 9.6% from 2022. The contribution of the insurance industry to the economy of Macao, China has increased year by year, with an overall insurance penetration rate of 9.77%, providing support for its economic growth and employment. The overall insurance density was MOP54,207.33, reflecting the higher insurance purchasing power in Macao, China.
Source: AMCM, Swiss Re.
Figure 7 Macao population and GDP growth rate
Source: AMCM, Swiss Re.
Figure 8 Macao insurance premium income
2.3 Taiwan: facing greater challenges
Taiwan’s insurance market is mature and competitive, and its premium income scale ranks 14th in the global insurance market, accounting for 1.1% of the market share. Since 2012, the total premium income of Taiwan’s insurance industry has continued to grow steadily, but it experienced negative growth for the first time in 2019, with growth rate of life insurance premium income declining significantly, showing a clear downward trend in recent years. The market environment of long-term low interest rate, the demographic transformation caused by aging and fewer children, and the implementation of IFRS 17 have all posed severe challenges to Taiwan’s personal insurance sector, resulting in a comprehensive decline in premium income, assets scale and net profits. At the same time, although property insurers suffered from the impact of pandemic-related insurance claims, resulting in initial losses, they are expected to maintain stable growth in the future thanks to the timely increase in premiums.
In terms of GDP, Taiwan’s GDP reported a growth of 1.3% in 2023, and the GDP growth rate declined for three consecutive years. At the end of December 2023, Taiwan’s population was 23.42 million, an increase of 150,000 over the end of 2022, ending the negative population growth since 2020. In terms of premium income, Taiwan’s life insurance premium income in 2023 was USD53.965bn, down 12.9% from 2022. Non-life insurance premium income was USD24.121bn, up 1.4% from 2022. The insurance density was USD3,307 in 2023, down from USD3,662 in 2022. The insurance penetration rate was 10.3% in 2023, a slight decrease from 11.4% in 2022.
Source: Swiss Re.
Figure 9 Taiwan population and GDP growth rate
Figure 10 Taiwan insurance premium income
3. Japan and South Korea market
3.1 Japan: growing non-life insurance sector
Japan is one of the important players in the global insurance market. In 2023, Japan’s total premium was USD362.7bn, accounting for 5.0% of the global insurance market, ranking the fourth largest insurance market in the world. On the one hand, Japan’s non-life insurance companies have strong profitability in domestic underwriting business, due to the continuous rise in non-life insurance premium rates, which has been strengthened by oligopoly. Premium rates for non-life insurance are likely to continue to rise in response to underwriting loss caused by disasters, which will boost insurers’ performance in the medium term. On the other hand, after many “lost years”, the profitability of Japan’s life insurance business improved in 2023 due to the improvement in underwriting performance caused by the increase in mortality and morbidity rates, and the weakening impact of claims caused by the COVID-19 pandemic. In addition, as interest rates rise and new bonds with higher yields replace maturing bonds with lower yields, investment performance should improve. However, due to Japan’s aging population and economic factors, fixed-term and savings products are not popular among the elderly population, and Japanese life insurance companies will face a series of severe challenges in the next five years.
In terms of GDP, Japan’s GDP reported a growth of 1.9% in 2023, up from 0.9% in 2022. As at January 1, 2024, Japan’s total population was 125 million, a decrease of about 530,000 from the previous year. After peaking at 128 million in 2008, Japan’s population has begun to age rapidly, and this demographic structure is a major challenge for the Japanese life insurance industry. In terms of premium income, Japan’s life insurance premium income in 2023 was USD272.2bn, up 2.3% from 2022; non-life insurance premium income was USD85.5bn, down 4.4% from 2022. The insurance density was USD2,938 in 2023, up from USD2,690 in 2022. The insurance penetration rate was 8.9% in 2023, up from 8.2% in 2022.
Source: Swiss Re.
Figure 11 Japan population and GDP growth rate
Source: Swiss Re.
Figure 12 Japan insurance premium income
3.2 South Korea: high market concentration rate
South Korean insurance market is one of the major insurance markets in Asia. In 2023, its premium income was USD185.9bn, accounting for 2.6% of the global insurance market share and ranking 7th in the world. Both the life insurance market and the non-life insurance market in South Korea were showing an oligopoly pattern, with most of the leading insurers backed by consortia, showing a high market concentration rate. First of all, the slowdown of the global economy has had a negative impact on the insurance market, and the development of the insurance market in Asian countries is facing resistance, which has had a certain impact on the Korean life insurance market. Furthermore, the adoption of IFRS 17 accounting standards in South Korea may have a greater impact on long-term insurance, while the impact on traditional non-life insurance policies is less, which may lead to the adjustment of life insurance business structure, thereby affecting the premium income.
In terms of GDP, South Korea’s GDP growth rate was 1.3% in 2023, declining for three consecutive years. Its total population in 2023 was 52 million. Despite the continuous decline in population due to low birth rate and aging trends, the total population increased for the first time in three years due to a large increase in the foreign population. However, one of the biggest challenges South Korea will face is its declining population, which is expected to decline by 13.7% by 2060, according to Statistics Korea. A shrinking population naturally means a shrinking customer base. In terms of premium income, South Korea’s life insurance premium income in 2023 was USD84.4bn, down 10.8% from 2022; non-life insurance premium income was USD101.6bn, up 4.4% from 2022. Due to the improvement in underwriting performance and the increase in premium rates, the profitability of non-life insurance companies also increased moderately. The insurance density was USD3,603 in 2023, up from USD3,541 in 2022. The insurance penetration rate was 11% in 2023, the same as that in 2022.
Source: Swiss Re.
Figure 13 South Korea population and GDP growth rate
Source: Swiss Re.
Figure 14 South Korea insurance premium income
4. ASEAN market
The Association of Southeast Asian Nations (ASEAN) currently has 11 member countries: Indonesia, Malaysia, the Philippines, Thailand, Singapore, Brunei, Vietnam, Laos, Myanmar, Cambodia, and Timor-Leste. ASEAN countries achieved steady economic growth in 2023, showing strong resilience and growth potential. The International Monetary Fund predicted that ASEAN’s economic growth rate would be 4.7% in 2023, while the Asian Development Bank predicts that ASEAN’s economy will grow by 5% in 2024. ASEAN countries have actively explored opportunities for cooperation with China through measures such as introducing economic stimulus policies, promoting digital transformation and strengthening regional connectivity, and will usher in more development opportunities in the future. The insurance market in the region as a whole is characterized by rapid premium growth, high growth potential, and large country differences. Singapore has a developed economy, a mature and huge insurance market, and a regulatory system in line with international standards; the insurance markets of other countries in the region are at different stages of development. In view of the great potential of economic development, the continuous growth of residents’ disposable income, the expansion of the middle class group, and the increasing insurance awareness of residents, the insurance market in Southeast Asia has great growth potential in the future.
Source: Swiss Re.
Figure 15 ASEAN population
Source: Swiss Re.
Figure 16 ASEAN insurance premium income
4.1 Singapore: highly competitive market
Singapore’s population and GDP have remained stable in recent years. At the end of 2023, its total population was 5.9177 million, up 4.98% YoY; in terms of GDP, Singapore’s GDP in 2023 was USD501.4bn, up 0.59% YoY, and Singapore’s GDP in 2022 increased by 14.83% YoY. In terms of the insurance industry, Singapore is widely regarded as the insurance hub and global leader in the Asia-Pacific region, with a highly competitive insurance market. The agency that regulates commercial insurance business in Singapore is the Monetary Authority of Singapore (MAS), and entities wishing to underwrite commercial insurance business in Singapore and/or solicit commercial insurance business from the Singapore public must obtain a license or authorization from the MAS. In addition, the General Insurance Association (GIA) regulates commercial insurers and intermediaries by issuing internal codes of conduct and guidelines. Singapore offers a wide range of insurance products, and has a mature and well-regulated insurance industry system, with many well-known insurers from all over the world having branches there.
In the past few years, Singapore’s total premium income remained at a relatively high level. From 2021 to 2023, it was respectively SGD60.745bn, SGD61.426bn and SGD57.965bn. Among them, due to the impact of COVID-19, the life insurance premium income in 2021 was SGD46.543bn, a record new high. In terms of insurance density, the per capita premium in Singapore in 2023 was USD7,799, up 3.12% YoY; in terms of insurance penetration rate, the proportion of premiums to GDP in Singapore in 2023 was 9.2%, which was the same as that in 2022.
4.2 Thailand: well developed health insurance sector
Thailand’s population has shown a slight increase in recent years. At the end of 2023, it was 71.8013 million, up 0.15% YoY; in terms of GDP, Thailand’s GDP in 2023 was USD514.9bn, up 3.89% YoY. In terms of the insurance industry, as of June 2023, there were more than 70 insurers in Thailand. A 2022 survey found that health insurance was the most popular among insured respondents in Thailand, while about 40% of Thais surveyed did not have any insurance products. Taking this into account, the total contribution of premiums to Thailand’s GDP was about 5%. The Thai insurance market regulator OIC (Office of Insurance Commission) was established in 2007 to regulate the industry to ensure compliance and consumer protection. Thai law divides the insurance industry into life and non-life sectors. Life insurance provides financial protection related to life, such as death and/or disability. These policies may also offer a savings or investment component. In this sector, large players include domestic and foreign insurers. The non-life insurance sector includes various types of insurance to provide additional protection, such as automobile, health, marine and logistics, and fire insurance.
From 2021 to 2023, Thailand’s total premium income was respectively THB876.64bn, THB885.333bn and THB918.067bn, showing a slight upward trend. In terms of insurance density, the per capita premium in Thailand in 2023 was USD348, up 57.38% YoY; in terms of insurance penetration rate, the proportion of premiums to GDP in Thailand in 2023 was 5.3%, which was the same as that in 2022.
4.3 Vietnam: significantly growing insurance market
Vietnam’s population has shown a slight increase in recent years. At the end of 2023, it was 98.859 million, up 0.68% YoY; in terms of GDP, Vietnam’s GDP in 2023 was USD429.7bn, up 4.73% YoY. In terms of the insurance industry, Vietnam’s insurance market has grown significantly in recent years with the rapid development of the country’s economy. Before the 1990s, the non-life insurance business in this field was monopolized only by Bao Viet, a state-owned insurance company. It was not until 1995 that life insurance first appeared in Vietnam. Due to Vietnam’s aging population and rising disposable income, there is a growing interest in healthcare and insurance products. As a result, both the life insurance sector and non-life counterparts have seen rapid increases in the value of premiums in recent years. From a monopolistic market with only one player in the 1990s, Vietnam became a highly competitive market in 2022 with more than 80 insurers, including life and non-life insurers, insurance brokers and specialized reinsurance companies. The total premium value of non-life insurance sector reached nearly VND700bn, three times the record value at the beginning of the previous decade, with health insurance and auto insurance being the leading categories in this field. PVI overtook Bao Viet to hold the largest share of the non-life insurance market in 2022, and other Vietnamese insurance brands, such as PTI, Bao Minh and MIC, have also gained a foothold in Vietnam. Despite being introduced to Vietnam later than non-life insurance, life insurance in Vietnam has shown impressive growth in premium value over the past decade, surpassing the size of non-life insurance sector in 2022. Bao Viet, Manulife of Canada and Prudential of the UK have been taking turns to be the leading life insurers in Vietnam, together accounting for more than half of the market share. More foreign insurers have also entered Vietnam, and the market competition is very fierce.
From 2021 to 2023, Vietnam’s total premium income was respectively USD11.286bn, USD10.649bn and USD9.447bn, showing a downward trend. In terms of insurance density, the per capita premium in Vietnam in 2023 was USD100, up 44.93% YoY; in terms of insurance penetration rate, the proportion of premiums to GDP in Vietnam in 2023 was 2.3%, which was the same as that in 2022.
4.4 Indonesia: slightly slowed growth
Indonesia’s population has shown a slight increase in recent years. At the end of 2023, it was 278 million, up 0.74% YoY; in terms of GDP, Indonesia’s GDP in 2023 was USD1,371.171bn, up 3.95% YoY. In terms of the insurance industry, the Indonesian insurance market has grown significantly since the recovery from the economic crisis in 1998 and has demonstrated its resilience to the challenges posed by the COVID-19 pandemic. Despite a slight slowdown in growth, it still made a steady contribution to GDP. The market is regulated by Otoritas Jasa Keuangan (OJK) and comprises 151 insurers, of which 78 specialise in non-life insurance, 60 in life insurance and 8 in reinsurance. However, the penetration rate of financial literacy of less than 50% hinders the deeper penetration of various types of insurance. In addition, there is still a need to build trust and inclusiveness, and there is huge untapped potential in Indonesia’s large Gen Z and Millennial population. Indonesia’s insurance industry presents a vibrant scene and has strong growth potential due to rising income levels and a growing middle class group. However, in fact, Indonesia’s insurance penetration rate is still low, which is at a low level among ASEAN countries.
From 2021 to 2023, Indonesia’s total premium income was respectively USD18.870bn, USD18.574bn and USD18.353bn, showing a downward trend. In terms of insurance density, the per capita premium in Indonesia in 2023 was USD66, up 46.67% YoY; in terms of insurance penetration rate, the proportion of premiums to GDP in Indonesia in 2023 was 1.3%, down 0.1 percentage points from 2022.
4.5 Malaysia: low insurance penetration rate
Malaysia’s population has shown a slight increase in recent years. At the end of 2023, it was 34.3085 million, up 1.09% YoY; in terms of GDP, Malaysia’s GDP in 2023 was USD399.649bn, down 1.81% YoY. In terms of the insurance industry, only about half of the surveyed Malaysians had life insurance and medical insurance in 2023. Despite the low penetration rate, the insurance industry still contributed more than RM27bn to GDP. The insurance industry in Malaysia is divided into life insurance sector and non-life insurance sector, and the latter is also known as general insurance. The non-life insurance field involves different insurance categories, including medical or health insurance, auto insurance, fire insurance, liability insurance, personal accident insurance and others. Medical and auto insurance policies are the most widely purchased ones in the country. In addition to traditional insurances, takaf (Islamic insurance) is also popular among the majority Muslim population.
From 2021 to 2023, Malaysia’s total premium income was respectively USD19.977bn, USD20.115bn and USD20.237bn, showing an upward trend. In terms of insurance density, the per capita premium in Vietnam in 2023 was USD590, down USD2 YoY; in terms of insurance penetration rate, the proportion of premiums to GDP in Malaysia in 2023 was 5.2%, up 0.2 percentage points from 2022.
4.6 The Philippines: expected to grow in the future
The Philippines’ population has shown a slight increase in recent years. At the end of 2023, it was 117 million, up 1.54% YoY; the Philippines’ GDP in 2023 was USD437.146bn, up 8.11% YoY. The insurance market in the Philippines is underdeveloped, with a penetration rate of less than 2%. However, Philippines’ insurance industry is expected to grow in the next few years, thanks to the growing middle class group and rising disposable income. In 2023, the total premium generated in the insurance market was about PHP390bn, an increase of 72% from 2016. However, the industry still faces the challenge of a lack of insurance awareness among the public and the burden of insurance costs on residents’ expenditure. The Philippines’ insurance categories cover plans from life to non-life, prepaid insurance, and micro and macro insurance. Among them, life insurance has a higher insurance density in the Philippines. In 2020, the number of newly insured Filipinos surged, and reached a peak of about 27 million in 2022. In terms of premium income and total assets, Sun Life Insurance (Philippines) is the leading life insurer in the Philippines, followed by Prudential Life Insurance (UK) and AIA Life Philippines. The non-life insurance sector also showed gradual growth in its gross premiums, except for a slight decline in 2020. In 2021, fire insurance had the highest gross premium, reaching about PHP37bn, followed by auto insurance. In 2023, Pioneer Insurance & Guarantee and Malayan Insurance were the leading companies in the non-life insurance sector in terms of gross premiums. Since obtaining insurance coverage can mean additional expenses, Filipinos of low-income families may turn to cheaper insurance products known as “micro-insurance.” Most of the “micro-insurance” policies in the Philippines are underwritten by the Mutual Benefit Association (MBA). The payment of sick leave benefits and the provision of financial support during the unemployment period of MBA members are two of the MBA regulations.
From 2021 to 2023, the Philippines’ total premium income was respectively USD8.261bn, USD7.656bn and USD7.758bn, fluctuating slightly. In terms of insurance density, the per capita premium in Vietnam in 2023 was USD66, down USD1 YoY; in terms of insurance penetration rate, the proportion of premiums to GDP in the Philippines in 2023 was 1.8%, down 0.1 percentage points from 2022.
5. South Asian market: great differences in the development of different regions
South Asian countries include India, Pakistan, Bangladesh, Sri Lanka, Maldives, Bhutan and Nepal. South Asian countries have large differences in development and a large population base. South Asia has a population of about 1.9 billion, with India and Pakistan being the two largest countries.
India is the tenth largest life insurance market in the world, the fourth largest general insurance market in Asia, and the 14th largest insurance market in the world. Deloitte predicts that the Indian insurance market will quadruple in size over the next decade. The Indian insurance industry has seen impressive progress over the past two decades, driven by increased private sector involvement and increased distribution capabilities, as well as significant improvements in operational efficiency. Significant government initiatives, strong democratic factors, favorable regulatory environment, growing partnerships, product innovation and vibrant distribution channels have all supported the growth of the insurance market. Insurers in India can now launch new health insurance products without the approval of the Insurance Regulatory and Development Authority of India (IRDAI). Earlier, group insurance products enjoyed this flexibility, but now retail products are also benefiting from the new regulations. The insurance industry is expected to take advantage of this opportunity to launch customized and innovative products to expand the choice of policyholders to meet the dynamic needs of the market, which will further help to increase insurance penetration rate in India. The history of the Indian insurance industry can be traced back to the pre-independence era, with the establishment of Orient Life Insurance in the early 19th century. After independence, insurers were nationalized and it was only after liberalization measures in 1991 that the industry was opened to private participants. At present, the gross premium value collected by life insurers is close to over INR7tn, with both the insurance penetration rate and density showing an upward trend. However, India’s insurance penetration rate is much lower compared with the global average, leaving plenty of room for growth.
From 2021 to 2023, India’s total premium income was respectively USD99.503bn, USD129.765bn and USD135.958bn, showing an upward trend. In terms of insurance density, the per capita premium in India in 2023 was USD95, up USD3 YoY; in terms of insurance penetration rate, the proportion of premiums to GDP in India in 2023 was 3.7%, down 0.3 percentage points from 2022.
Pakistan is the second largest insurance market in South Asia, with a limited overall scale. Pakistan’s insurance market is also dominated by state-owned enterprises, with 35-40 private companies. The competition there is fierce, with new entrants and foreign-funded companies gradually expanding their market share. From the perspective of the insurance market, the market growth has been driven by factors such as economic recovery, infrastructure construction and improved consumer confidence, but it has also been adversely affected by high inflation and large fluctuations in exchange rates. The main sectors of the insurance industry in Pakistan are life insurance and general insurance. In 2022, life insurance accounted for the highest share in the insurance industry in Pakistan, with an annual growth rate of more than 28%. The growth in this field can be attributed to the increased awareness of the benefits of life insurance during the COVID-19 pandemic. To this end, several insurers partnered with banks, such as Jubilee Life and Habib Metro Bank, to promote the development of bancassurance channels and thus promote the acceptance of life insurance. In addition, the general insurance sector grew at an annual rate of more than 25% in 2022, mainly attributed to the increased acceptance of property insurance due to the floods that affected the country throughout the year. Key companies in Pakistan’s insurance industry include State Life Insurance Corporation (SLIC), Jubilee, EFU, Adamjee, Pak Qatar, United Insurance Pakistan, UBL, East-West Insurance, Atlas, Security General and Askari General. In 2022, SLIC was the largest insurer in Pakistan, accounting for more than 47% of the industry’s total premium income, followed by Jubilee Life and EFU Life.
From 2021 to 2023, Pakistan’s total premium income was respectively USD2.721bn, USD2.826bn and USD2.566bn, showing an upward trend. In terms of insurance density, the per capita premium in Pakistan in 2023 was USD11, down USD1 YoY; in terms of insurance penetration rate, the proportion of premiums to GDP in Pakistan in 2023 was 0.7%, down 0.1 percentage points from 2022.
6. West Asia market: relatively well developed non-life insurance market
The West Asia region consists of 20 countries/territories, including Saudi Arabia, Turkey, Israel, the UAE, Iran, Iraq, and Qatar. According to the latest Sigma data from Swiss Re, it can be seen that the premium income in West Asia mainly comes from Israel, Turkey, Saudi Arabia, the UAE, etc. In 2023, the premium income of the top four insurance markets in West Asia totaled USD72.5bn, accounting for 90%. Of which, the non-life insurance premium income was USD64.1bn, far exceeding the life insurance premium income. This is related to the level of economic development, market demand, cultural factors and the development stage of the insurance industry in West Asia. Some of these countries, such as the UAE and Saudi Arabia, have relatively stable political situation and relatively developed economies, which has promoted the development of the property insurance market. In other West Asian countries, such as Yemen and Lebanon, the insurance market may still be developing, and the popularity of insurance products and services, the purchasing power of residents and the penetration rate of the insurance market still need to be improved.
Saudi Arabia’s insurance market is the second largest in the Gulf region (after the UAE in terms of gross premium), providing a dynamic and competitive environment. The growth in recent years has been attributed to economic development creating new insurable assets, as well as new mandatory insurance regulations. Saudi Arabia has 29 insurance companies, Islamic insurance providers and reinsurance companies, as well as 179 brokers and other service providers. The growth of premium rate in Saudi Arabia has been somewhat erratic, with new insurance business not keeping up with the country’s growing GDP. In addition to the influence of the COVID-19 pandemic on economy, insurers have faced volatile oil prices, intense competition, and constrained fiscal and business spending in recent years. However, population growth and the diversification of the country’s economic structure are key factors driving the development of the Saudi insurance market. Due to industrialization and increased employment opportunities, expatriates from all over the world are migrating to the country, which will promote the secular growth of the insurance industry in the future.
Source: Swiss Re.
Figure 17 GDP of West Asian countries
Source: Swiss Re.
Figure 18 Premium Income of West Asian countries in 2023
7. Central Asian market: a large gap in the insurance market
Central Asia usually refers to the five former Soviet republics of Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Turkmenistan. Among them, Kazakhstan and Uzbekistan have relatively high GDP, but Uzbekistan’s per capita GDP is low due to its large population. The insurance market of Central Asian countries is small and the insurance gap is large, which has certain development potential.
Kazakhstan, as the country with the highest GDP in Central Asia, has the largest insurance market. According to the Allianz report, Kazakhstan’s total premium income in 2023 was EUR1.9bn. Of which, the premium income of property insurance was EUR1.1bn, that of life insurance was EUR700mn, and that of health insurance was EUR100mn. In 2023, its insurance density was EUR98 and insurance penetration rate was 0.9%. Kazakhstan’s insurance industry is expected to continue to grow strongly. Due to the economic growth and diversification of the country, the number of middle-class families is increasing. The growing middle class group is expected to boost demand for investment-linked products in the property and auto insurance and life insurance markets. Although downside risks may remain due to the close trade ties between Kazakhstan and Russia, Kazakhstan’s economy is expected to benefit in the future from the integration into China’s Belt and Road Initiative, as well as higher oil and gas revenues, which will bring a broad positive growth environment for the country’s insurance industry.
Source: World Bank.
Figure 19 GDP of Central Asian countries (USD 100mn)
Source: World Bank.
Figure 20 Population of Central Asian countries
II. Outlook
With the changes in the global economic environment, the acceleration of technological innovation and the changes in social structure, as an important part of the global insurance industry, the Asian insurance market is facing not only broad development prospects, but also a series of complex risks and challenges in the future development.
1. Challenges faced by the Asian insurance market
Economic growth in emerging markets will drive insurance demand. The secular economic growth in Asia, especially in emerging markets such as China and India, and the expansion of middle class group have increased the demand for insurance products. With the improvement of residents’ income level and the enhancement of risk awareness, insurance has become an important part of family financial planning. This trend will drive the continuous expansion of the Asian insurance market and the steady growth of premium income.
However, the uncertainty of the global economic environment will be one of the important challenges facing the Asian insurance market. Factors such as slowing global economic growth, intensified trade disputes and geopolitical tensions may have an impact on the Asian insurance market. In particular, geopolitical risks will increase the investment risk of insurers and may force insurers to readjust their strategies to adapt to the increasingly complex market landscape, which will hinder the growth of the Asian insurance market. According to KPMG’s survey of insurance CEOs in 11 global markets in 2023, the proportion of insurance CEOs who believed that the biggest threat to the future of the insurance industry was “political uncertainty” increased significantly from 2022 and jumped to the first place. Moreover, many of the current global risks summarized by the World Economic Forum are related to geopolitical risks, which will increase the uncertainty of the economic environment.
The low interest rate environment is another major challenge for insurers in Asia. In the low interest rate environment, the investment income of insurers is compressed, which makes it difficult to cover the cost of liabilities, resulting in the expansion of spread losses. To cope with the low interest rate environment, insurers need to adjust their investment strategies and increase the allocation of high-risk assets, which may increase investment risks. Therefore, how to maintain profitability in a low interest rate environment will become an important issue for Asian insurers to address. In the low interest rate environment, consumers may pay more attention to the protection function of insurance and look for insurance products that can provide stable income, which may lead to a decrease in the demand for traditional savings insurance products and an increase in the demand for insurance products with investment components, thus promoting an increase in the corresponding premium scale.
2. Development opportunities of the Asian insurance market
The degree of population aging in many countries and regions in Asia, such as China, India, Japan and Singapore, is expanding. Although the purchasing power and scale of insurance products of the elderly population will decline with age, the aging trend has increased the expectations of young and middle-aged people for longer life, which provides a broad space for the development of insurance products such as endowment insurance and health insurance. In addition, with the increasing proportion of the elderly population, the elderly care industry and the insurance industry are expected to accelerate the deep integration. The transformation from single risk protection to a full life cycle health management service for the elderly not only meets the growing diversified needs of the elderly, but also opens up a broad development space for insurance companies. In recent years, the frequent occurrence of natural disasters and epidemic diseases, changes in family structure and rising dependency ratio have also made the younger generation tend to transfer risks and plan for the future by configuring insurance products, which has improved the overall anti-risk ability of families, ushering in more potential growth force to the insurance market.
In addition, with the rapid development of big data, AI, block chain and other technologies and the impact of the previous pandemic, the insurance industry is experiencing unprecedented changes. Technological innovation has not only improved the pricing accuracy and risk management capabilities of insurance products, but also optimized the customer experience and service processes. The Asian insurance market is actively embracing technological innovation, using scientific and technological means to improve business efficiency and competitiveness, and achieve high-quality development. In particular, the Southeast Asian insurance market is driven by both digital transformation and economic expansion, showing a diversified development trend and a rapid expansion momentum. For example, insurance innovation technology companies in Singapore have a wide range of digital applications; some insurance technology companies in Malaysia, Thailand and Vietnam have achieved price comparison between insurance and financial products; some insurance technology companies in Thailand can handle a series of processes from underwriting to policy issuance. The innovation of insurance technology provides opportunities for the development of channel business such as online sales and scenario-based sales in markets with low insurance penetration rate. However, technological innovation has brought some challenges as well as opportunities to the insurance market. On the one hand, technological innovation requires insurers to continuously invest in technology research and development and talent training; on the other hand, technological innovation may also disrupt traditional business models, requiring insurers to carry out business transformation and upgrading.
The policy support and regulatory environment optimization of the Asian insurance market will also be conducive to its long-term stable development. Asian governments generally attach great importance to the development of the insurance industry, and have introduced a series of supporting policies in recent years to provide a strong guarantee for the healthy development of the insurance market. Regulatory authorities are also constantly improving the regulatory system to strengthen market supervision and protect the rights and interests of consumers. Chinese regulators have broadened the range of investable financial products, guided insurance asset management companies to increase their support for the capital market, and promoted the high-quality development of the insurance asset management industry; the Monetary Authority of Singapore released the Financial Service ITM 2025, which aims to promote the digitalization of financial infrastructure, support the transformation of Asian market to net zero, and build a future-oriented financial network; Indian regulators have launched a unified digital insurance platform and formulated rules to encourage product innovation; the Securities and Exchange Commission of Pakistan has formulated a five-year strategic plan for the insurance industry, with the goal of increasing the number of its insured people from about 8 million in 2023 to about 15 million by 2028, and the total premium reaching PKR1.3tn (USD4.6bn) by then.
3. Conclusion
To sum up, even in the face of a series of challenges brought by changes in the economic and financial environment and changes in the insurance market environment, the huge insurance consumer base, rising insurance awareness, rapidly changing insurance technology and improving financial regulatory environment in the Asian market will provide broad market space and development potential for the development of the regional insurance industry, especially in emerging insurance markets.
【This article is AFCA Working Paper No. 2025-06/197】
Expert Biography
John Zheng, Fellow of Asian Financial Cooperation Association Think Tankers Committee, Deputy General Manager, Chief Investment Officer and Chief Financial Officer of Mitsui Sumitomo Insurance(China) Co. Ltd. He has solid experience on Finance, Risk Management, Actuary, and investment. Mr. Zheng is fellow of Think Tankers Committee and member of Fintech Cooperation Committee of Asian Financial Cooperation Association. He is the board member of Association of International Certified Professional Accountants and Council member of Charter Institution of Management Accountant.
Zhang Jie, Zhang Xinwen, Li Mingzhu, and Tang Shuheng also contributed to this article.
About AFTTC
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