erging ar„ets continue to gain gloƒal s‚are Emerging sia“ healthy growth in lie and nonŽlie Life insurance ”ie premium growth in emerging sia espite economic headwinds‰ lie premiums in emerging sia grew aster in 201 accelerated last year‰ despite strong than in 201’‰ by 16ˆ against ¡…1ˆ… The improved perormance was in part due to economic headwinds… recovery in ndia and the €hilippines‰ and sustained strong expansion in ndonesia and ¨ietnam… n ndia‰ the recovery was underpinned by investmentŽlined products which posted strong growth through bancassurance channels… Nevertheless‰ the main contributor was —hina‰ where premium growth accelerated to 20ˆ in 201 rom 13ˆ a year earlier… This in turn was driven by insurers’ raising guarantee rates to compete with wealthŽmanagement products oered by bans‰ ater the regulator removed the interest rate cap on participating policies in ¢ctober 201… ¢verall sector proitability in emerging sia remained solid on lower realised losses‰ but lie insurers continue to ace the challenge o low interest rates… €remium growth is liely to remain The outloo or the lie sector in emerging sia remains avourable with premiums doubleŽdigit in 2016‰ but less than in orecast to maintain doubleŽdigit growth in 2016 and 201ƒ… n ndonesia and 201… ‚alaysia‰ insurers are increasingly ocused on the sharia compliant/taaul business‰ which has grown more strongly than conventional business in recent years… n —hina‰ the growth o lie premiums could slow rom last year’s high level as insurers become increasingly concerned about guarantees oered or products o longer durations… ˜ecent interest rate cuts in several countries including —hina‰ ndia‰ Thailand and ndonesia will put urther pressure on insurers’ proits… Non-life insurance NonŽlie premium growth was strong in NonŽlie premiums in emerging sia grew by 1ˆ in 201‰ compared with 1’ˆ in most emerging sian marets‰ with the 201’… €remium growth remained strong in —hina †£1ƒˆ‡‰ the second largest nonŽlie exception o ‚alaysia… maret in the world‰ driven by motor‰ guarantee ™ credit and agricultural insurance business… n most other emerging sian marets‰ in particular ndia‰ ndonesia and erging ’sia ‡reius• 2015 Thailand‰ premium growth improved rom a lat perormance the previous year… Œorld rowth in ndia was led by stronger health †including personal accident †€ ‡‡ and ‹„ bn maret share ‚T€” premiums… n ndonesia‰ a recovery in motor premiums was the main ”ie 312 12ˆ contributor‰ while in Thailand health insurance perormed well… n ‚alaysia on the NonŽlie 212 10ˆ other hand‰ nonŽlie premium growth stalled in 201 ater ’…3ˆ growth in 201’‰ mainly rom slower sales o motor vehicles… ‚eanwhile‰ underwriting perormance 20% Real premium growth largely remained satisactory in emerging sia in 201‰ particularly in —hina‰ ‚alaysia and the €hilippines‰ given an absence o signiicant natural catastrophe 18% losses… The explosion in TianŠin ports in ugust 201‰ while being the largest manŽ 15% made disasters in sia with an estimated property loss o ‹„ 2… billion to ‹„ 3… billion‰ had a limited impact on the proitability o —hina’s insurers partly due 13% to reinsurance recoverables… 10% 8% The region is expected to sustain robust premium growth in 2016 and 201ƒ… —hina‰ or instance‰ will beneit rom the government’s obŠective to raise total insurance 5% penetration to ˆ by 2020 rom 3ˆ in 201’… To this end‰ the government has 3% initiated policies to encourage the development o property natural catastrophe‰ 0% environmental liability and agricultural insurance‰ among others… „ustained Life, excl inrastructure investment in other marets will also support aggregate premium LifeNon-lifeNon-life, growth in the region… Nonetheless‰ ongoing motor deŽtariication in —hina could China excl China exert downward pressure on premium growth given that motor accounts or about Growth rate 2015 ƒ0ˆ o total nonŽlie premiums… Elsewhere‰ ‚alaysia is also preparing to liberalise Pre-crisis average growth 2003–200 motor taris in 2016‰ which could intensiy competition and suppress premium Post-crisis average growth 200–201 growth… n comparison‰ premium growth in ndia will beneit rom the hies in ‚T€” rates in pril 2016… ¢verall‰ nonŽlie proitability in sia will liely remain depressed due to the ongoing low interest rate environment and increasing price pressures in —hina and ‚alaysia due to motor deŽtariication… 30 Swiss Re sigma No 3/2016
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