SINGAPORE, Oct 20 (Bernama-BUSINESS WIRE) — Although many reinsurers operating in Southeast Asia recorded underwriting losses last year from perennial challenges such as pricing inadequacy and large catastrophe-related claims, the region still offers significant growth potential given the hardening market conditions and greater demand for health coverage amid the pandemic,according to a new AM Best report.
A new Best’s Market Segment Report, titled, “Southeast Asian Reinsurers Look to Life and Health for Growth,” states that many domestic reinsurers in Southeast Asia posted solid premium growth in 2019, although these increases generally did not translate to favorable underwriting results. However, there are signs that the reinsurance market in the region may improve. The exit of several reinsurance underwriters from the region and tightened underwriting practices of global reinsurers amid the COVID-19 pandemic has reduced capacity and increased rates. At the same time, the ongoing COVID-19 pandemic has accelerated the growth trend in the life and health insurance segment, as demand for coverage has risen as consumers have become increasingly aware of the benefits. Given that the penetration of health insurance remains very low, AM Best expects the growth in this segment to continue to outpace other classes of business in the region.