Specialty carriers swoop for APAC’s emerging A&H opportunity
November 13 2024 by Heather Ng
The accident & health (A&H) insurance market in Asia is witnessing significant growth, with selected (re)insurers and MGAs actively enhancing their offerings.
Last week, many (re)insurers and reinsurers brokers, speaking at the 20th SIRC, flagged accident and health as one of the key regional market drivers.
The ongoing health products portfolio pricing correction in various Asian markets underscores this point, with upward trends ranging from 10-30%, contingent upon the compositions and underlying products.
In 2024, there has been a flurry of appointments in the A&H space across the region with Peak Re hiring Dr. Ashish Kanakia as vice president, underwriting, A&H, South-East Asia markets in October, MGA Delta Underwriting expanding into the new line with an appointment of Lisa Leow as Asia head of accident and health in July, Tokio Marine Kiln naming Yang Yixiang as Asia Pacific head of accident and health, and Berkshire Hathaway Specialty Insurance bringing David Foote onboard as A&H executive underwriter for Australia.
HDI Global was one of the carriers to foray into the line of business in the region December 2023, planning to grow its A&H footprint in the region throughout 2024.
Another player that is growing its A&H team in the region is Nexus Underwriting which expanded its Asia team in August with the appointment of Seline Low as deputy head of accident and health.
Peak Re, in particular, is focused on expanding its A&H portfolio in Asia before moving to other regions.
“We’re trying to build more of a health book, not accident because there is a big protection [health] gap in emerging Asia where penetration is a huge challenge and opportunity,” Dr. Kumud Bordoloi, senior vice president, A&H underwriting, told InsuranceAsia News.
The substantial health insurance protection gap in the region, particularly in countries like China and India, where out-of-pocket expenses remain high, is a critical factor contributing to the double-digit growth of the Asian health insurance landscape, Bordoloi said.
To address this gap, Peak Re’s strategy involves assessing existing reinsurance opportunities in the non-life space to build a robust A&H portfolio and support partners in developing new health products. Peak Re also has A&H business in European markets, but the market size there is smaller.
“Currently, the European book is managed through the Zurich office, and we are working with them closely on how to tap the market, especially in Germany, France, the UK, or Spain,” he explained.
“We’re trying to build more of a health book, not accident because there is a big protection health gap in emerging Asia where penetration is a huge challenge and opportunity.”
Dr. Kumud Bordoloi, Peak Re
Justin Yeo, head of accident and health for Asia at Nexus, told IAN: “A&H is an important business line for us within the APAC region and one in which we continue to invest. We are targeting significant growth in the region and expect our continued expansion in the A&H market to be an important driver of this growth.”
P&C carrier Arch Australia also has plans to expand its A&H portfolio in the country further due to the “significant uptick in demand for A&H cover, particularly following Covid-19”.
Last August, Arch Australia decided to move its A&H operations, previously managed by Corporate Services Network (CSN), in-house.
“By bringing our A&H claims handling in-house, we can ensure that service level agreements are consistently met to high standards,” Tanui McGregor, first party and claims operations manager, Arch Insurance Australia, told IAN.
A&H also remains a priority line of business targeted for growth in Asia in line with ever-changing business needs and employee expectations for Zurich Insurance with Singapore as a core hub within the global Zurich network, according to the insurer’s spokesperson
A&H demand
In Asia, the demand for A&H coverage is driven by a variety of factors influencing each country’s needs such as GDP per capita, demographics, socio-political factors, and the existing penetration of A&H insurance.
“Over recent years there has been a significant uptick in demand for A&H cover, particularly following Covid-19 and Arch has grown to meet this demand.”
Jarrod O’Connor, Arch Insurance Australia
“Issues such as the ever-increasing cost of healthcare and the need for financial security against uncertainties are commonalities that each country [in the region] shares,” Nexus’ Yeo explained.
This growing awareness ties into the quality of public healthcare systems and perceptions of inadequacy can drive demand for private insurance to fill the gaps, Yeo further explained.
On an institutional level, one of the main benefits of private health insurance is in helping governments reduce their expenditure on public healthcare,” he said.
The Covid-19 pandemic changed people’s awareness of health, leading them to look for more health insurance products, Peak Re’s Bordoloi said.
He noted the importance of carefully considering product design to bridge gaps across different countries.
Nexus’ Yeo echoed his statement, cautioning that “Asia itself is a very diverse region, and the needs of each country or territory are very different.”
“Issues such as the ever-increasing cost of healthcare and the need for financial security against uncertainties are commonalities that each country in the region shares.” Justin Yeo, Nexus
The line of business still faces challenges in the region, including a shortage of professionals who understand the complete value chain of health from an insurance medicine perspective.
Bordoloi highlighted that companies struggle with how to grow sustainably while remaining profitableas the challenge of creating new products often stems from clients’ reluctance to try something entirely new.
“The necessity for new product designs is becoming apparent to clients. Unfortunately, there isn’t enough information to support the product pricing,” he said.
Defining risks is crucial for effective product design. “If we can’t define the risk, then you cannot design a product,” Bordoloi added.
“The industry tends to favour imitating existing products by altering coverages or underwriting parameters, which can lead to market saturation with similar offerings,” he said.
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