SIRC diary: Think Small
November 4 2024 by Marcus Alcock
The 20th Singapore International Insurance Conference (SIRC) is now in full swing, and it’s great to see such a vibrant conference. Rooms are fully booked out, and there is a real buzz about this place. I’ve been to many a (re)insurance conference over the years, and I can genuinely say that SIRC is right up there as one of the very best- so congrats to all concerned, and for the APAC market in making this such a success.
However, amidst all the back-patting, there remains the elephant in the room: the protection gap across Asia. As long as I’ve been writing about this market the disparity in take-up rates of insurance (which after all underpins all follow-on markets) across most territories in Asia when compared to other mature insurance markets remains an issue. Quite simply, given its huge population and prospects for continued economic growth, it remains the case that insurance penetration rates across a swathe of product lines remain too low.
Don’t just take my word for it. According to no less an authority than Swiss Re, Asia’s protection gaps are substantial and growing. In 2022, the protection gap in the Asia Pacific region was estimated at some US$886 billion in premium terms, a staggering 38% increase from 2017, representing half of the global protection gap. The fact remains that large segments of the Asian population remain underserved by insurance and other risk management solutions, leaving communities and economies vulnerable to financial hardship from unforeseen risk events such as natural disasters and health emergencies.
There are many reasons given for this gap continuing. For financial lines products, for example, I often here cited a continuing cultural gap compared to Europe and North America, with considerably different legal systems and a consequent unwillingness to litigate underpinning a continuing lack of growth across several territories in the region. Of course, this is not the case everywhere (one thinks of Australia and New Zealand, for example) but it remains broadly true.
However, I spoke to one market veteran at SIRC and he offered a perhaps more telling reason for the protection gap, which is simply that many insurers and reinsurers operating across APAC have failed to engage with people on a local level. What’s needed is dealing with small sums insured and working outside of 9-5 hours to suit local markets and local needs. Asia (re)insurance: think small!
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