Kathmandu. ASEAN’s insurance companies are largely driven by non-life premiums. But they still rely heavily on reinsurance companies globally for large and complex risks such as property, engineering, aviation and marine.
According to the Malaysian Rico ‘ASEAN Insurance Pulse’ report, ASEAN accounts for about 68 percent of the overall non-life premiums. “However, perceptions vary significantly across market and trade lines,” the report said.
Motor insurance is largely maintained in the ASEAN region, with ratios ranging from 98.4 percent in Indonesia to 84.2 percent in Singapore. “Perceptions for complex risks are very low,” the report said, ranging from 11.8 per cent for aviation in Vietnam to 57.6 per cent for maritime in Singapore. ’
In the ASEAN region, property and engineering are also under-performing due to large project scales and high risk of natural disaster risks. These lines account for a significant portion of premium outflows. It ranges from 38 percent in Singapore to 62 percent in Vietnam.
The report noted that domestic capacity to absorb large and volatile risks is low, and the risk of large correlated catastrophe losses in the market limits the willingness of insurance companies to take on more risk. It also highlighted deficiencies in disaster modelling, risk data and actuarial expertise in ASEAN. This affects pricing and risk management.
The entry of non-life insurance in ASEAN is common. Singapore, Thailand and Malaysia have entry rates of 1.8 percent, 1.9 percent and 1.4 percent respectively. That’s less than 3 percent of the European Union. Vietnam is at 0.7 percent. Indonesia and the Philippines are both at 0.6 percent.
Thailand was the largest non-life insurance market in ASEAN in 2024. Its total premium was about $ 7.9 billion. Brunei and Cambodia were among the smallest markets, with about $92 million and $156 million, respectively.
The report also identified trade barriers that limit cross-border reinsurance÷insurance activity. Formal hurdles include foreign ownership limits, sessions required for government reinsurance companies, capital localization requirements and domestic placement regulations.
Informal barriers include administrative delays and divergent regulatory powers. Some security is considered useful in less mature markets. But the report points out that larger, more complex risks require foreign expertise and capacity.
According to the report, ASEAN can strengthen resilience and maintain a high premium through deeper regional cooperation, including improved disaster modelling capabilities as well as alternative capital solutions such as risk bridges and disaster bonding. The ASEAN Insurance Council was highlighted as a key platform to support cooperation, including initiatives such as the ASEAN Renewable Energy Bridge. – Insurance Asia
