Asia's insurance to grow twice at the world average

Asia's insurance to grow twice at the world average

KUALA LUMPUR (AFP): The insurance industry in the rapidly-
booming economies of Asia is expected to grow at twice the world
average, the Malaysian Insurance Institute said yesterday.

The institute chairman, Fong Weng Phak who is also deputy
governor of central Bank Negara, said Asia's insurance industry
is projected to grow at 10 percent annually, compared to a
worldwide growth of only four percent.

The industrialization process in Asia, which accounts for 50
percent of the world's population and some 25 percent of its
output, would open up new opportunities for insurers, he said.

"As Asian countries build their infrastructure and industries,
they are already a vast source of insurance business for
companies which have the capacity and capability," Fong said when
opening an insurance seminar.

"The increasing income levels will offer recurring waves of
opportunities for insurers," he added.

Fong said the insurance industry worldwide was experiencing
fundamental and structural change as a result of liberalization
of the financial services industry and globalization of the world
economy.

He urged Malaysian insurers to "shape-up" their business
operations to survive the more open environment and stave off
competition from global players who are highly equipped with
capital, technology and experience.

"Malaysian insurers face the formidable tasks of having to
complete the catch-up process and to strategize to leapfrog into
the more competitive environment of the 21st century," Fong said.

They need to "maximize existing resources, embrace new
technologies, develop a creative mindset and have the boldness to
explore the new markets," he added.

Insurance experts echoed Fong's view that there was a
significant scope for growth in Asia's insurance industry over
the long term.

Roger Clements, underwriting director of British-based Royal
and Sun Alliance, said recent studies showed Asia accounted for
some 35 percent of global insurance business, or some US$750
billion.

"But if we remove Japan's contribution, this then equates to
half the world producing less than six percent of world
premiums," Clement said.

"Looking ahead over the next 10 years, the Asian insurance
industry should have excellent prospects to develop and grow," he
said, adding however, the US and Japan would still remain the
largest by far.

Going by Asia's lifestyle trend, Clement foresees great
potential in health care businesses for the aging, services and
infrastructure industries in the region.