NATURE'S FURY FUELS INSURANCE DEMAND

Floods and fires are driving more consumer awareness and take-up of property insurance in Southeast Asia.

In Malaysia, for example, the country’s high exposure to natural disasters has pushed up consumer awareness on this segment. Currently, property insurance make up the the second largest line in Malaysia’s general insurance market, accounting for a 24.6% share of the general insurance direct written premiums as of 2022.

Malaysia’s property insurance market is expected to grow by a further 6.7% in 2023, driven by an increase in residential and commercial construction activities.

“The country’s high exposure to natural disasters during the last few years, especially floods, has played a pivotal role in increasing consumer awareness of property insurance,” said Sutirtha Dutta, insurance analyst at GlobalData.

Reacting to the increasing demand, insurers are providing flood coverage under comprehensive fire policies, which will support property insurance growth, Dutta added. As a result of this, property insurance in Malaysia is expected to grow at a compound annual growth rate of 7.7% between 2022 and 2027.

In Singapore, compulsory fire insurance is propping up its real estate insurance market.

A major factor for the growth is that fire insurance is required when purchasing homes from the Housing and Development Board (HDB) and taking home loans.

Singapore's property insurance industry is project to be worth S$1.5b (US$1.1b) by 2027, growing at a compound annual growth rate of 8.7% from S$1b (or US$700m) in 2022. Adequate reinsurance coverage will also help Singapore property insurers to remain profitable in 2023.