Marine, aviation, and transit insurance to balloon to $16b

The Asia-Pacific MAT insurance industry will present expansion opportunities for domestic insurers

It is estimated to grow at a CAGR of 6.4%

ASIA PACIFIC

Marine, aviation, and transit (MAT) insurance in Asia Pacific is expected to grow to $16b by 2026 in terms of written premiums, boosted by positive economic developments according to data and analytics firm GlobalData.

MAT insurance in APAC will grow at a compound annual growth rate of 6.4% from 2021 to 2026 as trade activities increase, flight services recovers, and demand from renewable energy infrastructure projects help the insurance segment.

According to GlobalData Senior Insurance Analyst Deblina Mitra, MAT insurance is estimated to have recovered in 2021 with 7.2% growth after remaining almost flat in 2020 as the COVID-19 pandemic adversely impacted air travel, and caused supply chain issues.

Mitra adds that a big part of the growth in MAT insurance segment is the establishment of the Regional Comprehensive Economic Partnership (RCEP) in January 2022 as this is expected to create new business opportunities for insurers in Asia Pacific. RCEP involves 15 regional markets including China, Japan, and South Korea.

“MAT insurers will also benefit from the ongoing shift towards clean energy in the Asia-Pacific region. The construction of offshore energy plants to replace fossil fuels, such as wind power projects, have gained traction in the region creating demand for marine renewable insurance lines within MAT insurance. China, India, Australia, and South Korea are amongst the major markets for wind and hydro energy in the region,” the GlobalData analyst said.

There is also a chance of increased premiums and policy wordings revision for MAT insurance as insurers’ prime focus will be on the Russia-Ukraine crisis as insurers reassess their exposure to war risks.

“The Asia-Pacific MAT insurance industry will present expansion opportunities for domestic insurers, as many foreign insurers, especially from Europe, are either reducing their presence in the region or exiting from the market due to unsustainable natural hazard losses. Also, their withdrawal from coalrelated underwriting, to comply with ESG targets, enhances opportunities for the domestic insurers. The profitability of insurers, however, remain exposed to enhanced security threats posed by geopolitical tensions, supply-chain issues, volatility in oil prices, and extreme weather repercussions,” Mitra said.

HERE ARE TAIWAN’S INSURANCE REGULATION AMENDMENTS FOR THE ELDERLY

In 2018, Taiwan formally became an ageing society, and in line with that, the Financial Supervisory Commission is urging insurers to adopt stronger measures in the country for the protection of elderly consumers.

In order to further strengthen the safeguards that insurers have in place to protect the right of elderly consumers to purchase insurance, the FSC amended several insurance regulations.

The amended regulations were Regulations Governing Pre-sale Procedures for Insurance Products, "Regulations Governing Business Solicitation, Policy Underwriting and Claim Adjusting of Insurance Enterprises, Directions for the Review of Life Insurance Products, Directions for Sale of Investment-linked Insurance Products, and the Compliance Matters for Disclosure of Information on Investment-linked Insurance regulation.

The key amendments were in product design, solicitation and underwriting procedures, and Improving disclosures related to investmentlinked insurance.

In product design, the amended regulation states that when an insurer engages in product development, it must assess the potential impact of a product's characteristics upon customers aged 65 or older and various adverse factors. Assessments must address the question of whether a product is suitable for sales to customers aged 65 or older.

Additionally, before an insurer begins selling an insurance product, it must hold awareness activities for its solicitors and cooperating sales channels to discuss whether particular products are suitable for elderly customers, and identify the types and characteristics of customers for which they are unsuitable.