Insurance resilience in Asia Pacific has improved, over the last decade, according to the Macroeconomic Resilience Indices jointly developed by the Swiss Re Institute and the London School of Economics. In relative terms, the composite insurance resilience index, which uses data from 2007 to 2018 has improved in both advanced and emerging countries in Asia Pacific; insurance resilience is assessed for: nat cats, mortality and healthcare spending. In “advanced” Asia-Pacific, the composite insurance resilience index was up by 4% to 59%, while for emerging economies in the region it rose by 7% to 31%. Advanced Asia Pacific countries have the highest insurance resilience score for mortality risks of any region globally at 62%. Hong Kong, Japan, South Korea and Taiwan are among the economies with the highest life insurance penetration in the world, driven by savings-type products. In emerging Asia Pacific countries, insurance protection against the main three risks continues to be at significantly lower levels compared with advanced-economy counterparts. One notable development in emerging Asia Pacific is the strong gain in resilience against healthcare spending risk, reflecting the major universal health coverage-inspired reforms that have been implemented in China, India, Indonesia, Philippines, Thailand and Vietnam. Emerging economies in Asia Pacific have the largest absolute insurance protection gap of US$456 billion, representing almost 80% of the region’s total of US$572 billion. The largest improvement in insurance resilience was in Oceania. Oceania has the highest resilience score for nat cat risks of any region in the world at 69%. This reflects compulsory earthquake covers in New Zealand and success in efforts to increase uptake of flood insurance in Australia. Russell Higginbotham, chief executive reinsurance and regional president for Swiss Re Asia, commented: “The rising frequency of extreme weather events, geopolitical and macroeconomic instability, ageing populations and rising healthcare spending have transformed the risk landscape in Asia and globally.” “Swiss Re’s Resilience Indices are aimed at raising awareness of the protection gap and driving greater collaboration among governments, regulators, insurers and businesses to build societal resilience for the long-term.” Unfortunately the report also stated the global economy now has less capacity to absorb a shock than it did in 2007, at the onset of the global financial crisis. A record-high US$1.2 trillion protection gap for the three risk areas presents a huge opportunity for the market.
The Asia-Pacific (APAC) region has experienced improved insurance resilience across natural catastrophe, mortality and healthcare categories, according to Swiss Re and the London School of Economics. Their joint Macroeconomic Resilience Indices examined data from 2007 to 2018 and found advanced APAC countries scored 62% for insurance resilience against mortality risks, the highest global figure. In contrast, emerging APAC nations had the biggest protection gap, standing at $572bn, almost 80% of the $456bn regional total.