BCC Research’s recent report Global Insurance Industry Market dives into the outlook for the industry. Rising interest rates, volatile equity markets, and geopolitical uncertainty all threaten to impact the insurance industry – BCC Research’s report provides the information and knowledge to help navigate these uncertain waters.
APAC countries like China, India and Japan saw an increased consumer demand for insurance policies during the pandemic, prompted by growing concerns about medical aid. In 2020-2021, the Swiss Re Institute found that 30-40% of survey respondents from the Asia-Pacific region had adopted an additional insurance policy due to the pandemic. Similarly, 25-50% of the insured planned to have an additional policy. Plus, around 56% of the insured in emerging Asia are expected to buy additional insurance, while in developed markets, 13% of the insured buy an additional policy.
The digital habits undertaken during lockdowns have increased the awareness of insurance policies. This is another factor influencing the growth of the global insurance market. Plus, third-party non-incumbents such as Grab and WeChat are integrating data analytics and predictive analytics to offer more customized insurance products, which should help offer greater personalization – a growing trend across countless industries.
In the post-pandemic landscape, ballooning inflation has been impacting the entire globe. This means that the cost of claims is rising, especially liabilities due to inflation. It’s a complex issue that leaves a longer tail of risk.
COVID-19 has had the greatest impact on the most vulnerable in society. White-collar workers were safeguarded by working remotely, while blue-collar employees were expected to work on the frontline, in higher-risk jobs. Governments have enacted by intervening in fiscal regulations and pushing direct transfers to businesses and households. They have also determined cooperative monetary policy, creating lower-cost credit.
The rising inflation rate is resulting in higher insurance premiums, which will lead to decreased use of insurance globally.
When interest rates fall, guaranteed return products become more popular despite their lower rate of return. One reason for this is that these plans also include life insurance, as well as family protection. Concerns regarding this grew throughout the pandemic, in addition to the guaranteed returns upon maturity. This creates increasing opportunities for guaranteed return products.
Requests for term insurance have also been increasing, even though it is predominantly a push product. Term insurance is frequently the most cost-effective method to procure a considerable death benefit based on the sum insured and the premiums. The insurer bids to reimburse the beneficiary a guaranteed sum upon the death of the insured, in exchange for the insured or their beneficiary paying scheduled premiums. This is another window for insurers to maximise their opportunities.
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