The property insurance market in the Asia-Pacific (APAC) region is set for substantial growth, with projected premiums expected to reach $152.2 billion by 2028, up from an estimated $93.1 billion in 2023. This represents a compound annual growth rate (CAGR) of 10.8%, according to a recent report by GlobalData.
The report, titled “Property Insurance Market Trends and Analysis by Region, Line of Business, Competitive Landscape and Forecast to 2028,” indicates that the growth rate in APAC will exceed the global average, which is forecasted to expand at a CAGR of 8.1% during the same period.
Leading Countries in APAC Property Insurance
China, Japan, and Australia are set to dominate the APAC property insurance market, with these three nations expected to account for 75.2% of the region’s written premiums in 2024. China is projected to lead with 36%, followed by Japan at 23.5%, and Australia at 15.7%.
Aarti Sharma, an insurance analyst at GlobalData, highlighted that the APAC property insurance market is forecasted to grow by 8.3% in 2024, driven by rigorous underwriting practices and higher premiums for fire and home multi-risk property insurance.
“Favorable regulatory changes and the adoption of advanced technologies such as artificial intelligence (AI) and machine learning (ML) in risk assessment and claims processing will further drive industry growth,” Sharma noted.
Key Segments Expected to Lead
The fire and home multi-risk property insurance segments are anticipated to be the major contributors to the APAC market in 2024, primarily due to the increasing frequency of natural catastrophic events.
The Insurance Council of Australia (ICA) reported substantial economic losses from storms in New South Wales, Queensland, and Victoria in early 2024, totaling over $495 million (US$322.2 million).
In response to these rising losses, the General Insurance Rating Organization of Japan (GIROJ) increased benchmark rates for fire insurance from 5.5% in 2018 to 13% in 2023.
“The heightened demand for fire and home multi-risk policies is driven by greater awareness of the financial risks associated with natural disasters and the need for extensive coverage. Insurers are expected to face capacity constraints for high-risk and natural catastrophe exposures due to elevated reinsurance costs and poor loss ratio performance,” Sharma explained.
Influential Factors in the APAC Market
The integration of generative AI and ML technologies is poised to bolster the growth of the APAC property insurance sector. These advancements are improving sales processes, risk modeling, and customer engagement, offering critical insights into high-risk areas and enhancing risk management strategies.
“AI-driven data analysis is facilitating lead generation for insurers. Virtual assistants and chatbots are enhancing customer interactions by providing information on policies and claims status, which increases operational efficiency,” Sharma added.
Regulatory developments are also playing a crucial role in shaping the APAC property insurance landscape. In April 2024, China’s National Financial Supervisory Authority (NFSA) introduced guidelines to promote green insurance, supporting environmental protection and sustainable consumption.
Additionally, the Commonwealth Government of Australia allocated extra funding to the ICA in May 2024 as part of its 2022-25 budget, aimed at strengthening disaster preparedness and resilience.
“Rising premium prices in fire and home multi-risk insurance due to increased reinsurance costs and exposure to natural catastrophes will drive growth in the APAC property insurance market over the next five years. Insurers will need to adapt to evolving AI and ML technologies and adjust their portfolios to manage high-severity loss exposure while ensuring profitability,” Sharma concluded.
