Commercial insurance rates across Asia have seen a continued decline, dropping by 3% in the latest quarter. This marks a slight improvement compared to the 4% decrease observed in the previous period. The largest reductions were noted in Korea, Malaysia, Singapore, and Thailand, which experienced declines of 9%, 7%, 7%, and 6%, respectively, according to a recent report from Marsh.
As the insurance market softens, Brent Clawson, Global Placement Leader for Marsh Asia, emphasized that this presents an ideal opportunity for clients to reassess their risk management strategies and address emerging risks. These include challenges such as supply chain disruptions and extreme climate events, which continue to shape the landscape.
In contrast to the broader decline, Taiwan and Japan saw rate increases, with commercial insurance rates rising by 11% in Taiwan and 3% in Japan.
Property insurance rates fell by 3%, driven by insurers targeting businesses with strong risk management practices. A higher risk appetite in certain market segments, combined with increased capacity, contributed to the declines. Portfolios with limited exposure to natural catastrophes recorded the most significant reductions.
Korea and Malaysia recorded the largest rate drops, at 8%, followed by Thailand and Singapore at 6%. Taiwan saw the steepest increase, with rates rising by 13%, while Japan’s property insurance rates rose by 3%.
Casualty Insurance
Casualty insurance rates experienced a modest decline of 1%. Companies with no losses and those benefiting from competitive London capacity saw reductions of 5% to 10%. However, businesses with significant North American exposure faced rising costs due to increased primary and umbrella capacity rates.
Korea saw the largest drop in casualty rates, at 12%, followed by Singapore and Thailand at 6%. Japan was the only market to experience an increase, with rates rising by 6%.
Directors and Officers (D&O) Liability
Directors and Officers (D&O) liability insurance drove notable changes in the market, with China witnessing the steepest drop of 20% to 25%. Korea and Singapore followed closely, both seeing declines of 11%. Taiwan was the sole market to report an increase, with rates rising by 1%.
Cyber insurance rates saw a significant decline of 11%, fueled by increasing competition among insurers. However, the sector remains volatile due to high-severity, low-frequency ransomware claims. Insurers are also becoming more cautious about the risks posed by artificial intelligence.
The sharpest declines in cyber insurance were observed in Singapore (-18%), Indonesia (-13%), Thailand (-13%), and Hong Kong (-13%). The Philippines was the only market to see an increase, with rates rising by 3%.
Overall, the latest data underscores the evolving trends in Asia’s insurance market, with varied impacts across different countries and sectors. While some regions benefit from lower premiums, others face rising costs, particularly in areas exposed to higher risks or with heavy North American market exposure.
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