A new report from
QBE has found that while 95% of consumers have some form of general business insurance, roughly half of companies in major Asian nations do not have any business liability insurance.
The report, which surveyed businesses in Hong Kong, Singapore, Indonesia and Malaysia, found that ownership of products such as public and product liability, professional indemnity and D&O was low, even for companies that have experienced a liability loss event.
Indonesia and Singapore lead the way on liability insurance ownership at 54%, while 47% of Hong Kong businesses have some form of cover and 45% in Malaysia. These low numbers come even though 63% of all companies surveyed had experienced liability-related incidents within the last year.
Marcelo Teixeira, global head of bancassurance and head of strategic development, emerging markets division at QBE Insurance Group, explained that basic human nature could be causing this limited uptake.
“The first thing that comes to my mind is that it is more natural to protect the things we see,” Teixeira told
Insurance Business. “Liability is something we don’t see, it is not seen because it is not there and we don’t remember that every day, we only remember that when something wrong happens.”
Those surveyed said that the biggest reason they do not hold the cover is because the cover is not worth the cost versus the risk due to scale (36%). Teixeira said that the industry must look to engage with SMEs and small businesses on their liability risks as, except in mandatory cases, new coverages may be needed.
“I think the insurance industry hasn’t been capable of delivering some package solutions for liability for small businesses,” Teixeira continued. “I don’t think there are enough products to serve the needs of customers, particularly SME customers, which should be seen as an opportunity.”
Insurers, brokers and the wider insurance industry need to educate and engage with clients on liability issues to move clients from a reactive to proactive stance.
With liability risks ever changing and newly emerging, Teixeira said that there is not just a demand for liability cover in the region, there is a need - and if the industry is unable to meet that need it may come within the purview of the regulator.
“In certain cases, where you see society is paying a price for something they should not, there comes the regulator saying this has to be part of the discussion,” he concluded.
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