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Morbidity risks, such as increasing rates of cancer, diabetes, and cardiovascular diseases, are the top insurance gap in emerging Asian markets, according to a study by Peak Reinsurance Company (Peak Re).
In a report published in the company’s Peak Times newsletter, the Emerging Asia Life Insurance Pulse 2019 survey found that morbidity risks centre on increasing environmental pollution, changing lifestyles, and population aging, which have given rise to increased prevalence of non-communicable and degenerative diseases.
It added that millions of families are exposed to these risks, and in case they affect the family’s main breadwinner, could mean the family sliding back into poverty.
The executives polled by Peak Re said that a lack of awareness is the main reason for this type of underinsurance. Cultural obstacles were identified as the second most relevant roadblock to insurance buying. Many customers still rely on traditional family ties or government support for protection. Meanwhile, many individuals expect a “return” from insurance and do not believe that “peace of mind” as such is worth a regular premium payment even if claims fall short of it, the study found.
However, things are looking up for emerging Asia. Almost nine in 10 (86%) of executives polled believe that life and health insurance premiums will continue to outpace GDP growth. As non-communicable and critical diseases become more common, in combination with people’s increasing awareness of the need to protect their and their families’ incomes, many respondents indicated that fixed-benefit health products are the fastest growing life and health product line in emerging Asian markets.
“Peak Re has been founded to grasp these opportunities and to facilitate and protect prosperity, particularly in Asia’s emerging economies,” said Peak Re CEO Franz Josef Hahn. “In trade credit, we engaged in a partnership that empowers medium-size local insurance companies to better assess and write credit risk. Likewise, we are also expanding our life & health business in Asia-Pacific. As a token of our commitment to the region and this line, Peak Re sponsored the Emerging Asia Life Insurance Pulse. The survey highlights the potential of this line from an insurer’s perspective.”
