The property insurance industry in the Asia-Pacific (APAC) region is anticipated to expand significantly, reaching $152.2 billion in written premiums 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 report by GlobalData.
The report, titled “Property Insurance Market Trends and Analysis by Region, Line of Business, Competitive Landscape and Forecast to 2028,” suggests that the APAC region’s property insurance growth will outpace the global average, which is forecast to grow at a CAGR of 8.1% from 2024 to 2028.
In the APAC region, the property insurance market is predominantly concentrated in China, Japan, and Australia. These three countries are projected to represent 75.2% of the region’s written premiums in 2024, with China leading at 36%, followed by Japan at 23.5%, and Australia at 15.7%.
Aarti Sharma, an insurance analyst at GlobalData, said the APAC property insurance market is forecasted to grow by 8.3% in 2024, thanks to disciplined underwriting practices and increased premiums for fire and home multi-risk property insurance.
“Favourable regulatory changes and the adoption of advanced technologies such as artificial intelligence (AI) and machine learning (ML) in risk assessment and streamlining the claims process will further fuel the growth of the industry,” Sharma said.
GlobalData said the fire and home multi-risk property insurance segments are expected to lead the APAC market in 2024, mainly due to a rise in natural catastrophic (nat-cat) events.
The Insurance Council of Australia (ICA) noted significant economic losses from storms in New South Wales, Queensland, and Victoria in early 2024, amounting to over $495 million (US$322.2 million).
In response to increasing losses from natural hazards, the General Insurance Rating Organization of Japan (GIROJ) raised benchmark rates for fire insurance from 5.5% in 2018 to 13% in 2023.
“The increasing demand for fire and home multi-risk policies can be attributed to the growing awareness of the financial risks of natural disasters and the need for comprehensive coverage. Insurers’ capacity is expected to be limited for loss-making risks and nat-cat exposures due to high reinsurance costs and poor loss ratio performance,” Sharma said.
Advancements in generative AI and ML are expected to support the growth of the APAC property insurance sector. These technologies are enhancing sales, risk modelling, and customer engagement, providing critical data insights for identifying high-risk areas and aiding in risk management.
“Data analysis using AI is helping insurers generate sales leads. Virtual assistants and chatbots are guiding customers through the buying process and helping to interact with customers, offering information on policies and claims status, leading to higher efficiency,” Sharma said.
Regulatory developments are also shaping the APAC property insurance market. In April 2024, China’s National Financial Supervisory Authority (NFSA) issued guidelines to promote green insurance, aiming to support environmental protection and eco-friendly consumption.
Meanwhile, the Commonwealth Government of Australia announced additional funding in its 2022-25 budget to the ICA in May 2024, aimed at boosting disaster preparedness and resilience.
“Premium price increases in fire and home multi-risk due to increased reinsurance costs and exposure to nat-cat events will support the growth of property insurance in APAC over the next five years. Insurers will need to adapt to the changing dynamics of AI and ML and focus on portfolio adjustments to limit high-severity loss exposure while maintaining profitability,” Sharma said.
