In a geographic region like Asia Pacific, it can be all too easy to get blinded by the insurance business potential of the twin giants of India and China and ignore the myriad other dynamic economies.
But the not-so-hidden reality is that the cooling of international relations since Russia president Vladimir Putin’s invasion of Ukraine has led to sizeable pockets of business growth in Asia Pacific. In 2022, Asean countries alone saw a record $224bn in foreign-direct investment flow in.
And this can only be good for life and health insurers as well as property and casualty insurers.
Take Malaysia for instance, a nation that seems to be quite content to be the epitome of the ‘quiet achiever’. It seems that, as tensions between the US and China have ramped up and the focus has fallen on the production of microchips, the island of Penang in Malaysia has been a major beneficiary.
In the past year and half, dozens of chip manufacturers have set up in Penang, including China’s Fengshi Metal Technology, the US’s Micron and Intel and Europe’s AMS Osram and Infineon.
It is this skilful adaptability that marks much of Asia Pacific as being a region of dynamism and business nous.
Such business growth should be accompanied by an uptick in the purchase of insurance cover – trade-finance related or human-resource related – and everything in between. As readers of Asia Insurance Review know, business cannot thrive without insurance cover.
For similar geopolitical reasons, the Philippines is benefitting from increased demand from the US for the assembly, testing and packaging of semiconductors. The Philippines already has 13 plants dedicated to this work and if they cannot cope with the demand, more plants might be needed.
The challenge for the insurance sector will lie in spotting the business growth opportunities and capitalising on them. The Philippines insurance industry is already very familiar with the need to be so tactically agile.
In a world of growing political tensions, business still has to continue – even if this means tiptoeing around the practicalities of selling sensitive computer parts to ‘competing’ powers.
South Korea, home to the world’s leading memory chip makers, Samsung and SK Hynix, is also seeing increased demand – perhaps because many businesses are trying to ‘future proof’ themselves for the time when the AI tsunami hits their sector.
South Korea has long been held up as a smart technology hub – and its insurance sector is also one that demonstrates remarkable tenacity and inventiveness. In the life and health space alone, there are examples of new insurance initiatives that were birthed in South Korea and have been successfully exported to other countries in the region.
It may sound a little cliched, but sometimes clouds do indeed have silver linings – and the geopolitical cloud that has gathered over much of the world in recent years seems to be delivering much-deserved bounty to the nations of APAC that are savvy enough to move quickly.
This can only be good for the (re)insurance sector in the form of business growth. A
Paul McNamara
Editorial director
Asia Insurance Review