Asia to dominate insurance landscape in the next decade

The insurance market in Asia will come to dominate over the next ten years according to John Donnelly. Donnelly, Asia Pacific head of placement for Marsh, said that present conditions in the global market will enable Asian insurers to capitalise. He said that, “In ten to fifteen years’ time, I will be very surprised if seven or eight of the top ten global insurers weren’t Asian. That will happen through acquisition but it is also going to happen organically for them. China is the greatest example, in China the insurers are growing more through an increase in sophistication in the buying market than they are through anything. Chinese people didn’t buy insurance and now there are more middle class in China and more of them are buying insurance. That marketplace is expanding and yet the economic growth is roughly 7%, I think you have roughly 14-16% of market growth as well. We haven’t got that in other markets so what that does is give them more capital to be able to spend on acquisitions.” As capital investment has no intent on dying down, it is expected the recent spate of M&As across the industry will continue, despite the cooling down in mega-mergers. Donnelly commented that, “It seems to have slowed down because there has been nothing significant announced in more recent times. However, I’d expect there are still to be transactions to be done in the same way that if we were in any industry. If there is a lack of economic growth and therefore a lack of organic growth in a business, that is when you see an uptick in M&A activity. You are seeing this in all sorts of industries and you’d expect to see it continue in insurance because the more mega-mergers there are the less possibility there is of more transactions taking place.”