Norton Rose survey predicts significant growth in insurance sector across Asia Pacific
16 February 2011
The Norton Rose Asia Pacific Insurance Survey 2011 sampled 92 professionals from the insurance sector including life, non-life, reinsurance, advisory and regulatory affairs.
- China is perceived as having the most significant prospect for growth
- Top five perceived countries for significant growth of insurance sector are:
- China (97%)
- India (90%)
- Indonesia (80%)
- Vietnam and Malaysia (77%)
- Solvency II, which will come into force in Europe October 2012, will impact Asia significantly
- Asia Pacific regulators should align regulatory regimes, regionally and with Solvency II
Potential for growth
According to a new survey by Norton Rose Group, an international legal practice, the insurance sector in Asia Pacific will see dramatic growth in business over the next two years with China and India predicted to experience significant or very significant growth by 97% and 90% of respondents respectively. Indonesia came third with 80%, Vietnam and Malaysia in joint fourth place with 77%.
In the countries with strict regulations governing foreign investment China, India, Indonesia, Vietnam and Malaysia, growth is anticipated to be through joint ventures while countries such as Australia, Hong Kong, Japan, Singapore and Taiwan will see growth through mergers and acquisitions.
James Bateson, head of Financial Institutions from London, commented:
"That Asia is ripe for growth in the insurance sector is a given; just how and when that will occur is more uncertain. Political and regulatory uncertainty together with protectionist regimes are a barrier, but the pure scale of opportunity means that new entrants and existing players wishing to expand have to take strategic risks with those factors. Additionally, the desire and regulatory necessity for global players to maintain minimum standards and group capital, which for most European and US headquartered operations means standards higher than those imposed by local regulation, risks making these operations less competitive than their local peers and when investment opportunities arise, allows local acquirers / investors to offer considerably higher prices."
Regulation - Europe and Asia Pacific
The Norton Rose Group survey found that 42% of respondents believe that Solvency II, which will come into force in Europe in October 2012, will impact Asia Pacific significantly. Whilst Europe has made great strides in regulating the insurance industry regionally, from an analysis of the respondents it appears Asia Pacific regulators should consider aligning regulatory regimes, regionally and with Solvency II.
Anna Tipping, who recently joined Norton Rose (Asia) LLP as a corporate partner to head the Group’s insurance practice in Asia from Singapore, commented:
“Asia Pacific regulators have a stark choice: implement a Solvency II type regime that is viewed as equivalent and in line with the Western world or go for light touch regulation and be exposed to the risk of regulatory arbitrage and a division of the market as Western insurers will not be able to compete profitably in the region.”
Lynn Yang, partner, Norton Rose LLP in Shanghai commented:
“2010 is the year that CIRC, for the first time, proactively hosted the first international joint conference on insurance supervision with insurance regulators of other 11 countries/regions with the aim of improving international co-operation on supervision and minimising solvency risk for insurers.”
To download the Norton Rose Group Asia Pacific Insurance Survey 2011 please click here.
For further information please contact:
Lorraine Lee, Regional Business Development Manager
+852 3405 2324 firstname.lastname@example.org
Kerrin Roberts, Business Head of Public Relations
+44 20 7444 2596 email@example.com
+44 7595 886216
Norton Rose Group is a leading international legal practice. We offer a full business law service from our offices across Europe, the Middle East and Asia Pacific.
Knowing how our clients’ businesses work and understanding what drives their industries is fundamental to us. Our lawyers share industry knowledge and sector expertise across borders, enabling us to support our clients anywhere in the world. We are strong in financial institutions; energy; infrastructure and commodities; transport; and technology.
We have over 1800 lawyers operating from 30 offices in Abu Dhabi, Amsterdam, Athens, Bahrain, Bangkok, Beijing, Brisbane, Brussels, Canberra, Dubai, Frankfurt, Hong Kong, London, Melbourne, Milan, Moscow, Munich, Paris, Perth, Piraeus, Prague, Rome, Shanghai, Singapore, Sydney, Tokyo and Warsaw and from associate offices in Ho Chi Minh City, Jakarta and Riyadh.
Norton Rose Group comprises Norton Rose LLP, Norton Rose Australia and their respective affiliates.
Leading Canadian law firm Ogilvy Renault, and leading South African law firm Deneys Reitz, will join Norton Rose Group on 1 June 2011. The enlarged Group will have 2500 lawyers in 38 offices worldwide, including Montreal, Ottawa, Toronto, Quebec, Calgary, Johannesburg, Durban and Cape Town.