Page 22 - Insurance Times April 2021

had announced in 2015 that it is entering the Surety market X The key players include People's Insurance
in Asia. The surety efforts in Asia has focus on civil Company of China, China Pacific Insurance
contractors, general builders, engineering firms, equipment Company, Ping An Insurance Company of China, Ltd.
manufacturers and suppliers and fabrication firms. and few foreign companies in the surety market.
X These parties are further strengthening the urban
South Korea
X South Korea holds the largest surety market share planning and construction management.
in APAC region. X With above impetus, a number of insurance
X The surety segment in South Korea is benefited companies have started offering this product.
from obligatory bonding requirements.
X The surety bond product is modelled similar to the
X This growth is attributed to unique legal bonding US surety market.
requirements in the country; it is applicable for
X Reinsurers like PartnerRe are now witnessing a
public and infrastructure construction projects.
growing number of enquiries from insurance
X In Korea, the market has opened up due to changes companies in China writing these surety bonds.
brought in by the Financial Supervisory Service.
X China's One Belt-One Road (OBOR) initiative is
X The export trade credit insurance market has been
expected to increase demands for medium long-
opened up. Two companies led this market earlier:
term credit apart from the political risk insurance
Seoul Guarantee Insurance and K-Sure. These two
companies are the export credit agencies of Korea. cover. This initiative is funded by Chinese banks who
are further offering their bonding solutions to the
X Non-life insurance companies such as Samsung, contractors to foster project achievement.
Hyundai, KB and Dongbu, are now allowed to
underwrite export trade credit insurance. X The global and international providers of sureties
are alternatively setting up in near locations based
China in centers such as Hong Kong and Singapore to deal
X In the past six months, the surety bond market has and underwrite for Chinese companies. There are
developed significantly for insurers in China. leading international brokers who bring in the best
X Surety Bond is a relatively new product in China practices of their global surety underwriters.
predominantly for the construction sector.
Japan
X While construction companies had to approach
X Leading insurers opine that Japan will continue to
banks for surety products, over the past 8 months,
invest in infrastructure with the similar problem of
with Surety Bonds introduction, it is changing
dynamically. ageing public infrastructure including government
offices, schools, bridges, roads and so on built more
X This has been a bank guarantee market with than 40 to 50 years ago.
Chinese banks dominating the local market.
X Chinese insurers had started bonding business for X The cost of maintenance and the construction of
many years; these were financial guarantees existing public infrastructure is expected to be to
provided to SMEs and retail clients. the tune of 8.9 trillion yen or $86 billion while Japan
is prioritizing such projects.
X Leading non-life insurers had received product
approval on contract bonds as early as 2016, X One more driver in Japan is the commencement of
however the business was dominated by Chinese export credit agency: Nippon Export and
banks in the national market. Investment Insurance (NEXI). NEXI has approached
X The China Insurance Regulatory Commission (CIRC), companies like PartnerRe and other reinsurers for
People's Republic of China Central Committee and coverage and expertise.
State Council are further opening up this market.
X While there are no Chinese-owned surety Australia
companies, there exists a few key strong players in X Surety bonds have been traditionally issued to
the bond insurance business. support the Australian construction industry.

22 The Insurance Times, April 2021