Page 18 - Insurance Times Octoberr 2022

onade cutting Metromile’s staff by 20% MAT insurers will also benefit from the
Marine, aviation and tran-
after completing the acquisition of the ongoing shift towards clean energy in
sit insurance in Asia-Pacific
insurtech in August 2022. This came the Asia-Pacific region. The construc-
after Lemonade previously stated it to surpass $16 billion in tion of offshore energy plants to re-
would not reduce headcount. Other place fossil fuels, such as wind power
2026
high-profile insurtechs that have made projects, have gained traction in the
The marine, aviation and transit (MAT)
similar moves in 2022 include Nova region creating demand for marine
insurance industry in Asia-Pacific will
Benefits cutting 30% of its staff in June renewable insurance lines within MAT
grow from an estimated $11.9 billion
and Zego cutting 17% of its staff in July. insurance. China, India, Australia, and
in 2021 to $16.2 billion in 2026, in South Korea are among the major
Ben Carey-Evans, Senior Insurance
terms of written premium, driven by markets for wind and hydro energy in
Analyst at GlobalData, comments:
positive economic developments, fore- the region.
“These trends are likely due to a com-
casts GlobalData, a leading data, and
bination of factors. As highlighted, in- Deblina continues: “The ongoing Russia-
analytics company.
vestment into the sector has dried up Ukraine crisis will be a prime focus area
According to GlobalData, MAT insur-
somewhat. Funding rounds are essen- for the regional MAT insurers, and it is
ance in Asia-Pacific is estimated to
tial to keep insurtechs running in the expected that policy wordings might be
grow at a compound annual growth revised, and premiums will be increased
early stages before they become prof-
rate (CAGR) of 6.4% over 2021-26, sup- at the time of renewals to re-assess the
itable, so reduced investment is a sig-
ported by increasing trade activities, insurers’ exposure to war risks.”
nificant barrier.”
recovery in flight services, and demand
At the end of July 2022 there had been Lloyd’s Market Association (LMA), for
from renewable energy infrastructure
$1.0 billion invested into the theme, example, announced high-risk status
projects.
which represents 49.5% of the total for all of Russia’s territorial waters in
Deblina Mitra, Senior Insurance Ana-
annual 2021 figure suggesting growth April 2022. Before that, in February
lyst at GlobalData, comments: “MAT 2022, the Joint War Committee as-
is unlikely in 2022.
insurance is estimated to have recov- signed high-risk status to the Sea of
It is also likely that in tough economic
ered in 2021 with 7.2% growth after Azov and the Black Sea waters. These
times – such as a pandemic and now
remaining almost flat in 2020 as the straits are a prominent gateway for
the cost-of-living crisis – consumers
COVID-19 pandemic adversely im- crude and agriculture transport be-
turn to familiar and established brands,
pacted air travel, and caused supply tween the Asia-Pacific and European
as they trust them more to survive and
chain issues.” countries. Vessels crossing these straits
pay out claims. It is also true that a lot
will be required to inform their insurer/
The establishment of the Regional
of insurtechs focus on gadget or pos-
broker beforehand to negotiate their
sessions insurance, which is not consid- Comprehensive Economic Partnership
policy terms.
(RCEP) in January 2022 is one of the
ered an essential purchase by consum-
major developments that is expected Deblina concludes: “The Asia-Pacific
ers. As a result, it is a line that is al-
to create new business opportunities MAT insurance industry will present
ways likely to be hit as disposable in-
comes decrease and consumers look to for insurers in Asia-Pacific. Involving 15 expansion opportunities for domestic
insurers, as many foreign insurers, es-
regional markets including China, Ja-
reduce their expenditure.
pecially from Europe, are either reduc-
pan, and South Korea, RCEP aims to
Carey-Evans adds: “Insurtechs will ing their presence in the region or ex-
remove up to 90% tariff on goods.
need to focus on offering value to con- iting from the market due to unsus-
RCEP is expected to increase trade
sumers, as that is what they will be tainable natural hazard losses. Also,
among the member nations by $42
looking for in the immediate future. their withdrawal from coal-related
This can be achieved by relying heavily billion, out of which 40% will be from underwriting, to comply with ESG tar-
new trade creation, according to the
on artificial intelligence to cut process- gets, enhances opportunities for the
United Nations Conference on Trade
ing costs, or by offering innovative domestic insurers. The profitability of
and Development (UNCTAD). The in-
products such as pay-as-you-drive and insurers, however, remain exposed to
creased foreign trade through road,
on-demand policies. The latter would enhanced security threats posed by
allow consumers to control how much maritime, and air facilitated by RCEP geopolitical tensions, supply-chain is-
will create new business opportunities
they pay or receive cover only when it sues, volatility in oil prices, and ex-
for the MAT insurance industry.
is strictly needed.” treme weather repercussions.”
18 The Insurance Times, October 2022