Singapore:
Large and complex risks will continue to dominate the Asian commercial insurance market, proving the current business model unsustainable and not fit for purpose, according to Willis Towers Watson’s 2019 Asia Market Report.
“There have been a tighter scrutiny of underwriting practices and withdrawals by insurers from certain countries, lines of business and, in some cases, the region altogether. This is evidenced by the toughening of the market with insurers returning to technical underwriting. However, not all domestic markets have had the same experience nor are all countries seeing a hardening marketplace. China continues to ‘buck the trend’ and grow as an increasingly important hub for non-Chinese business,” says Ron Whyte, Chief Operating Officer, Corporate Risk and Broking Asia, Willis Towers Watson
According to Scott Burnett, CEO, Corporate Risk and Broking Asia, and Head of Asia at Willis Towers Watson,a different risk management approach is needed and, in particular, one that focuses on risk mitigation. Cyber exposure has expanded beyond data breaches and must now be considered in the context of disruptions to supply chains.
Liability exposures are further evolving with the rapid adoption of new technologies and must be carefully considered to ensure that the insurance policies remain relevant and responsive, he said..
Geopolitical risks are abound across the Asian region with unforeseen and uncertain impacts. It is therefore important for companies to understand, prevent, protect and then respond with the right insurance and risk strategy for their businesses, said Scott.
“Too often, we hear clients struggle to quantify the financial impact and likelihood of risks to their business. Today, companies need to know, with certainty, that the insurance strategy they have in place is exactly right for their business. With new and emerging risks on the accelerated rise, they need to adopt a data-driven and actuarial approach to support all aspects of their insurance procurement process to yield better business outcomes,” adds Scott.
In the report, Willis Towers Watson outlines the urgent need for insurance buyers to go beyond traditional brokerage services, including assessment, transfer, placement, and claims. Risk engineering must be present at all stages of the engagement, with data and analytics being used to inform conversations with companies to help them look beyond current risks, allowing companies to take a more strategic approach to insurance.