The growing middle class in Asia remains optimistic despite economic headwinds, and this presents significant opportunities for the insurance industry, a study by Peak Reinsurance Company (Peak Re) has found.
The survey, conducted by Peak Re and Intuit Research, surveyed seven emerging Asian markets – Malaysia, Indonesia, Thailand, Vietnam, Philippines, China and India – and three mature Asian markets – South Korea, Hong Kong and Japan.
The survey found that middle-class individuals in emerging markets are more optimistic about their financial well-being, social mobility and their children’s success than their counterparts in mature markets. Emerging Asia’s middle class is also more health-conscious and more aware of the heavy financial burden of medical expenses. In terms of personal finances, respondents from emerging Asia are also more confident about their financial literacy and more disciplined about spending and saving. This optimism is reflected in the fact that more of them have ambitions to become entrepreneurs or expect employers to improve work-life balance, Peak Re said.
According to Peak Re, health, wellbeing, and financial wealth are the most important priorities in the middle-class consumer segment. With growing economic prosperity in the region, these customers will require more risk mitigation and protection products and services, creating substantial growth opportunities for the insurance and reinsurance sector.
Peak Re said that understanding the behaviour and preferences of the emerging Asian middle class is crucial in successfully tapping into this important insurance market segment. These consumers need more insurance coverage as they begin to accumulate wealth and make plans for their retirement and their children's education.
“Emerging Asia's share of world GDP has increased significantly, from 5% in 1990 to an estimated 26% in 2022, according to the IMF,” said Franz Josef Hahn, Peak Re CEO. “Despite cyclical economic challenges, emerging Asia is expected to remain the fastest-growing region in the world over the next decade. With higher income levels and the rise of the middle class, there are significant opportunities for insurers and reinsurers to offer risk mitigation and protection solutions. Since 2012, Peak Re's mandate to support the emerging Asian middle class makes it well-positioned to benefit from this tremendous growth.”