Chinese insurers and reinsurers are developing an appetite for non-Chinese owned assets and this, coupled with a string of other factors, could have a profound impact on the insurance industry, according to Aon’s third quarter Insurance Market Update for 2014.
The risk management business warned against the industry taking recent market data at face value and called for the insurance industry to look deeper than the status quo at potential drivers of change.
James Baum, managing director of broking and chief broking officer, Aon Risk Solutions Australia said among these drivers
is the growing appetite of Chinese insurers and reinsurers for non-Chinese-owned assets, particularly property.
“The upshot is that these insurers offer a very cost-competitive avenue, particularly where large amounts of capacity are required. It is likely that over time, as differences in business culture become better understood and managed, there will be a major move toward these providers.”
A shift in the US interested rate environment could also shape the insurance industry, Baum said, as well as growing complacent in the face of continuing economic uncertainty.
He added there are several industry-specific factors that could also drive change in the market including heavier regulation, increased competition which is reducing premiums and forcing companies to become more innovative with policy types and wordings, large infrastructure projects, and consumers shopping around for better deals.
, CEO of Aon Risk Solutions Australia, said: “At first glance the data shows little variation from the past few quarters. Casual observers might conclude that we are in a ‘steady as she goes’ part of the cycle.
“However, just because themes such as industry capacity and increasing competition are recurring, that does not mean the interplay of these factors will deliver recurring outcomes. On the contrary, some outcomes may come as a surprise to the industry – especially those who’ve become complacent and failed to look ahead.”