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Captive experts eye the Asia-Pacific region as the next growth region



The captured insurance sector in the Asia-Pacific region is relatively small but has potential for significant growth, as companies in the region are increasingly considering the auto-insurance sector as part of their risk management strategies, experts say.

As companies in the region become more exposed to prisoners and insurance prices, catch growth is likely to increase, they say.

Valuation agency AM Best & Co. Inc. said it expects "significant growth" in the Asia-Pacific region to exist as companies are looking for "new and more sophisticated ways of managing risks and control," in a report published Tuesday.

Of the 6,337 prisoners worldwide in 201

8, only 2.8% live in the Asia-Pacific region, meaning the segment has "abundant growth potential in the region," Newwick-based credit rating agency said in its report, "Asia Pacific Adaptive Domiciles Poised for Growth. "

Singapore, Labuan and the Federated States of Micronesia stand out as established resident in the region, the ranking agency said in the report.

According to Business Insurance 's latest ranking of Singapore is the largest Asia-Pacific region with 72 prisoners licensed in late 2018, Labuan has 48 prisoners and Micronesia has 25. In contrast, Bermuda, the largest North American residence , 711 prisoners and Guernsey, the largest Eastern European resident, had 206 prisoners.

China and Hong Kong have also emerged as resident in recent years, with regulators "keen to develop captive insurance in their jurisdictions," says Best.

Asia and the Pacific are showing "growing interest" in prisoners, said Franck Baron, group director, risk management and insurance at International SOS Pte. Ltd. and Chairman of the Pan-Asia Risk & Insurance Management Association in Singapore in an email.

"Interest varies greatly depending on the risk / insurance maturity of each country / jurisdiction. High interest countries are Australia, Japan, Singapore, Malaysia, China and Hong Kong," says Mr Baron.

Despite the relatively small number, with fewer than 200 prisoners living in the Asia-Pacific region as a whole, year reflects that "a lot happens in the region," says Simon Burtwell, global leading network leader and partner, FS Insurance at Ernst & Young Global Ltd. in London.

Mergers and acquisitions of companies in the Asia-Pacific region also drive growth, he said.

"We are seeing an increasingly acquiring Asia-Pacific investing in European and American companies and suddenly finding in the mix of them, they have prisoners," Burtwell says.

"We get many questions from people who have just bought a company with a catch structure within it about how to do it as efficiently as possible. And of course when you have acquired one (captivity) do you think it can be a good idea and begin to think of as many ways as possible to use them, he says.

A growing awareness and increasingly sophisticated strategy for risk management through companies and the need to manage price increases in commercial insurance markets are other key drivers for growth in prisoners in the region. says industry experts.

Soft insurance rates often suppress catch growth, says John Andre, CEO of AM Best, in Oldwick, New Jersey.

"When prices are traditionally, you see more exploitation of prisoners, he says.

The prize is a driver, but changes in insurance buying strategies from companies in the region are also driving captive growth, says Michael Serricchio, a managing director of Marsh Captive Solutions, a Marsh LLC unit in Norwalk, Connecticut.

"The biggest driver is that these companies are finally willing to take greater risks. They do not buy insurance with $ 1,000 deductible, they buy $ 1 million deductible insurance now," Serricchio says.

Another Important Cause of Growth is that the Asia-Pacific region tends to adopt a peer-to-peer approach, he said.

"They look very close to what their peers are doing. The fact that you see large national oil companies and other national companies in addition to private companies establishing prisons has paved the way for other companies to enter the market, he says.

Marsh has seen a 24% increase in the number of prisoners it handles in the Asia-Pacific region over the past five years, he said.

"There are probably less than 10 total prisoners, but that is a lot for that part of the world. Five years ago, the number may have been 2 or 3. It is very strong growth, far more than in the US or in Europe, "Serricchio says.

Premiums in the Asia-Pacific region managed by Marsh grew from $ 508 million in 2014 to $ 1.1 billion in gross premiums in 2018, he said.

Financial institutions, energy, power, tools and oil exploration industries are the best sectors of prisoners, according to Serricchio.

In addition to traditional property and liability risks, the Asia-Pacific region is increasingly using prisons to cover accidental risks such as cyber, employment benefits, trade credit, and environmental liability, industry experts say.

All risks can benefit users' use, according to Mr Baron "It also includes employee benefits," he said in the email.


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