Asia’s mortality protection gap grim by 2030, prediction shows $119t rift: report

Cyber insurance market in Asia is projected to triple in size from 2022 to 2025.

Projections suggest that by 2030, Asia’s mortality protection gap – the shortfall between the financial protection required by individuals and their actual coverage – is set to widen significantly, reaching a staggering $119t, a McKinsey & Company report showed.

Notably, in most markets examined in McKinsey's Global Insurance Report (GIR) 2023, the top ten multinational insurance companies have increased their market share from 2016 to 2021, particularly in emerging markets like Malaysia and Thailand. 

Asia leads in the distribution of insurance through banks, constituting approximately 48% of global bancassurance premiums, with over 50% of premiums coming from this channel in markets like Hong Kong, India, Indonesia, and Taiwan. 

However, the Asian life insurance industry faced a slowdown from 2017 to 2022, primarily due to the halt in growth in China, Hong Kong, and Taiwan during the peak of the COVID-19 pandemic. 

The ageing Asian population is expected to surpass 800 million above 60 years old by 2030, but even in well-developed markets, there are notable gaps in pension coverage and replacement rates.

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In the context of Asia's property and casualty (P&C) insurance sector GIR, global insurers are increasingly turning their attention to the region, despite Asia representing only 20% of the global premium share in the P&C insurance sector in 2022. 

P&C insurance penetration in Asia has historically remained low, stagnating at around 1 to 2% over the past decade, although it's been growing at about 5% per year, comparable to growth in the Americas and surpassing growth in EMEA. 

Challenges include a surge in catastrophic claims, rising operational expenses, and newer risks related to cyberattacks and the rapid adoption of electric vehicles, necessitating adaptable insurance solutions. 

Additionally, the increasing climate and cyber risks will significantly impact insurers in Asia. 

The cyber insurance market in Asia is projected to triple in size from 2022 to 2025. The digitization of insurance distribution channels is gaining importance, with digitally embedded insurance expected to account for 10% of premiums, amounting to $270b by 2030.