APAC’s marine, aviation, transit insurance to reach $14.5b by 2025

Japan and China accounted for 60% of MAT premiums in APAC.

The marine, aviation, and transit (MAT) insurance industry in Asia-Pacific is projected to reach $14.5b by 2025 in terms of written premiums, expanding at a compound annual growth rate of 4.4% over 2019-2025, reports data and analytics firm, GlobalData.

As of 2019, APAC’s MAT insurance industry is valued at $11.2b in terms of written premiums.

Air-travel restrictions, supply chain disruptions and a weak economy slowed the industry’s growth in 2020, said Deblina Mitra, senior insurance analyst at GlobalData. 

“Delayed recovery in the aviation sector and uneven progress of vaccines will continue to restrict the growth of aviation premium in the region this year,” she said.

Even before the pandemic, several insurers have already withdrawn from APAC’s MAT industry due to years of unsustainable losses from both man-made and natural hazards and bottomed out premium prices, which resulted in reduced market capacity, according to GlobalData.

Notably, Allianz, Swiss Re, and Ascot withdrew from Singapore whilst Axa-XL withdrew from hull underwriting in Hong Kong and marine liability in Singapore in 2020. 

On the upside, the impact on premium price increase due to these market exits were mostly offset by the entry of new players such as China-based Donghai Marine Insurance and the resurgence of Lloyd’s syndicate’s presence in the region, Mitra said.

Amongst markets, Japan and China continue to be the major markets for MAT insurers, collectively accounting for 60% of the region’s premiums in 2020. 

China’s presence in the global supply chain and its growing airline and the marine fleet will be strong growth drivers for insurers active locally, Mitra said.

Meanwhile, the enactment of new sulfur limits as per the International Maritime Organization ruling in 2020, a development that aims to tackle global warming contributed by the maritime sector, is a key focus area for insurers, she noted.

Photo courtesy of Dylan McLeod