EU looks to Asia insurance growth story
Insurers in Europe are increasingly recognising Southeast Asia as an insurance growth market, which presents potential opportunity for the Australian market, but outlined the obstacles needed to be removed to foster more investment in the market.
A position paper published by the European Union-Association of Southeast Asian Nations (EU-ASEAN) said that with more than 25 big European re/insurance companies running across ASEAN member states, the EU can play a huge role in developing ASEAN's insurance markets.
"Growing the insurance industry in ASEAN has significant advantages - the industry helps governments mitigate risk and provides stability for the financial system, it provides people and businesses with a source of financial security," the EU-ASEAN Business Council said.
The paper asked for the implementation of several measures to keep the ASEAN insurance market strong, including forming a transparent regulatory regime to foster long-term investment decisions, including abolishing the retroactive tax action.
It also asks that barriers to market access for re-insurance companies be removed to encourage competition within the industry. This can be done through removing foreign ownership restrictions, allowing transfer and repatriation of capital, profits and dividends, and letting insurers to employ those with the skills so the insurance market can thrive.
"The insurance penetration rate in ASEAN is growing and is now larger than the emerging market average. Despite this, there is still a significant protection gap," the EU-ASEAN Business Council said.
AUTHOR
Malavika Santhebennur
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