Asia’s expanding economies offer increasing insurance opportunities, AM Best says.

China’s GDP growth is about 6-7%, but the non-life insurance segment continues to report double-digit growth.

“Nevertheless, in terms of underlying risks, growth has probably been even higher as a result of increased concentration of people, physical assets, infrastructure and economic activities in the cities,” the ratings agency says.

Most countries in southeast Asia, with the exception of Singapore, are considered growth economies, with annual GDP growth rates from 3.5-7%. However, aside from Vietnam, these countries’ insurance industries did not grow as fast as China’s.

“The main opportunities in these markets lie in product innovation, especially as some of these move, albeit slowly, towards market liberalisation,” AM Best says.

Headwinds in Asia include declining interest rates and the risk of a hard landing in China.