Asia’s emerging economies are ripe for the picking, with many new underwriting growth avenues, the International Insurance Society’s Global Insurance Forum was told yesterday.

Demand for infrastructure financing, catastrophe insurance and cyber insurance are poised to grow rapidly as the region’s insurance industry takes off, Singapore’s Deputy Prime Minister and Co-ordinating Minister for Economic Policies Tharman Shanmugaratnam says.

The region will account for 40% of overall insurance business by 2020, and the insurance market is projected to grow 9% annually over the next 10 years.

“[The insurance industry] is a difficult environment in many respects… it’s also a crowded market in traditional insurable risks,” Mr Shanmugaratnam told the forum in Singapore.

“Too much capital is chasing after the same risks in traditional insurance lines – property and casualty for instance – and that doesn’t help returns, but there are still many viable options for growth, and here in emerging Asia especially, there are major new underwriting opportunities.”

Catastrophe insurance in particular offers great opportunity in a region prone to major natural disasters such as earthquakes and typhoons, but which remains dogged by low coverage.

Singapore, the financial hub in southeast Asia, has started the ball rolling with the Natural Catastrophe Data Analytics Exchange.

This initiative is a public-private partnership involving several global insurers to build a database to facilitate underwriting of catastrophe risks.

“So far the take-up of catastrophe insurance in Asia has been woefully low,” Mr Shanmugaratnam said. “Part of the reason has to do with a lack of insurance awareness among businesses around the region.

“But it also has to do with data gaps. The industry needs good data on the frequency, location and economic impact of natural disasters, so insurers and reinsurers can price risks adequately.”