A free trade agreement between the European Union and Singapore will provide greater market access for European insurers, AM Best says.

The deal is likely to take effect late next year or in 2015, following ratification by all governments involved.

AM Best says it will allow European insurers already operating in Singapore to expand more easily.

“The deal ensures the right to sell directly or establish branches in each other’s markets and promises to provide greater transparency over the award of licences.”

Last month Allianz set up a regional centre in Singapore’s insurance precinct.

The Monetary Authority of Singapore predicts insurance business in Asia will grow by 8% a year over the next decade, accounting for almost 40% of the global market by 2020.