Australian insurers’ biggest challenge is the pressure to grow in a static market, according to a new report from Aon Benfield.

“Compounded by oversupply in the market, this will see insurers having to revisit and redefine their value proposition and their reason for being,” it says.

The report examines 16 of the Asia-Pacific region’s growing insurance and reinsurance markets, seeking to identify growth opportunities.

In Australia reinsurers face a major challenge remaining relevant to buyers while keeping their diversifying exposures aligned with global capacity.

Falling premium rates have put margins under pressure and forced companies to keep a clear focus on expense management.

“There is a large emphasis on Big Data and how to exploit data to better understand risk, better price and select risk and tailor products and distribution,” the report says.

As rapid economic development, population growth and urbanisation lift insurance penetration, Asia-Pacific is a key growth area.

Five Asian territories feature in the top 10 most promising property and casualty markets in Aon’s Insurance Risk Study: Singapore, Hong Kong, Malaysia and Indonesia rank third to sixth respectively.

India and China recorded the highest compound annual growth rate for premium, at 21% and 20% respectively, from 2009-13. Thailand, Vietnam and Indonesia reported growth above 15%.

However, insurance penetration rates remain low. In 2013 non-life penetration for India (0.6%), China (1.1%), Vietnam (0.7%) and Indonesia (0.4%) was below the 1.4% Asia-Pacific average and well short of developed markets such as Australia, New Zealand and South Korea.

Head of Aon Benfield Analytics for Asia Pacific George Attard says there are opportunities for growth in specialty lines and product innovation in the region.