KUALA LUMPUR, Oct 31 -- The development of insurance markets in the Association of Southeast Asian Nations (ASEAN) member states has gone hand-in-hand with these countries’ economic growth, and significant potential for future growth remains, according to AM Best.

The credit rating agency in its new Best’s Special Report, ‘ASEAN - Favorable Demographics and Development Boost Economic Growth’ states economic development in the region has led to an increase in premium growth and the momentum is likely to continue.

Between 2008 and 2018, ASEAN total GDP, as a percentage of the world’s GDP, increased to 3.4 per cent from 2.5 per cent, and it is expected to grow to 3.8 per cent by 2023.

ASEAN has 10 member countries; however, the five largest economies among the 10 members -- Indonesia, Malaysia, the Philippines, Singapore and Thailand - contribute 88 per cent of ASEAN's total GDP.

Current trade uncertainty has been a headwind to growth, but accommodative monetary and fiscal policies have been able to mitigate the slowdown partially.

ASEAN’s total premiums were US$92.1 billion in 2017, according to industry reports, compared with US$15.8 billion in 1997. However, despite this growth, insurance penetration in the region remains low. (US$1 = RM4.18)

In 2017, the average insurance penetration for the region was 3.6 per cent, with the highest rate in Singapore (8.6 per cent).

While this represents a significant gap in insurance protection, it also highlights the significant opportunities for development in the future. Continuing economic and financial sector growths will help the insurance industry grow correspondingly.

More information at http://www.ambest.com.

-- BERNAMA