30/08/2016

Asian Insurers, Increasingly Influential Property Investors-Mainland Chinese Insurers Follow Taiwanese and Koreans-

mamoru masumiya 

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3―Property Investments by Asian Insurers

Despite the peak-out of regional transaction volume, major insurers of three Asian countries with relatively large insurance markets have continued to increase property investments in 2015 (Chart-3), though Japanese insurers somewhat shrank their property assets.

In Taiwan where insurers are quite aggressive in property investment, the leading insurer, Cathay Life Insurance, increased its property investments in 2015 and has become the largest property investor among Asian insurers, even exceeding Nippon Life Insurance which is much larger in total assets. Other than Cathay Life, multiple Taiwanese insurers, such as Fubon Life Insurance and Taiwan Life Insurance, have noticeably increased property investments.

Outside of Taiwan, mainland Chinese insurers drew even more attention, as both major Ping An Insurance and China Life Insurance have significantly increased property investments. As mainland Chinese insurers have only recently started property investment, their ratios of properties to total assets are relatively low. However, since they have massive amounts of total assets and thus their property assets have already exceeded those of Korean major insurers.
Chart-3 Property Assets Owned by Asian Insurers (% of Total Assets)

4―Growing Asian Insurance Markets

The increase of property investments by Asian insurers has been backed by their growing insurance markets, as life insurance premiums grew strongly in Asian countries in 2015 (Chart-4).
Chart-4 Life Insurance Premium Growth in 2015
Life insurance premiums grew by more than 10% in emerging Asian countries such as China, India and some ASEAN countries. In these countries, life insurance penetration judged by life insurance premium per person or life insurance premium ratio to GDP is still low enough for the life insurance markets to continue to grow strongly.

Moreover, even in the four newly industrialized economies (NIEs) of Hong Kong, Singapore, South Korea and Taiwan, where life insurance penetration is as high as that in advanced western countries, life insurance premiums grew strongly in 2015. In the aging four NIEs, demand for pension or medical care insurance products has been increasing, and saving or investment products have also become popular backed by increasing household incomes.

mamoru masumiya

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