A RECENT consumer survey has found that the emerging Asian middle class shows clear signs of optimism despite economic headwinds, creating significant opportunities for the re/insurance sector.
The survey, by Hong Kong-based global reinsurer Peak Reinsurance Company Ltd (Peak Re), also found that health, well-being and financial wealth are the most important priorities in seven emerging Asian markets: Malaysia, Indonesia, Thailand, Vietnam, Philippines, China and India.
Three mature Asian markets, South Korea, Hong Kong and Japan, were included as well for comparative purposes.
In a statement, Peak Re said this consumer sector needs more insurance coverage as they begin to accumulate wealth and make plans for their retirement and their children’s education.
It added that with growing economic prosperity, these customers will certainly require more risk mitigation and protection solutions.
Peak Re CEO Franz Josef Hahn noted that emerging Asia’s share of world gross domestic product (GDP) increased significantly from 5% in 1990 to an estimated 26% in 2022, according to the International Monetary Fund (IMF).
A study by McKinsey and Company also found that Asia could drive half of the future global consumption growth to 2030, with a key contributor coming from the region’s emerging middle class.
“Despite cyclical economic challenges, emerging Asia is expected to remain the fastest-growing region in the world over the next decade,” he said.
“With higher income levels and the rise of the middle class, there are significant opportunities for insurers and reinsurers to offer risk mitigation and protection solutions.”
Hann added that Peak Re’s mandate to support the emerging Asian middle class since 2012 makes it “well-positioned” to benefit from this tremendous growth.
According to the Emerging Asia’s Rising Middle Class survey, the emerging Asian middle class is clearly more optimistic about its financial well-being, social mobility and the success of its children, compared to its counterparts in mature Asia.
Emerging Asia’s middle class is also more health-conscious and inclined to take health-promoting measures while being aware of the heavy financial burden of medical expenses.
Similarly, in terms of personal finances, the middle class in emerging Asia is more confident about their financial literacy and more disciplined about spending and saving.
This optimism is reflected in the fact that more middle class folk in emerging Asia have ambitions to become entrepreneurs or expect employers to improve their work-life balance.
Hahn added: “The results of Peak Re’s large-scale consumer survey on the emerging Asian middle class will contribute to a better understanding of the needs and preferences of this important customer segment and stimulate the dialogue between Peak Re and its customers and partners to better serve these consumers.”
In collaboration with Intuit Research, Peak Re commissioned the regional survey in the second quarter of 2022 (2Q 2022) to identify the unique characteristics of the emerging Asian middle class and in commemoration of its upcoming 10th anniversary.
Understanding the behaviour and preferences of the emerging Asian middle class, it explained, is critical to successfully tapping into this important insurance market segment. – Oct 23, 2022
Main photo credit: Getty Images
