Cyber to boom in Asia: BMS

Now is the perfect time for businesses to explore financial lines and specialty risks such as cyber insurance, as key Asian markets face softening rates and a big opportunity for growth. 

That’s the message from Toby Hooker, a broker at BMS, who discussed the favourable market conditions across the region, particularly in key hubs such as Hong Kong, Singapore, and mainland China, with EAIC Today.

“We are going through quite a soft market, which is where we’re seeing premium rates decreasing—and quite dramatically,” Hooker said. He explained that this shift is being driven by an excess of competition among insurers. “Coverage enhancements are readily available for a lot of insureds, and heavily driven by a high level of competition among insurers. There’s a lot of capacity here in Hong Kong, Singapore, other key financial hubs.”

“Now is a great time if you haven’t thought about considering these lines before.”

This fierce competition has been fuelled by slow capital markets, particularly in China and Hong Kong over the past 12 to 18 months, which has limited insurers’ opportunities to gain new business. As a result, they are focusing on retaining existing accounts, often leading to aggressive pricing and improved terms for insurance buyers.

“For clients with existing programmes in place, it’s very important for them to make sure that their programmes are still competitive in the current market,” Hooker stressed. He advised that businesses review their policies regularly at each renewal cycle to ensure they are getting the best deal. “Now is a great time if you haven’t thought about considering these lines of cover before. The market is very much in their favour.”

Growth potential

One area where Hooker sees significant potential is within financial lines and specialty risks, particularly directors and officers (D&O) liability insurance. “We’re seeing some level of softening and quite aggressive rate reductions across the market,” he said. He noted that clients with stable risk profiles can benefit from rate reductions as high as 20 to 30 percent—“mainly within the financial lines and specialty risk space”.

“A real catalyst for growth in this space has been regulatory change across Asia-Pacific, particularly in China, Malaysia, and Hong Kong,” he added. He expects to see “increased interest from Chinese companies who haven’t thought about D&O insurance in the past”.

Cyber insurance, in particular, is a key area where Hooker sees substantial room for growth, especially given the low penetration rate in Asia. While cyber insurance has matured in markets such as the US, it remains less developed in this part of the world. “From an appetite perspective, we are seeing more insurers looking to get into the cyber insurance space,” he said. This is a sharp contrast to the US, where some insurers are pulling back on cyber coverage due to rising costs and risks.

In Asia, insurers are actively looking to capitalise on this emerging opportunity, he said. “More insurers are looking to get into this space because they see it as an opportunity to grow, particularly those who are focused on the financial lines and products,” Hooker said.

“As rates are getting softer and premiums are lower, cyber insurance is a new avenue for these insurers to get into to achieve some of their premium growth, especially when regulators are placing greater scrutiny on cyber hygiene,” he concluded.

For more news from the East Asian Insurance Congress conference (EAIC) click here.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.