Asia-Pacific insurers hungry for W&I business: Marsh’s Martin South

Cross-border transactions fuel demand for transactional risk insurance, Marsh reports

Asia-Pacific insurers have shown a huge appetite increase for writing warranty and indemnity (W&I) cover, according to Marsh regional head Martin South.

South said that, until recently, few insurers in the Asia-Pacific region were willing to offer W&I cover, whereas “today Marsh can utilise up to 15 potential underwriters”.

“In 2012, Marsh placed 24 W&I policies and $423 million in insurance limits in Asia-Pacific,” he said.”In 2013, Marsh placed 52 W&I policies and a total limit of US$1.03 billion in Asia-Pacific, dramatic increases on both metrics.”

Speaking to GR following the publication of Marsh’s latestGlobal Insurance Market Quarterly Briefing, South said that global demand for transactional risk insurance had grown substantially over the past three years.

This was fuelled by an increase in corporate, private equity and infrastructure funds using insurance to protect their deals and gain a strategic advantage in negotiations, particularly in cross-border transactions, he added.

Tale of two Cs

South said that the Asian insurance market continued to be “a tale of two Cs: capacity and competition”.

“As international insurers continue to seek growth outside their home markets, the influx of insurance capacity into Asia continues to benefit corporate insurance buyers through aggressive competition, especially for accounts that have good risk management and claims history,” he said.

“With the exception of employee health and benefits – which is an area experiencing rate increases due to its unique cost drivers – we expect the soft market to continue subject to any major market-moving events.”