Market Prospects Improve for Insurers Ahead of ASEAN IntegrationΣάββατο, 25 Οκτωβρίου 2014 00:16
HONG KONG--(BUSINESS WIRE)--Integration of insurance markets among the 10 member states of the Association of Southeast Asian Nations (ASEAN) has a long way to go
ASEAN is a geopolitical and economic organization comprising Brunei, Cambodia, Myanmar, the Philippines, Laos, Indonesia, Malaysia, Singapore, Thailand and Vietnam. The proposed ASEAN Economic Community (AEC) slated for 2015 aims to create a competitive economic region with a single market and production base by facilitating the free flow of goods, services, investments, skilled labor and capital.
Moungmo Lee, general manager at A.M. Best Asia-Pacific Ltd. in Hong Kong, said, “As the ASEAN market looks to be a production base for world markets, the ability to provide insurance capacity is vital for the industry across the region. However, reaching full economic integration will still require a reality check, given the practical difficulties of attaining a single economic bloc comprising mature economies such as Singapore and newly emerging markets such as Myanmar and Cambodia.”
Regulations, economic conditions and ease of doing business differ greatly among ASEAN countries. That diversity extends to political systems, cultures, languages and religions, complicating the AEC project in practice.
In the longer term, less-developed countries may benefit from the accelerated pace of improvement in insurance regulation. A.M. Best believes that regulatory development leads to a stronger and more level playing field, which will create market consolidation and capital stress for some insurers on the way to achieving a well-functioning and standardized system.