ASEAN trade bloc likely to offer opportunities for insurers

SINGAPORE – ASEAN’s new trade bloc, scheduled to take effect by the end of 2015, will ultimately provide insurers with opportunities for increased market access, says ratings agency Standard & Poor's in a report released today.

S&P said it does not expect the ASEAN Economic Community (AEC) to provide immediate market access, but believes the liberalised flow of goods and services will provide opportunities for insurers that are able to service cross-border traders.

"Low insurance penetration and rapid economic growth in individual ASEAN markets offer the investment and growth opportunities investors and insurers seek," said S&P credit analyst Philip Chung.

"As global and regional industrial groups expand into developing nations to take advantage of lower costs, non-life insurance companies follow their clients into these economies."

S&P says it does not believe that full financial integration in ASEAN will occur any time soon. “The countries are at very different stages of development, and insurers operate at varying levels of sophistication.” www.standardandpoors.com (ATI).