Asia Pacific Insurance Sector Trends - Sustaining Growth Through Changes and Challenges March 2019
Over the past two years, insurance firms have been active in leasing office space in Asia Pacific for business expansion, and have also engaged in relocation for cost saving. Total leasing volume by insurance companies increased by 36% y-o-y in 2018, with the bulk of leasing transactions completed in H1 2018.
Expansion has been underpinned by strong economic growth in Asia, the expanding middle class, and greater awareness of the benefits of insurance protection, all of which has heightened demand for both traditional and universal life insurance.
Despite steady growth in online insurance platforms, the agency model remains the main conduit for life insurance sales. Insurance companies must therefore build and maintain highly efficient real estate portfolios capable of supporting continued expansion.
Key real estate-related challenges for insurance companies in Asia Pacific range from new lease accounting standards to purchasing office properties in emerging Southeast Asia. Opportunities include the growth of flexible space and brighter prospects in China as the insurance sector opens up to foreign investment.