Asia (excluding Japan) is grossly underinsured. The development of long-term institutional investors, including the insurance industry, should be given policy priority.
As the demographic profile and economic structure of Asia changes, with some countries aging rapidly, it is important to shift the funding model away from short-term credit and banking towards long-term investments that sustain Asian growth and efficiency, whilst reinforcing social and financial system stability. As long-term institutional investors, the insurance and reinsurance industries are essential for the real economy as providers of social security and risk capital and as stabilizers and shock absorbers for the financial markets. Regulations, by not differentiating between banks and non-banks in their different capital and liquidity needs, are preventing long-term investors, such as insurance companies and pension funds, from participating in long-term project financing of infrastructure, energy and green technology. Policymakers and regulators need to re-focus on strengthening the Asian insurance industry to support Asia's long-term development agenda by working together with industry to:
Disclaimer: The views expressed in this report are those of the author and do not necessarily reflect those of the Fung Global Institute. The author is solely responsible for any errors or omissions.